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As students head back to college campuses and freshman learn how to navigate their classes and first real experience with bureaucracies, higher education in Washington and in many states is facing a crisis. There are more people who both want to attend college and more that need to get higher education to stay competitive in a difficult and competitive economy.
Since higher education is a discretionary part of the state budget, it is a target for budget cutting. The state's colleges and universities have experienced this in the last budget cycle that we are now in the middle of. Next year's budget does not bode well for higher education funding either.
Other issues include the never ending cost increases that place a significant burden on middle and lower income students and parents. Too many graduates are coming out of school with large debt loads. Many of these young people are having a difficult time finding work, sometimes due to majors that do not translate well into the business world or only relevant for lower paying jobs.
The community college system is seeing large demand for job seekers looking to upgrade skills or retrain for emerging industries, such as cleantech or other "green" jobs (which are loosely and poorly defined).
Combine that with the fact that too many students are entering college unprepared in math, reading and writing requiring remediation--although this problem could be solved by improving the K-12 system. But that is for a future post.
The options appear limited. One standard idea is to allow higher eduation institutions to raise tuition, while also increasing financial aid. Another is to make higher education a higher priority in the state budget. That entails difficult political choices since it means cutting health care and social services, where the special interests there will lobby hard against cuts.
The flip side is that higher education has been less than accountable for its performance. Like K-12, systemic reform is needed to create higher value for students, parents and the state. The tech industry has been strong advocates for higher education, particularly around STEM degree production. But when universities do not act in accordance with what the legislature sets forth in the state budget, an erosion of confidence occurs.
Governor Gregoire knows there is a problem and has formed a Higher Education Funding Task Force, chaired by Microsoft's Brad Smith. See the announcement: http://www.governor.wa.gov/news/news-view.asp?pressRelease=1543&newsType=1.
The Prosperity Partnership, of which WTIA is an active participant, has reactived their Higher Education Working Group that was very effective a few years ago in getting new dollars into higher education with specific STEM degree targets. See the link to their page with some relevant information about the need for more higher education: http://www.prosperitypartnership.org/foundation/education/index.htm
There is much more to say on this topic and futre posts will let you know what the Governor's task force recommends. WTIA will remain engaged in supporting higher education and advocating for both reform and funding.
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This post is republished from Joe Wallin's Startup Company Law blog, http://www.startupcompanylawblog.com/
When Joe Wallin asked me to write a guest op-ed for his blog I was excited to do so. As the WTIA’s VP of Government Affairs with over 20 years of state level lobbying under my belt, I felt I had at least some modicum of credibility around the topic of political influence.
With a primary election a week away and a big general election in November, this issue is timely.
For those of you that follow legislation and politics, you know there have been a number of big issues that affected the tech industry that have occurred in both Olympia and Washington, D.C. this year. While WTIA focuses primarily at the state level, there are federal issues that WTIA and the tech industry have worked on in 2010. Issues such as repatriation of foreign earnings, comprehensive immigration reform, broadband and net neutrality and recently the accredited investor piece of the financial overhaul and online privacy have all required the tech industry to be involved and actively engage to protect the interests of technology companies and entrepreneurs.
At the state level, we have dealt with K-12 reform/Race to the Top, the slashing of higher education budgets and the ill-advised proposal to apply sales to tax custom software.
The state’s technology industry, however you define it, is one of the top industries in the state. Yet, as an industry we have not translated our economic influence into commensurate political influence. Why?
The main reason is money, the second is unity and the third is indifference. I think most tech industry members would agree that we ought to be preeminent, with the number and quality of jobs the industry generates, the amount of wealth that the tech industry has created and the reach technology has into everyday life. Yet, we are politically outflanked by organized labor, the tribes, trial attorneys as well as a number of regulated industries, from timber to utilities to builders.
For one thing these groups have been playing the political game for much longer than we have. Regulated industries, being regulated, figured out a long time ago that they have to be deeply involved in the political process if they aren’t going to be regulated out of business. Most of the technology sector is essentially unregulated—something for which we should be thankful but also protective of.
Indifference. That word may be strong but let’s say that tech innovators do not have the time to give “mind share” to political and legislative activity that affects the industry broadly. Members of the tech industry will go to great lengths for the causes they are passionate about but there seems to be little passion for promoting the technology industry itself to lawmakers.
I have heard from small and medium tech companies when a big issue comes up in Olympia “Isn’t Microsoft paying attention to that?” Sure, whether it’s education or regulation of spyware but does it make sense to cede the industry’s voice to one very large company that is primarily looking out for itself? This is not a dig at Microsoft as all large companies do the same thing but it is not prudent to let someone else do your lobbying for you.
A prime example of this was during the debate on the custom software sales tax earlier this year in Olympia. Microsoft was “neutral” on that proposal, meaning that if it did pass they did not see it as harming them and if it failed, the status quo remained. But for custom software developers this idea was anathema to them.
This was one proposal where indifference fell by the wayside and those affected responded to our calls to action and contacted their legislators. However, what does it say about the industry that the legislative proponents of that tax came from Seattle and the Eastside—the literal center of the software development universe?
Unity. One of the most interesting and enjoyable aspects of working in the tech industry and talking to entrepreneurs is the variety of thinking across a wide range of subjects among tech people. Of course this translates to the political spectrum as well. When you look out at the various interest groups they often tend toward one way of thinking and one political party. The unions, tribes and environmentalists are almost exclusively supportive of Democrats while many regulated businesses such as timber, builders and “small business” lean to the political right.
The technology sector is characterized by those whose political leanings range from Green to Libertarian and everything in between. The risk is that we can never agree on anything, making a united front difficult if not impossible. While it makes for enlightening debate, the tech industry has to be unified when it comes to the big issues that affect our continued growth in Washington.
Luckily, it seems that there is a good deal of unity around issues such as K-12 reform, higher education funding and tax and regulatory policies that support innovation and entrepreneurship. While there may be differences at the margins, I have yet to find anyone in the tech sector, party affiliation notwithstanding, that doesn’t believe we shouldn’t improve STEM education, increase graduation rates, keep standards high and hold the K-12 system accountable for results. Similarly, most also believe that graduating more engineers and computer scientists from our state’s universities should be a legislative priority.
Because we are not philosophically hamstrung, it puts the tech industry in an excellent position to be influential within both major parties, as long as the message is consistent and we are willing to spend the…
Money in a coordinated fashion that demonstrates we are serious about supporting those who go to bat for the tech industry’s policy priorities. As a former WTIA Board member once said, “politics is a coin-operated business”. While it may sound cynical, there is truth in that statement. No matter what you believe about campaign finance, you have to pay to play. The other reality is that campaigns are expensive. All major industries in this state (and many minor ones) put a great deal more emphasis and real money into their political action committees than the tech industry does.
I know many individuals are very active in making political contributions, usually reflecting their own political proclivities but that usually does not translate into industry influence. By not being major players, we allow all those aforementioned groups to have more influence than their employment numbers and global reach would argue for.
Organized labor, in particular, has much more influence than their numbers would indicate. Private sector union jobs have declined steadily over the past 30 years and outside of Boeing and a few traditional industries (timber, utilities) the vast majority of private sector workers are non-union. Yet, because union members doorbell for candidates, put up yard signs and spend lots of money on campaign contributions, those in office pay a lot of attention to what they want, even if that agenda is hurting the state overall.
The state’s technology industry is uniquely positioned to be leading the way in influencing public policy for the future. We all love this place, the quality of life, the entrepreneurial spirit, the boundless opportunities that the technology industry has helped create. Now is the time for us to step up and take our place as the state’s leaders.
The game has changed as President Obama showed in his campaign through the use of social media, internet-based fundraising and a large and committed grassroots network. The WTIA is now using many of these tools and will continue to improve how we use them. But we need your help, advice and support.
As a department of one, I cannot do it alone. What you can do is become part of our government affairs listserv (http://www.washingtontechnology.org/pages/people/people_listservs.asp). The second thing you can do is contribute to TechPAC (http://www.washingtontechnology.org/pages/advocacy/advocacy_wsa_pac.asp) and attend one of WTIA’s upcoming PAC fundraising events (http://www.washingtontechnology.org/pages/events/events_events_wsaevent.asp?id=1008PAC). There you can meet both current legislators and candidates to find out where they stand on K-12, higher education and tax and regulatory issues.
The technology sector has a bright future in Washington. Let’s ensure that our policymakers do what it takes to make it happen.
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WTIA is holding its first ever fundraising events for our politcal action committee, TechPAC. The first will be held Tuesday, Aug. 24 at the World Trade Center in Seattle and the second will be Thursday, Aug. 26 at the Rock Bottom Brewery in Bellevue.
A number of state legislative candidates and incumbents have already agreed to attend so this will be a great chance to meet them and learn about their campaigns so you can be an informed voter.
Donating to TechPAC is important because it is the most effective way for the collective voice of the technology industry to be heard by elected officials. The reality is that campaigns are expensive and it is important that the tech industry stands behind those who have voted to improve K-12 education, promote increased STEM degrees from the state's colleges and universities and who support a positive business and tax climate for technology entrepreneurs and innovators.
TechPAC contributes in a bipartisan manner to candidates/incumbents of both parties who the TechPAC committee determines have a solid record of support for the issues listed above. A $100 contribution or more makes you eligible for being a TechPAC committee member.
Please register today for this networking event with a political twist: http://www.washingtontechnology.org/pages/events/events_events_wsaevent.asp?id=1008PAC Seattle
http://www.washingtontechnology.org/pages/events/events_events_wsaevent.asp?EventID=903 Bellevue
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It seems that "back to school" season is here; at least that is what retailers are telling us. But for schools, teachers, principals and parents, it is true. Schools all over the state are getting ready for the 2010-11 school year that starts in a month.
WTIA's top legislative priority is improving K-12 education in Washington and we are involved with a number of groups that share that goal. At the state level, WTIA is an active participant in the Excellent Schools Now coalition, http://www.excellentschoolsnow.org/
At the local level, WTIA has recently joined the Our Schools Now coalition, http://www.ourschoolscoalition.org/. This group is focused on improving student achievement by improving teaching. Their website explains their goals and efforts, the first of which is to inform the teaching contract negitiations in the Seattle School District. Below is the cut and pasted "open" letter to the Seattle School Board, Superintendent and Teachers. Attached is the open letter to parents.
WTIA is among many community, parental and business groups aligned in the goal of improving student achievement, increasing graduation rates, maintaining high standards and changing how teachers and principals are evaluated and compensated. With Washington failing to make the grade in the Race to the Top competition, it is necessary to keep working at the state level and locally to improve K-12 education. Please see below for more details about this specific effort and the OSC website for more details and how to get involved. For WTIA members with children in the Seattle School District, this is especially important for your student's education.
The formatting of the letter may not come through. Please go to the OSC website if you have trouble reading the text below.
Seattle Public School Teachers, District Management & the School Board |
An Open Letter to
OUR APPEAL
We appeal to you, the decision makers in the current contract negotiations process, to adopt critical reforms that will make a dramatic and positive difference for students. Today, our schools work well for some, but not all. Only 6 of 10 students in the class of 2008 graduated; for nearly all students of color, the graduation rate is much lower. Only 17% of those who do graduate are qualified for college acceptance. Together we have a moral and economic obligation to improve these statistics. More than grades are at stake here; a quality education is core to personal, family and community success.
WHO WE ARE
We are parents, community leaders and taxpaying supporters of Seattle Public Schools. Collectively, we have dedicated decades to supporting public education. We send our children to public school and witness the passion and dedication of their teachers every day.
OUR PROPOSAL
As a broad-based coalition representing diverse interests across the city, we are advocating for nine updates to the Collective Bargaining Agreement (see below for details). These include:
· Providing teachers more time to prepare for class and collaborate with their peers;
· Strengthening teacher evaluations so they are meaningful, tied to student learning, and a useful tool for teachers and administrators. This includes factoring performance into staffing decisions, as opposed to prioritizing seniority;
· Creating new career paths and compensation opportunities for highly effective teachers and those who take on added responsibilities.
OPPORTUNITY
These proposals are centered on boosting student success and supporting teachers. They are rooted in driving student outcomes, and will result in new ways for teachers to be recognized, rewarded and compensated.
A NATIONAL MOVEMENT
The momentum, both locally and nationally, is powerful. In states and urban districts across the country, management and labor have come together to implement contract changes that improve student achievement and recognize teachers as professionals. Today Seattle has this same opportunity.
There is nothing more central to educational success than great teaching – and more specifically, no better way to eliminate the achievement gap than by having highly effective teachers in every classroom. As former teachers, Seattle Public School parents, community volunteers and Seattle taxpayers, we know what is included or left out of this contract affects us all. We do not bargain, but we live by the bargain.
We urge you to come together, ratify a landmark agreement that adopts the nine proposals outlined here, and ensure school opens on time in September. We strongly believe there is a direct link between implementing these proposals and boosting student achievement. We will stand with you to celebrate and support this critical step moving Seattle to the fore of urban education.
Respectfully,
The Our Schools Coalition (www.ourschoolscoalition.org)
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African American Parent Community Coalition
African American Men’s Group
Alliance for Education
Central Area Motivation Program
CEER (Coalition for Equal Education Rights)
CCER (Community Center for Ed Results)
Council President Richard Conlin
Councilmember Tim Burgess
East African Community Services
El Centro de la Raza
Greater Seattle Chamber of Commerce
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Horn of Africa Services
Kevin C. Washington, Tabor 100
King Co. Hispanic Chamber of Commerce
League of Education Voters
Mona H. Bailey, Deputy Superintendent (ret)
New School Foundation
Partnership for Learning
Powerful Schools
Rainier Scholars
Seattle Breakfast Group |
Somali Community Services of Seattle
Stand for Children
Technology Access Foundation
Technology Alliance
Urban Enterprise Center
Urban Impact
Urban League of Metropolitan Seattle
Washington Policy Center
WTIA
Youth Ambassadors |
OUR SCHOOLS COALITION PROPOSALS
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Area |
Proposal (vs. status quo) |
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Teacher Support & Development |
§ Increased time with other teachers to plan and share the best ways to teach
§ Increased time to prepare for class
§ More effective mentoring & coaching programs
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Performance & Evaluation |
§ An improved 4-level evaluation system (vs. satisfactory or unsatisfactory as the only two ways to evaluate teachers)
§ Student academic growth is factored into how teachers are evaluated (vs. principal observation only)
§ Teacher effectiveness becomes a key factor in staffing decisions, including what school a teacher is assigned to, whether or not teachers get transferred, and whether or not a teacher gets laid off (vs. seniority only)
§ The lowest performing teachers are removed in less than 12 months (vs. 18 months)
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Compensation & Career Opportunities |
§ Teachers get new opportunities for higher pay based on strong performance, taking on added duties, having subject matter expertise in hard-to-staff areas (such as math) or for teaching in schools with many high-need students (vs. seniority & credentialing only)
§ New paths are opened for talented people to become teachers (such as Teach for America)
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WTIA is working with Immigration Works USA to promote this Aug. 12 event in Seattle dealing with immigration. Sen. Patty Murray is one of the several high level speakers who will be at this event.
Immigration reform is an oft-discussed but little acted on federal issue that generates a great deal of emotion but no useful policy changes. The issues of legal and illegal immigration get hopelessly tangled and a number of industries are negatively impacted by the lack of comprehensive immigration reform.
Please register and attend this August 12 event at the Seattle Sheraton Hotel. Below is the specific information from Immigration Works USA. The agenda is attached.
WHY REFORM CAN'T WAIT!
Join the business grassroots campaign for an immigration overhaul
WHAT A one-day conference and strategic planning session for employers who rely on immigrant workers and grasp the urgent need for immigration reform. It’s looking less and less likely that Congress will take up immigration before the November midterm elections. But failure in 2010 only increases pressure for action in early 2011, and employers of immigrant workers need to be making their voices heard.
WHEN Thursday, August 12, 2010
WHERE Sheraton Seattle, 1400 Sixth Avenue, Seattle
FEATURED SPEAKERS Washington Sen. Patty Murray, entrepreneur and scholar Vivek Wadhwa and veteran political commentator Morton Kondracke (VIP dinner).
WHO SHOULD ATTEND Employers from the Northwest and beyond who rely on immigrant workers – highly skilled, lesser skilled, seasonal and agricultural workers. Business leaders working to advance immigration reform. Employers and business representatives who want to join the fight.
REGIONAL AND NATIONAL The summit will bring together engaged employers from across the U.S. – business advocates from the Northwest and members of ImmigrationWorks coalitions from Georgia to California – to share ideas about how best to advance immigration reform in 2011.
COSPONSORS ImmigrationWorks USA and the U.S. Chamber of Commerce, working with local pro-immigration business coalitions – ImmigrationWorks Washington, the Coalition for a Working Oregon, the Idaho Coalition for Immigration Reform – plus the Association of Washington Business and the Washington state chapter of the American Immigration Lawyers Association.
OTHER INVITED SPEAKERS Business advocates from across the country and a panel of employers who rely on immigrant workers – small business owners who know and can explain better than anyone how immigrant workers keep U.S. businesses running and contributing to a dynamic, competitive economy.
REGISTER HERE
www.immigrationworksusa.org/index.php?p=212
REGISTRATION FEE $35. VIP DINNER AND SUMMIT $300.
PRINTABLE FLYER AGENDA
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Today at WTIA we had an interesting meeting with Dr. Patrick Moore, a co-founder of Greenpeace and some of his colleagues.
Currently, Dr. Moore is co-chair of the Washington D.C.-based CASEnergy coalition that is promoting nuclear energy as a clean and sustainable source of energy. His co-chair is Christine Todd Whitman, former New Jersey Governor and EPA Secretary under George H.W. Bush. You can find them at www.casenergy.org.
They made a compelling case for nuclear energy as an important source of energy for the future. Nuclear's advantages include its cleanliness and its sustainability. Dr. Moore was quick to point out that it isn't "renewable" in such a way as hydropower, solar and wind are but it is very reliable.
Nuclear's cleanliness comes from its lack of greenhouse gas emissions and its sustainability comes from the vast supplies of uranium and the ability to use current stocks of enriched uranium for hundreds of years using the newer technologies. Clearly the storage of spent nuclear fuel is still a big issue that has yet to be fully resolved but that problem is more "political" than technological.
In Washington, over 80% of the electricity generated is from clean sources if you add hydropower and nuclear together. Energy Northwest, http://www.energy-northwest.com/who/ operates the only active nuclear power plant in Washington.
As our state and nation move toward a cleaner and more sustainable energy future, we will see a reduction in the use of coal as a generation source, even though the U.S. has more coal than anywhere else in the world. However, wind and solar still require subsidies to be price competitive and are not reliable enough for base load generation. Hydro and nuclear are extremely reliable and clean.
WTIA is not "taking a position" on nuclear power but we are interested in being informed and informing you of issues in the energy and clean tech arenas. We are working closely with a gentleman named Jan Greylorn on expanding our knowledge base on this important topic. Stay tuned for more developments.
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As you may recall, the 2009 legislature passed a sweeping law that applied sales tax to digital products, digital automated services (DAS) and remote access software. For Washington based sellers of digital products, DAS and remote access software, this law (HB 2075) turned them into "retailers" for tax purposes from service providers, lowering their B&O tax rate as well as shrinking the base of revenue on which tax is applied. For Washington state consumers and businesses who buy digital products, DAS and remote access software from Washington sellers, sales or use tax is applicable on those purchases, except in certain cases.
Because changing tax law is always complicated, amendments to the law were needed. The 2010 legislature passed HB 2620, found here: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=2620&year=2009 that made needed clarifications.
The Dept. of Revenue has updated their web page with the new changes, updated the Buyer's Exemption Certificate and published details of the 2010 changes: http://dor.wa.gov/content/getaformorpublication/publicationbysubject/taxtopics/digitalproducts.aspx
If you are either a buyer or seller of digital products, DAS or remote access software, please check DOR's website and published documents there to ensure you are in compliance. The final bill report for HB 2620 is attached.
If you have any questions, please contact me at Lmcmurran@washingtontechnology.org.
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In a recently published study by Georgetown University's Center for Education and Workforce, the authors find that not enough Americans will have the right education for the jobs that will emerge in the next several years. Here is a quote from the study that you can find here: http://cew.georgetown.edu/jobs2018/
"America is slowly coming out of the Recession of 2007—only to find itself on a collision course with the future: not enough Americans are completing college . . . By 2018, we will need 22 million new workers with college degrees—but will fall short of that number by at least 3 million postsecondary degrees . . . At a time when every job is precious, this shortfall will mean lost economic opportunity for millions of American workers." The executive summary is attached to this post.
This is another validation of what has been obvious since the information age accelerated in the 1990's and early 2000's. Each successive economic cycle requires workers in almost every occupation and industry to have higher levels of education and training. A job that was once performed by high school dropouts or high school graduates now requires some college level education or training. Jobs that were once performed by those with some college or an associate's degree now require a bachelor's degree. Occupations that were once the province of bachelor's degree holders are now held by those with master's, MBA's or higher level degrees.
In addition to that, jobs that now exist never existed before, particularly those that deal with anything internet or social media related. "Internet Marketing Manager" is a position that didn't even exist before 1998 and those companies that hire for that position are definitely going to hire a bachelor's degree holder plus relevant experience.
Unfortunately our policymakers and elected officials do not seem to recognize this reality as they continue to cut funding for higher education, especially the four year universities where the high demand-high impact degrees are conferred. Even the community and technical colleges, where the needed 2 year and certificate programs reside, got hit in the latest state budget. We are not doing our citizens any favors when we limit access to higher education that will help them move forward.
We must also be more forthright with young people about their choice of major as they approach higher education. While there is nothing inherently wrong about pursuing sociology or history degrees, the reality is that the job market for those graduates, as compared to engineers, is going to be weak, unless liberal arts majors have good selling or customer service skills that are useful to a business.
Washington has done a credible job of "worker retraining" and garnering the federal funds available for such programs that are delivered mostly through the community and technical college system. These programs are very good for workers who have lost jobs because of the recession, outsourcing or automation. However, in few cases can these workers be "retrained" for truly high value jobs that are less immune to the economic cycles.
The state must prioritize bachelor's and master's degree production, particularly in the STEM fields over community and technical colleges. This is not a judgement or criticism of CTCs but a simple reality of what the future will hold. This also means that we have to keep our focus on the K-12 system. We cannot allow for low standards and high dropout rates. The opportunities for those that do not finish high school or who come out of high school unprepared for higher level learning are going to get left behind and, in fact, already are experiencing hardship in this economy.
The flip side of this is that if we are going to do more to get folks into college and pursue a four year degree or higher, then college and universities must be accessible and affordable. Currently too many students and their parents are incurring large debts to get that degree. Plus in a tough economy, getting gainful employment to start repaying those school loans is much more difficult, especially if the degree is not one highly valued by an employer.
The bottom line, though, is that a society that has higher numbers of college educated citizens is better off. Those with college degrees are involved much less with the criminal justice system, are generally healthier, make higher salaries on average, pay more taxes and are more civically engaged.
One of WTIA top legislative and public policy priorities is more and consistent funding for the state's colleges and universities, particularly around STEM degrees. We will continue to be advocates for that as it is important both to the technology industry and the state.
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While many of our elected officials, federal, state and local, do not understand how the new economy functions there are a few that do. WTIA's Political Action Committee, TechPAC, supports those candidates and incumbents who understand and demonstrate support for policies that support the innovation economy. These policies include improving K-12 schools, particularly around math and science, increased degree production in STEM disciplines from the state's colleges and universities and not imposing detrimental business regulations or punitive tax policies, such as a sales tax on custom software.
Two current legislators fall into this category whom TechPAC is supporting. They are Rep. Reuven Carlyle of Seattle and Sen. Derek Kilmer of Gig Harbor. Rep. Carlyle is finishing his first term as a member of the state House of Representatives and has shown himself to be a quick study and effective. He was the primary House member working to stop the custom software sales tax in the 2010 legislative session. He is also a strong supporter of improving K-12 and expanding higher education. Here is a link to Rep. Carlyle's bio: http://www.housedemocrats.wa.gov/members/carlyle/bio.asp He is running for a 2nd term in the 36th district of Seattle that covers Queen Anne, Magnolia, Ballard and other neighborhoods.
Sen. Kilmer is Chair of the Senate Higher Education Committee. His "day job" is with the Tacoma-Pierce County Economic Development Board, working on business recruitment and retention. He sees the issues businesses struggle with on a daily basis and understands the need for development and attraction of talent. He served in the House for one term (2005-07) before running for the state Senate in 2007. He is running for reelection in the 26th district that covers Gig Harbor, Port Orchard and parts of Pierce and Kitsap counties. Here is a link to his bio: http://www.senatedemocrats.wa.gov/senators/kilmer/biography.htm
Rep. Carlyle and Sen. Kilmer are holding a joint fund-raising event Monday, July 12 at 5:30 p.m. in Seattle at Rep. Carlyle's home at 608 W. Kinnear Place. For those in the technology community this is a chance to demonstrate support for two intelligent voices who have shown great support for the tech sector. A flyer about the event is attached.
It is important that the technology industry step up its political activity in support of those who are willing to go out on a limb to promote policies that promote economic growth and innovation. Olympia is currently filled with many well-meaning lawmakers but who have a distinct lack of understanding of how tech businesses (or any business) operate and what is required to keep the innovation cycle turning.
WTIA's primary public policy aims are to see continued improvement in K-12 math and science achievement, increase STEM degree production from the state's colleges and universities and to prevent punitive tax and regulatory policies from being passed, such as the sales tax on custom software.
One way you can help is to contribute to TechPAC. You can read more about our PAC here and download a contribution form: http://www.washingtontechnology.org/pages/advocacy/advocacy_wsa_pac.asp
Another way is to attend fund-raising events like the one listed above on July 12. Let's let the politicians know the tech industry is a serious player in this election.
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Due to the spate of new tax laws and tax increases, the Washington state Dept. of Revenue is conducting a series of stakeholder meetings to gather input in order to write new regulations implementing these changes. Just about every business and industry is affected by these new taxes. Of particular interest to the technology sector are the new "economic nexus" and the "tax avoidance" statutes. Reseller permits and the new apportionment method will also impact technology companies.
Here is the link to the DOR web page on economic nexus: http://www.dor.wa.gov/content/findtaxesandrates/bandotax/economicnexus.aspx
Attached to this post is a document discussing the new apportionment method.
Following is the schedule for DOR meetings:
Reseller Permit
June 22, 10:00 AM - 12:00 PM
DOR Office, 6300 Linderson Way Rm. 123, Tumwater
Tax Avoidance
June 23, 9:30 AM to 12:00 PM
DOR Office, 1025 Union Avenue SE, 4th Floor Executive Conf. Room, Olympia
Economic Nexus Public Hearings
June 24, 9:30 to 12:00 PM and 1:30 PM to 5:00 PM
Criminal Justice Training Commission, 19010 First Ave. S., Burien
Audit Transition to New Tax Laws
June 29, 9:00 AM to 10:00 AM
DOR Office, 1025 Union Avenue SE, 4th Floor Executive Conf. Room, Olympia
Do not hesitate to attend any of these meetings; they are open to the public
For more information about the recent tax increases or other tax law changes, check DOR's home page: http://www.dor.wa.gov/Content/Home/Default.aspx
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Two very interesting op-eds in the Seattle Times today piqued your author's interest and begged the question, at least in my mind, if the two were related.
First was the dramatic increase in the Everett School Distrcit's graduation rate, http://seattletimes.nwsource.com/html/editorials/2012073577_edit10grads.html, which went up to 84% from an appalling 53% -- clearly major progress that should be celebrated and emulated by every school district in the state. The op-ed discusses some of the methods and changes that Everett made to increase the rate that is above both state and national averages. Noteworthy was the increase in graduation requirements that happened at the same time as the improvement in graduation rates; demonstrating that graduation requirements and dropout rates are not connected, as some claim.
The district closely monitored student absences and intervened early when they spotted problems. Everett also made it easier to enroll in the fifith year of high school, embodying the "better late than never" adage. While the op-ed doesn't discuss it, one would imagine that students themselves gained confidence and self-esteem by achieving this important rite of passage. Let's hope that OSPI, www.k12.wa.us, and school districts statewide take note of Everett's progress and emulate its success.
Juxtaposed with the Everett story is an op-ed by Thomas Friedman that is also quite enlightening, http://seattletimes.nwsource.com/html/opinion/2012073512_friedman10.html. He extols the virtues of startups, particularly as the engine of job creation. He says some things that elected policymakers desperately need to hear and cater to, such as "Good jobs — in bulk — don't come from government. They come from risk-takers starting businesses..." and "You can't be for jobs and against business."
Friedman cites the work of the Kauffman Foundation, the leading non-profit devoted to entrepreneurship. The op-ed gives some excellent guidance to policymakers on immigration, tax and other public policies that would spur entrepreneurship and innovation -- something that is clearly needed in this era of over reliance on big government to bail out states, local governments, banks and automakers.
Are these two subjects related? Does increased educational attainment lead to more startup and entrepreneurial activity? One would have to do some in depth research to give a definitive answer but I suspect that there is some relationship between the two. It is already well documented that higher educational attainment is good both for individuals as well as society. Lower unemployment, higher salaries, better health, less use of social services are all linked directly to higher levels of education. This is why it is critical to improve high school graduation rates and push more young people into higher education. Part of the educational process should include some exposure to starting one's own business. Too often we simply push the notion of "getting a good job" when it is obvious that jobs are transitory and rarely lead to any real long-term prosperity for individuals.
Both of these issues are near and dear to WTIA's heart and our efforts in the public policy realm. We have pushed for higher graduation rates along with improved standards and requirements as well as tax and public policies that favor, or at least limit damage to, entrepreneurship and innovation. WTIA is also a strong proponent of increased funding for higher education, particularly in high impact four year degrees, such as engineering and technology related ones.
Our economy and future are dependent upon those willing to take risks and start new businesses. Let's make it a priority for our legislature to pass the right laws and budget that incentivize those activities.
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A Unique Opportunity for Chinese Investment in Your Company
The Center for Small and Medium Enterprise in Shanghai
Featuring
Mr. Jiang Jiaobai
Pengxin Group
Lee Sands and Joe Massey
Sierra Asia
Tuesday, June 15, 2010
8:00am – 9:30am
Rainier Square Conference Center, 3rd Floor
1333 5th Avenue
Downtown Seattle
$12 members / $15 non-members / $17 at the door
RSVP Required
Register Online: http://www.seattletradealliance.com/events/event-registration-ChinaInvest.php
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Mr. Jiang Zhaobai, ranked number 61 on the Forbes list of the richest people in China, has established a Center for American SME Market Access and Investment in Shanghai to act as a bridge for US companies to Chinese capital and the Chinese market. He is interested in investing in companies in our region. We invite you to attend a program to hear from Mr. Jiang about what types of companies he wants to invest in here in the Greater Seattle area and the plans for the Center in Shanghai and how it might help you in the Chinese market.
Mr. Jiang is partnering with Sierra Asia to assist him in finding such companies. Sierra Asia was founded by Lee M. Sands, a former chief negotiator with China at the U.S. Trade Representative's office from 1992 to 1997. His partner, Joe Massey is located in the Greater Seattle office and they have just located their U.S. office in Seattle. Joe Massey, who was chief U.S. trade negotiator with China and Japan from 1985 to 1992, and Lee Sands negotiated all the U.S. – China trade agreements between 1985 and 1997, including intellectual property rights and WTO.
The Center for Small and Medium Enterprises will provide a variety of backend services for companies that join it. In addition, the Center will assist companies find the right distributors and advise on intellectual property protection. A member of Sierra Asia’s team is Mr. Jia Mingru, who was legal counsel to China’s State Council (Cabinet). Mr. Jia wrote many of China’s IPR laws and regulations before leaving the government to join Sierra Asia.
As noted, Mr. Jiang is interested in investing in companies and helping them sell into the Chinese market. He has already invested in a U.S. composite materials company. He is interested in small and medium size companies who already have a product or service generating a revenue stream. He is not interested in startups. He is looking for companies that want to enter or expand their operations in the Chinese market. He is especially interested in the following sectors: a) clean technology and green energy; b) new media; c) mobile IT; d) medical devices; e) biotech/biomedicine; e) environmental technologies; and f) new materials.
In addition to investing in companies and using the new Center to help them sell into China, Mr. Jiang also welcomes the right companies to join the Center even if he does not invest in them. In addition, the Center is establishing a virtual platform for US companies to interact with Chinese investors and customers, and to export their products to China.
If you are a company who could benefit from Mr. Jiang’s investment or the center, or you have clients or know of companies that could benefit, please join us on June 15 when Mr. Jiang will launch the center here in the Greater Seattle area.
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Registration: The cost of this event is $12 for members, $15 for non-members, and $17 at the door. Refunds may not be made after Friday, June 11. To register online please visit http://www.seattletradealliance.com/events/event-registration-ChinaInvest.php. For additional information or to register over the phone, please contact Samantha Paxton at 206.389.7319 / samanthap@seattlechamber.com.
Sponsored by:
Trade Development Alliance of Greater Seattle
enterpriseSeattle
Washington State China Relations Council
Washington Biotechnology & Biomedical Association
Washington Technology Industry Association
Washington State Department of Commerce
Economic Development Board for Tacoma-Pierce County
Snohomish County Economic Development Council
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As you may know, the WTIA works with our national affiliate, TechAmerica, on public policy issues of importance to the technology industry. We are part of their state grassroots network to distribute timely and important information to WTIA members so you can take action or at least be informed.
Below is a link from TechAmerica about the America Competes Act, which is up for reauthorization. The Act, widely supported by the U.S. tech industry, focuses on funding scientific research, improving STEM education and promoting technology commercialization -- all longstanding priorities of Washington's tech sector as well.
WTIA encourages your company to sign the letter by Monday as the bill may move to the floor soon. The bill number is H.R. 5116, found here: http://science.house.gov/legislation/leg_highlights_detail.aspx?NewsID=2815
Here is the TechAmerica alert page: http://view.techamerica.us/?j=fe651575746406747215&m=fec3167273600275&ls=fdf012777664067876137772&l=fe831677776d03757c&s=fe56107370600c7e7213&jb=ffcf14&ju=fe21157776620178771c79&r=0
Thank you for taking the time to add your voice in support of this important public policy. If you have any questions about WTIA's advocacy at the state or federal level, or wish to get involved in our Executive Policy Council, please contact Lew McMurran, lmcmurran@washingtontechnology.org, for more information.
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Yesterday, Governor Gregoire signed the supplemental operating budget, SB 6444. You can find it here: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=6444&year=2009
As most of us know, the recession has battered the finances of most states, including Washington. While government spending policies are certainly one factor involved, there is no doubt that the housing bust and unemployment have contributed greatly to the reductions in state revenues, making life difficult for policymakers and elected officials to maintain state services at current levels.
Higher education is one of those areas that has gotten hit very hard in this current biennium. The state's colleges and universities have taken serious cuts. Some would say disproportionately so. However, the reality is that higher education does not have the same level of legislative support as K-12, health care or social services, even though it is a true "investment" in the future of our state.
WTIA has long advocated for greater bachelor's degree production from the state's universities, particularly in STEM disciplines. When Governor Gregoire first came into office in 2005, she and the legislature increased higher funding substantially and made STEM and other "high demand" degrees a priority. The economic downturn unfortunately put us back to the pre-2005 levels. It is going to take time and effort to get back to where the state is meeting demand for engineers, mathmeticians, scientists and technologists.
WTIA has also worked closely with other tech-related associations, such as the Technology Alliance and the Washington Biotechnology and Biomedical Association (WBBA) on higher education issues, K-12 improvement and a favorable business climate for entrepreneurship and innovation.
We jointly drafted a letter that is attached to this post regarding higher education. There is language is the state budget that is intended to protect STEM and other high demand degrees from cuts. The letter asks Gov. Gregoire to ensure that the universities adhere to these provisos. There is some evidence that has not taken place and causes the three organizations concern.
The three groups, which represent the bulk of the state's technology sector, plan to work together in a more coordinated fashion to support those public policies that support the growth of the innovation economy and technology jobs.
If you are interested in learning more about the state budgets and revenue, the Senate Ways and Means Committee provides excellent information about them, http://www.leg.wa.gov/senate/committees/WM/Pages/default.aspx
Here is the link to Gov. Gregoire's press release on the budget: http://www.governor.wa.gov/news/news-view.asp?pressRelease=1488&newsType=1 One good piece of news was her restoration of cuts made to the Life Sciences Discovery Fund.
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Governor Gregoire signed SB 6143 on April 23, paving the way for tax increases, imposition of new taxes and the creation of new tax concepts.
Sales tax will now be applied to bottled water, candy and gum. Taxes are increased at the wholesale and retail level on beer and carbonated beverages.
For WTIA members and the tech industry generally, the biggest impact will be the B&O increase on service businesses. Beginning May 1 through June 30, 2013, the tax rate is now 1.8%, up from 1.5%. There is an exemption for certain R&D related entities, listed specifically on page 93 of the bill.
You can find the complete bill here: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=6143&year=2009 and click on "Session Law" under "available documents". The final bill report is attached to this post.
The rate goes back to 1.5% on July 1, 2013, barring any additional action by the state legislature.
The exempt entities are primarily in physical and life sciences and engineering. No computer or software related businesses are exempt from this tax increase.
Directors of corporate boards that receive compensation will now be taxed at 1.5%; previously this compensation was tax exempt.
In addition to tax increases and new taxes, two new tax concepts are embodied in SB 6143. One is "economic nexus" and the other is "tax avoidance". Under the 1992 U.S. Supreme Court Quill decision, a business must have a physical presence in a state for there to be "nexus" to require that business to collect and remit sales taxes.
However, this is not necessarily the case with other taxes, such as income taxes, or in Washington's case, the B&O tax. A number of other states have adopted this concept. This part of SB 6143 (Part I) sets out the minimum "presence" that businesses must have for their to be B&O liability. One favorable piece of this part of the bill is the ability to apportion royalty income to the state in which the income was earned, instead of having to source 100% of it back to Washington.
The other new concept is that of "tax avoidance" found in Part II of the bill. These sections allow Dept. of Revenue is recharacterize transactions if there is no "economic substance" to them and are done purely for tax reasons. DOR can assess up to a 35% penalty if entities are found to have engaged in "tax avoidance."
Dept. of Revenue has to write rules to implement both sections. WTIA will maintain its involvement and inform you of meetings, hearing or other proceedings related to these and other tax issues.
What is probably most unfortunate about the tax increases that the legislature and Governor imposed on businesses and consumers is that the state is going to have another huge budget problem next year as lawmakers did not truly deal with the big cost drivers, such as state employee pensions and health care and social services program growth. K-12 and higher education were cut, which are the most important areas of state spending. We could be in for more tax increases next year and certainly more budget cuts across the board are in store.
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