► On the Record

"Thanksgiving dinners take eighteen hours to prepare. They are consumed in twelve minutes. [Football] Half-times take twelve minutes. This is not coincidence."

- Legendary columnist Erma Bombeck (1927-1996)

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

The case for taxes

Chances are you’ve scanned this headline and wondered, “What in the world is this editor drinking?” To actually suggest that a case can, or should be, made for a scourge afflicting humanity since the dawn of commerce seems completely against the values of most members of this business community.

However, one fact cannot be ignored – our tax system is broken, and if we are to emerge from this recession stronger than we were entering into it, we need a common-sense approach to funding government services essential to business growth and prosperity.

In order to do this, our business community should take the lead on the following measures: finally overturning the overly-burdensome Business & Occupation tax, as well as repealing the 1 percent cap on property tax increases throughout the state.

Here’s why it’s so important that one tax be eliminated and the shackles restricting another tax be removed:

Our government, at least at the county level, is going broke.

Last Friday, the Clark County Budget Office announced its recommendation of a $12.4 million cut of the 2010 General Fund operating budget, the third steep reduction in the past year.

Faced with the sudden loss of revenue from an unprecedented residential and commercial housing boom, the full effect of Tim Eyman’s misguided Initiative 747, passed in 2001 and capping an essential stream of government funding growth to a measly 1 percent per year, is now painfully clear.

On Dec. 31, the Clark County Sheriffs Department will let go of 16 deputies, more and more road maintenance projects will be deferred and our Health Department will continue to be increasingly dependent on nonprofit assistance to provide services essential to the wellbeing of all residents.

And that’s not all. For what the future beyond 2010 might hold if I-747 (upheld by the Washington Legislature in 2007 after the state Supreme Court ruled it unconstitutional) continues to strangle local government, we need only turn our gaze to the south.

California’s budget apocalypse, a business-killing cataclysm with no clear end in sight, can be traced back to 1978 with voter passage of Proposition 13, which caps property values at 1 percent of its assessed value at the time of sale.

Here in Washington, surely we can learn from another state’s mistake – for proof, one need look only to earlier this month, with a majority of state residents rejecting another Eyman initiative that failed so miserably in Colorado a decade ago.

However, before you term this New York native as another tax-loving liberal, the second part of my proposal involves killing off another long-hated levy – the B&O – for good.

The B&O, a tax on all gross receipts, has long been a burden on small businesses, stifling growth and innovation among revenue-generating and job-creating companies.

One common-sense alternative to the B&O is the replacement of the current gross receipts tax paid on each business activity with a gross receipts margins tax based on total receipts, an idea proposed by Center for Small Business director Carl Gipson and Center for Government Reform director Jason Mercier.

Along with the legislative overturn of the tenets of I-747, this alternative business tax might be just the proposal to put both local government and business on the road to a responsible and sustainable economic recovery.

Happy Thanksgiving

From all of us at the VBJ, happy holiday wishes to you and yours.

As a reminder: since the editor plans to be in the grip of a 48-hour tryptophan-induced coma, Just Business will not appear this Friday. Our column will resume Wednesday, Dec. 2.

Business Around the Northwest

Clark County waterfront dispute winds down, Portland Daily Journal of Commerce

FDIC shows banks recovering, not lending, South Sound Business Examiner

More than a quarter of households to shop Friday, Idaho Business Review

► On the Record

“The widespread and growing lack of health insurance in Washington state is hurting families, communities and our state’s economy in ways that we can no longer afford to ignore.”

– Washington state Insurance Commissioner Mike Kreidler. A commission-sponsored report released Thursday predicted the number of uninsured Washingtonians would soon hit one million, costing the state nearly $1 billion in uncompensated medical care.

Reporter's Notebook

- Steve McDonagh can be contacted at smcdonagh@vbjusa.com

Taking the good news with the bad

It’s not all Gloom and Doom out there.

While the bottom of the recession has been reached at least seven times in the national media and the term “jobless recovery” is quickly becoming a punch line to jokes that are only funny to those who are still employed, the economy really isn’t as bad as it was just a year ago.

Don’t get me wrong: it’s still bad out there and could get worse, depending on how certain future events unfurl – with Mother Nature having a say in things, I am sure.

But more and more often, I hear from business people that are doing better or at least are a little more optimistic about the future. Mind you, no one speaks publicly about this because there are plenty of businesses still teetering on the edge, making those who are doing well right now or starting to see an upswing in orders a little loathe to talk.

However, I did speak with the owner of a local IT company last week who told me that they had their best October ever this year. Another local business owner said he is busier than last year with fewer and shorter gaps between being busy.

At the VBJ, we try to bring you the stories and information important to you. What readers have told us in the past is that they want to know who is doing well and to the extent they are willing to share the secrets to their success, or at least their best practices, for the benefit of other members of the business community.

Our readers also tell us they want to hear about the businesses that don’t make it, with an emphasis on the “how” and the “why,” so that maybe they can learn from the misfortune of others in order to avoid their own.

As we continue to cover this turbulent and trying business environment, the VBJ occasionally receives emails and comments about running “negative stories.” However, we will continue to tell the stories we think our readers want. More often than not, it is a business success story. But we would be remiss if we only reported the positive and skipped the story on the store that failed on Main Street, closed their doors on 99th, or downsized their space out on 192nd.

So tell us what you think, what you like and what you want to know. We’ll do our best to bring it to you in a way that informs, educates and empowers our business community.

Friday Fish Wrap

Paul Speer retired but NOT, again, Congrats Paul……Gina Bacon back at the Chamber and communicating…David Lawson, a Class act…..Dennis Pavlina serving up Bones and recommendations.…Jim Jacks demonstrating his Tao of Pooh…...Tom Hunt paying off and hanging with the young dogs.. …Ralph Stevens – eerily quiet… TVD hawking phones and counting touchdowns….Robert Stewart first one in the pool ….Temple Lenz taking a break and looking for the next one… …Courtney Givens working and celebrating the Under 40 luncheon - well deserved and THANK YOU! …… Bob Dingethal every week is a bye week…..Bye, Bye.

Business Around the Northwest

U.S. manufacturing hits growth spurt, Kitsap Peninsula Business Journal

Papa Murphy’s up for sale, Portland Business Journal

Stimulus health care coverage deadline looms for laid-off workers, Idaho Business Review

► On the Record

“My sense is that we have somewhat stabilized. There is the sense that we’ve finally hit bottom.”

-- Deborah Ewing, vice president of Vancouver commercial real estate brokerage Eric Fuller & Associates, reacting to news of the $8.3 million sale of Quad 205 Business Park on Tuesday.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

An apology – and cash – from Goldman Sachs

They were more than participants in the largest market meltdown in history – they were pioneers in the creation of the complex financial instruments, such as credit default swaps, that helped make it happen.

And now, more than a year after the crash froze credit lines for thousands of small businesses, including many in Southwest Washington, Goldman Sachs says it’s sorry.

The investment house-turned-banking giant announced today that it would launch a $500 million initiative to help 10,000 small businesses. The fund will be partly run by Goldman majority shareholder Warren Buffett, who said the program would provide “greater access to know-how and capital – two ingredients critical to success.”

Access to capital critical to success? Thanks for the tip, Mr. Buffett.

The continuing unavailability of credit for established small businesses locally has to be the most puzzling aspect of this year’s economic downturn – even more so given President Obama and Treasury Secretary Geithner’s almost daily pronouncements of victory over the financial crisis.

To be sure, $200 million will go far to help some cash-starved businesses – even perhaps a few here in Clark County – ramp up spending and start hiring again.

However, here’s another figure to consider: $10.5 billion.

That’s the amount of small business lending sucked out of the system in the last six months by 22 of the nation's largest banks – many of which were recipients of taxpayer money via the Troubled Asset Relief Program. Long an investment and trading institution, Goldman joined the savings-and-loan ranks as a condition of its own bailout package late last year.

So let’s put these figures in perspective: if $10.5 billion is a gash requiring stitches, then $200 million seems more like a Band-aid.

However, cash wasn’t all Goldman had to offer today. Nearly 14 months after an unregulated derivative and credit default swap trading market helped almost bring the entire financial system to near collapse, this apology: “We participated in things that were clearly wrong and have reason to regret,” said Goldman CEO Lloyd Blankfein today in New York.

Thanks Lloyd.

As for Warren Buffett’s unapologetically naïve comments regarding capital flows to small businesses? Don’t worry, we won’t take it personally, Warren – we’ll still take your money.

Business Around the Northwest

Assurances from FDIC, South Sound Business Examiner

Horizon Bank accepts VP Hoekstra’s resignation, Bellingham Business Journal

The world will feed the world, Idaho Business Journal

► On the Record

“Just because your voice reaches halfway around the world doesn't mean you are wiser than when it reached only to the end of the bar."

– Veteran radio and TV news journalist Edward R. Murrow (1908-1965)

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

The curious case of Brian Baird

Much like the residents of the 3rd Legislative District he represents, Brian Baird likes to go his own way.

In 2006, as Iraq seemed poised on the precipice of sectarian apocalypse, the Vancouver Democrat stood behind then-President George W. Bush’s troop surge, almost completely alone among the anti-war rank-and-file of his own party.

More recently, in the thick of this year’s healthcare debate, Baird penned an editorial last month advocating the replacement of popular government-run healthcare programs such as Medicare with a pre-paid system combined with catastrophic insurance. Interesting? Perhaps. But it was miles away from any reform proposal, Republican or Democratic, then being debated on Capitol Hill.

Then came last weekend’s big healthcare vote in the U.S. House, with a sweeping $1.2 trillion reform bill barely squeaking past 220-215. Joining Baird in their “No” votes were 176 of 177 House Republicans and a group of Democrats mostly from districts either won by last year’s presidential GOP nominee John McCain or narrowly won by President Barack Obama.

Baird was one of only four Dems representing districts Obama carried last year by five percentage points or more to vote against the healthcare reform bill – a list including single-payer healthcare proponent Dennis Kucinich and Artur Davis, an Alabama Democrat preparing a gubernatorial campaign in one of the most conservative states in the Union.

As for Baird? In a statement released on the eve of the vote, Baird praised his party’s healthcare bill, calling attention to a number of improvements and elements “that could at long last correct the Medicare payment disparities that disadvantage our state,” before going on to write that he was voting against the bill anyway.

One of the reasons behind his “No” vote, according to Baird, was that there was not enough time to consider Republican amendments to the legislation – a concern apparently held without regard to the GOP-led chants of “Kill the Bill” outside the Capitol last week.

As written here and here, the spiraling cost of employee healthcare coverage is the number one issue for small businesses – one that threatens the survival of those lucky or nimble enough to get this far through the deepest and most prolonged recession in 60 years.

These are concerns that Baird, as evidenced by VBJ’s Q&A with the Congressman last September, shares with his business constituency – making his vote against the healthcare bill all the more puzzling.

Make no mistake: the Congressman’s willingness to strike out on his own path, regardless of party or political expediency, may be one of his best qualities.

Even some of the mightiest doves in the Iraq debate of 2006-7 now agree with Baird that the surge was the right course, paving the way to relative stability in a nation still plagued with continuing violence and political turmoil.

However, when it comes to Baird’s choice of sides in this latest national debate, the passage of time may prove to be far less forgiving.

Business Around the Northwest

I-5 Bridge hits gridlock, Portland Business Journal

Columbia River Crossing faces obstacles in its path, Portland Daily Journal of Commerce

At work on recovery, Spokane Journal of Business

► On the Record

“For these reasons, until more information is available on premium estimates and Medicare impacts, I will vote against the legislation in its current form.”

– Rep. Brian Baird (D-Vancouver), in a statement explaining his “No” vote on H.R. 3962 – The Affordable Health Care for America Act. The bill passed the U.S. House 220-215 last weekend.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

The truth behind the “ultimate sacrifice”

Whether it be called Fort Vancouver, or just plain Vancouver, Washington, this is a community that places a high value on service to one’s country.

Nearly 2,400 Washingtonians are stationed at posts throughout the world. Only last August, nearly 150 Clark County residents returned home from battle zones in Iraq and Afghanistan, with about a hundred remaining behind enemy lines.

On this Veterans Day, many Americans will remember the sacrifices and services of wars and military actions past. However, this year also brings sobering reflection on the ever-increasing list of perils facing our servicemen and women stationed abroad, and tragically and inexplicably, here at home as well.

What we term the “ultimate sacrifice” may seem poetic, full of much-deserved honor, dignity and respect. But underlying this phrase is the gritty reality of death, often inglorious, tragic and incomprehensible.

Politics aside, as President Obama prepares to decide the future course of this $231 billion (and counting) Afghan conflict, here’s a number, amongst many others, for him to keep in mind – 18.

That’s the number of Washingtonians killed in Afghanistan, including 25-year-old U.S. Army PFC Christopher “Ian” Walz, a Hudson’s Bay Graduate, Clark College student and a longtime Vancouver WinCo market employee with dreams of experiencing the wider world beyond his hometown.

“He really just wanted to travel, and he found the military was a way to do that,” WinCo produce department supervisor Shane Budge told the VBJ this week. “He had the travel bug.”

On Oct. 27, Walz was killed when his military vehicle hit an improvised explosive device in the Arghandab Valley near Kandahar. He was the eighth soldier stationed at Fort Lewis to die on the same day in an eight-year Afghan war against an insurgency growing bolder and deadlier with each new deployment of fresh American troops.

Back in Hazel Dell, Budge remembers Walz as a diligent employee, always smiling, with a laugh that he said stays with many employees at the store – many of whom worked with the fallen soldier for close to six years.

“I’ll always remember him as a good kid,” he said.

There’s something else Budge recalls clearly: Walz’ enthusiasm regarding Obama’s historic candidacy last year, made all the more poignant since it was the President who greeted this fallen soldier upon his return on his final voyage home.

Business Around the Northwest

Business execs more optimistic, South Sound Business Examiner

Retailers voice merry outlook, Spokane Journal of Business

Small Business Index rises, Idaho Business Journal

► On the Record

“A bank is a place where they lend you an umbrella in fair weather and ask for it back the minute it begins to rain.”

-- Robert Frost (1874-1963)

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

A message to the mayor-elect

After the most expensive race in city history, today there is no doubt that Councilman Tim Leavitt will become the 57th mayor of Vancouver. And like anyone else campaigning in a hard-fought election for the past eight months, perhaps he feels like he’s in for a little break.

But if mayor-elect Leavitt is looking for a vacation, he’s in the wrong place, at the wrong time.

The problems our city and region faces are too important to wait for Day One of the Leavitt Administration.

After covering his campaign this summer and fall, it is clear Tim cares deeply about a city he’s called home since childhood. But in regards to certain promises made on the campaign trail to the business community – well, we plan to hold him accountable in the coming months.

First and foremost on that list – jobs. Clark County continues to be one of the hardest-hit in terms of unemployment in the state. Firms just emerging from the longest recession in 60 years are still reluctant to hire. Many other companies, retail outlets and restaurants have shut their doors for good.

When we talk about jobs, other issues seem to diminish in impact. For example, the controversy over proposed CRC bridge tolls would be far less pressing if thousands of Clark County residents did not have to commute to jobs in Oregon everyday.

Mayor Pollard was willing to travel anywhere, anytime if it meant landing a new business for Vancouver. His successor has a golden opportunity to coax across the river Oregon business owners nervous about impending tax hikes, as well as California companies looking to ditch a state notoriously unfriendly to business interests for one ranked in the Forbes Top Ten.

Second, the mayor-elect needs not only to keep his promise to convene a business advisory council, but to carefully select its members. The council should be composed of business leaders from companies of all sizes and all economic sectors, including those who may have supported the incumbent in this year’s election.

So Mr. Mayor-elect, if you’re out there – the time for decisive action not only to help sustain our economy, but to be an integral part of its growth, starts now.

Business Around the Northwest

Cut prices? Raise value? Both play part in strategy plan, South Sound Business Examiner

Encoder maker sees economy as bottoming, Spokane Journal of Business

Report: hiring to improve in November, Portland Business Journal

► On the Record

“We are disappointed in last night's results, but the voters did speak and we will respect their decision.”

-- Marsha Manning, campaign manager for Vancouver Mayor Royce Pollard’s reelection campaign (see VBJ’s story on Election Day here).

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

The opposite of exuberance

In 1996, then Federal Reserve Chief Alan Greenspan famously coined the phrase “irrational exuberance” in regards to imprudent dot-com era investors.

Fast-forward to 2009, with this reporter looking up an antonym for “exuberance” in an attempt to describe the current state of the regional economy.

Apathy? Lethargy, perhaps?

By any name, it seems just as irrational as the overly-speculative dot-com boom or the debt-filled housing bubble of the last decade.

My awakening came as I reported the closure of Princeton Athletic Club last week. Researching past articles on the business, I discovered a quote from PAC owner David Lawson, talking about downtown Vancouver’s economic prospects in the fall of 2007.

It was like reading a note from my third grade self buried next to the jungle gym in a time capsule – distant, yet strangely familiar.

“I like the area, and it has obvious advantages with the new construction coming in and the growth,” PAC’s owner said in the Oct. 5, 2007 edition of the VBJ.

Instead of reveling in the fruits of a downtown boom, today David is unemployed and his business bank-owned, with a last-ditch effort to modify his loan shot down because his lender “didn’t see growth potential in the area,” he told me this week.

Here’s my reply to David’s lender regarding the apparent lack of growth in Vancouver, Washington:

My hometown of Albany, New York – the capital of the fourth-largest state in the Union – has been stuck at around 95,000 inhabitants for decades. By contrast, Vancouver today has 162,400 people, up from 143,560 in 2000 and 32,464 in 1960.

And let’s not forget nearly $1 billion in private waterfront investment set to break ground nearly a stone’s throw away from PAC’s newly-minted “no growth” zone.

In America, there is a trend towards seeing the market as heading upward indefinitely – i.e. the years 2004-7; 1996-9 and 1923-9 – or caught in a never-ending death spiral.

However, denying a business a life raft during one of the longest recessions since WWII because of a lack of growth potential in this still-growing city’s downtown core is what I call “irrational apathy” – or lethargy, if you prefer.

Business Around the Northwest

FBI issues small business alert, South Sound Business Examiner

High Tech poised to lead Washington’s recovery, Kitsap Peninsula Business Journal

Low-turnout election provides few clues on Boise streetcar, Idaho Business Journal