Hopkins suggested that Washington's K-12 education system is nothing more than average. And Washington businesses, she said, shoulder unemployment insurance taxes that are the fourth-highest nationally and nearly three times the national average. Many people in the region believe the business climate is one of the unspoken reasons Boeing decided to relocate its headquarters. Washington's business climate is affected by government regulations. The State Freedom Index, constructed by three Clemson University professors, in 1999 ranked Washington as the fifth-most heavily regulated state in the nation.
Taxes are also a factor.
In a study of seven Western states for the years 1997-98, the Utah State Tax Commission noted that as a percentage of gross state product, Washington had the highest level of taxes paid by businesses, 4.4 percent. And businesses accounted for 47 percent of the state's revenue from major taxes. Business associations representing large and small employers in Washington for years have argued that the business climate matters. Additional regulatory reforms, more legislative oversight of state agency actions, some changes to the tax system, reform of the unemployment insurance system and a heavy dose of transportation improvements would change the perception of employers, Logue said. Upon reviewing the Legislature's record during the 1990s, Independent Business Association director Gary Smith said its overall tenor was harmful to employers.