Puget Sound business leaders warn Washington economy is slipping
Puget Sound business leaders warn of Washington's slipping economy
Some of the largest employers in Washington say the warning signs of an economic decline are clear, and are now urging city and county leaders to pivot quickly.
SEATTLE - Business and civic leaders across the Puget Sound region are warning that Washington state is losing its economic edge, urging regional officials to change course before job losses worsen.
The call to action coincides with mounting pressure on Seattle Mayor Katie Wilson to address public safety concerns and a major budget deficit ahead of her upcoming budget proposal.
Regional partnership launches action plan
Former Gov. Chris Gregoire and the executive coalition Challenge Seattle have launched the Partnership for a Competitive Puget Sound, a new regional initiative aimed at simplifying taxes, cutting bureaucratic red tape and fostering job growth. Supported by more than $1 million in funding, the organization is introducing a "Mayor's Playbook" to rebuild ties between private enterprise and city hall.
The launch comes amid economic warning signs for the region. In 2025, the Puget Sound lost jobs for the first time in decades, according to Gregoire.
Statewide metrics also indicate a declining business environment. Between 2017 and 2026, Washington dropped from 32nd to 47th in the cost of doing business and fell from 31st to 40th in overall business-friendliness. Meanwhile, downtown Seattle office vacancy rates have surged above 35%.
A store connected to a parking garage sits closed at 3rd and Pine in downtown Seattle. (FOX 13 Seattle)
Strengths and goals for regional competitiveness
Despite these economic hurdles, a report produced by the organization shows the Puget Sound's economy maintains seven unique structural strengths:
- A highly educated workforce and strong talent pipelines
- A dense innovation cluster
- Access to cheap and clean energy
- Strong global connection and trade
- Deep federal research and development investment
- A wide federal defense footprint
- A natural environment that draws top talent to the region
To address current challenges, the report outlines seven core goals to boost regional competitiveness:
- Competing together to create one of the most competitive regions in the world
- Creating local business customer service and improving the culture of partnership
- Creating tax structures that are simple, fair, and predictable
- Ensuring policies, regulations, and taxes achieve their intended impact
- Streamlining permitting timelines and complexity
- Connecting talent pipelines to regional employers and hubs of commerce
- Ensuring regional industries are set up to thrive
Seattle Skyline and Space Needle, Puget Sound, Great Northwest. (Photo by Joe Sohm/Visions of America/Universal Images Group via Getty Images)
Business community warns against taxes
Joining business leaders along the Seattle waterfront on Monday, Mayor Wilson acknowledged the city's financial headwinds while stopping short of revealing whether her upcoming budget will include new taxes.
"We are in a very challenging environment where we have a very large budget shortfall, and I'm taking very seriously the need to be economically competitive," Wilson said.
Corporate executives have expressed deep concern over the city's tax policy direction. Microsoft Vice Chair and President Brad Smith warned against expanding municipal tax burdens on employers, stating that nothing would drive away jobs faster than duplicating Seattle's JumpStart payroll tax across the region.
Public safety linked to economic growth
Regional leaders emphasized that public safety and economic prosperity are deeply interconnected, calling on municipal leaders to treat crime reduction as a top economic priority.
Last week, Smith and dozens of business executives signed a letter requesting a public safety action plan from Mayor Wilson within 100 days. Pointing to public safety efforts during the World Cup as an example of successful coordination, leaders urged the city to maintain that level of urgency.
Wilson defended her administration's record, noting that overall crime is at 10-year lows while acknowledging public impatience with street disorder.
"There is far too much crime and public disorder on our streets," Wilson said. "People are frustrated and they are right to feel frustrated, and I, like everyone, want to see faster, more consistent progress."
Seattle corporations call on city to ramp up public safety
Dozens of corporations and other groups are demanding Seattle ramp up public safety and change its current model, including turning on CCTV cameras and upping 911 response times.
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The Source: Information in this story came from Challenge Seattle and original FOX 13 Seattle reporting and interviews.