Policy Council Recap: Challenge Seattle’s Anchor-Industry Strategy, the Governor’s Office on Taxes, and What A Competitive Washington Looks Like

Bellevue Chamber  |  May 13, 2026

May’s Policy Council met for its monthly briefing, welcoming three new members before turning to the business-climate question from two complementary angles. Challenge Seattle, in partnership with Boston Consulting Group, walked the Council through a regional economic-development project focused on anchor industries and the leadership conditions that make them stay. Beau Perschbacher from the governor’s office laid out where Olympia stands on permitting reform, housing supply, and the tax structure the state is increasingly struggling to defend. Diana Leo closed the meeting with a Bellevue Mobility Coalition TBD update and the Sound Transit Enterprise Initiative vote.

Challenge Seattle and the Anchor-Industry Strategy

Challenge Seattle, the 23-organization alliance led by former Governor Chris Gregoire, is partnering with Boston Consulting Group on a regional economic-development project aimed squarely at elected officials. The core argument is clear: the Puget Sound has a globally rare concentration of innovation assets - UW, Fred Hutch, PNNL, the Allen Institute, Amazon, Microsoft, and the ecosystem surrounding them- and that the business climate is now the variable determining whether those assets keep compounding here or begin migrating elsewhere. BCG is studying mayors and governors who have built functioning partnerships with their business communities and folding those case studies into a playbook for the region's elected officials. 

“The business climate is foundational, and what is happening in Olympia and at the local level on tax and regulatory infrastructure and the cost of doing business is what is hampering arguably all the sectors and all of the startups. What has gone wrong and what is off track is the business climate.” — Stephanie Formas, Challenge Seattle Vice President

The most significant moment came when the Council pressed on the urban growth boundary. One senior council member raised - as he had with Senator Cantwell during the Chamber's DC fly-in - why the UGB cannot be moved given Washington's population growth and the up-zones already absorbed under the Growth Management Act. Challenge Seattle’s reaction was telling: it is one of the first times the question has surfaced as a serious policy conversation at the state and regional level. The gap between where jobs are projected to grow and whether there is physical room to build them is finally drawing the attention it warrants. 

The Governor’s Office on Permitting, Housing, and Tax Competitiveness

Beau Perschbacher from the Executive Office of the Governor gave the Council a candid read on three priorities. On permitting, the office is working agency by agency to set processing-time deadlines backed by application, with refunds of application fees when the deadlines slip; the governor-request bill to put the refund structure in statute did not clear the legislature this year and will be brought back. On housing, the strategy is permit reform plus more capital into the trust fund accounts to build supply. On taxes, the office acknowledged what the numbers already show: Washington — the only state without a broad-based income tax, with a regressive existing structure — is now layering on new state-level taxes in a national environment where most other states are lowering income-tax rates.

Bellevue Mobility Coalition TBD Update and Sound Transit

The meeting closed with the Bellevue Mobility Coalition’s framework position on a city Transportation Benefit District (TBD). The framework is straightforward: any new revenue — a $20 vehicle license fee and a 0.1 percent sales tax — should flow back into the transportation infrastructure of the geographies generating it. The Coalition's letter ties TBD funding specifically to Bellevue's highest growth areas: Downtown, Wilburton, BelRed, and Eastgate. Through the November budget cycle, the coalition plans to submit testimony, mobilize employers and stakeholders for public hearings, and stay engaged as the city’s capital improvement plan and TBD framework develop.

The Council also acted on the Sound Transit Enterprise Initiative, weighing a letter that frames emerging mobility technologies as complementary to Sound Transit's build-out — not a substitute for it. 

In summary…

• Challenge Seattle and BCG are building a leadership playbook for regional elected officials — the Puget Sound's innovation assets are world-class, but the business climate is now the variable determining whether they stay
• The urban growth boundary is emerging as a live policy question for the first time: the gap between projected job growth and the physical capacity to build is beginning to register at the state and regional level
• The governor's office is committed to permitting and housing reform, but is openly grappling with a tax structure that is losing ground to competing states — the Chamber will continue pressing for competitiveness as the standard
• The Bellevue Mobility Coalition's TBD position is clear: new revenue should serve the high-growth geographies producing it — engagement continues through the November budget cycle
• The Council's Sound Transit letter draws a line: emerging mobility technology belongs in the plan, not outside it

Read the Letter: Policy Council on the Sound Transit Enterprise Initiative