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DECISION PACKAGE TITLE:  Border Policy Research Institute

Agency Recommendation Summary Text

State support for Western’s Border Policy Research Institute to ensure that the Institute is afforded an opportunity in 2006-07 and in future years to invest in critical research projects dealing with border issues.

Fiscal Detail

Package Description:

As highlighted by Governor Gregoire, and at the recent Joint Legislative Committee on Economic Development and International Relations (JLCEDIR) in Victoria, the economic interdependence between Washington and Canada, and the potential for disruptions in the cross-border flow of products and tourists, necessitates that state agencies and the private sector have ready access to border expertise.  While many agencies and organizations are already benefiting from the work of the Border Policy Research Institute, including the Pacific Northwest Economic Region (PNWER), the Pacific Corridor Enterprise Council (PACE), the JLCEDIR, and the Whatcom Council of Governments and Chamber of Commerce, the Institute is poised to significantly expand its work during the second year of this biennium, provided that state matching funds are secured. 

A supplemental appropriation in the amount of $375,000 in General Fund-State is requested for FY 2006-07 to cover operating expenses of the Institute.  These funds will provide the flexibility necessary to complete several research projects already underway and to initiate additional and critical research in the areas of energy, trade, port competitiveness, transportation, environmental conflicts, and the impact of national security measures as related to tourism.  The following research projects are currently underway:

·        The Effect of Post-9/11 Security Measures on Commodity Trade Flows at Major Canada/U.S. Ports of Entry

Using data from the U.S. Bureau of Transportation Statistics, time-series models will be estimated for trade flows using pre-9/11 data. Comparison of post-sample forecasts with actual data will indicate which commodities and ports were the most impacted by heightened security measures. These results will reveal which commodities and ports will benefit the most from the allocation of additional border resources.

·        The Impact of Tariff Harmonization and Perimeter Security Measures on Whatcom County's Industrial Structure and Transportation Patterns

The research will predict the effects of tariff harmonization and perimeter security on border regions such as Whatcom County, using results from computational general equilibrium (CGE) methods and local input-output models such as IMPLAN. The study will also draw lessons from the experiences of European border regions following the implementation of the Schengen Agreement. This project will yield predictions about the infrastructure investments implied by proposals to deepen Canada-U.S. trade and security relations.

·        Explaining Border Crossings at U.S.-Canada Border Stations in Whatcom County: An Econometric

Using data on border crossings, exchange rates, taxes and prices on various commodities (especially cigarettes, gasoline, and grocery items), dummy variables for changes in the retail infrastructure, and other factors, the study will estimate time-series models for border flows at US-Canada border stations in Whatcom County. The model(s) will be used to analyze recent trends in border crossings and to make predictions of future border activity. A better understanding of crossings is needed because conventional wisdom and existing models have little, to no, explanatory power. For example, southbound border crossings have declined steadily for many years despite increases in population on both sides of the border, a strengthened Canadian dollar in recent years, and other factors that would suggest an increase in border crossings.)

·        Cross-Border Port Competitiveness and the Environment in the Puget Sound and Georgia Basin.

The project will assess (1) whether the Puget Sound ports are at a competitive disadvantage to the Port of Vancouver as a result of the environmental regime in which they operate, and (2) the options available to the Puget Sound ports to both reduce legal exposure and to contribute to increased environmental sustainability. The analysis will describe a range of legal programs and regimes to determine their potential costs and benefits in the context of the Puget Sound/Georgia Basin Region. The working hypothesis is that regional trans-boundary cooperation between Canadian and Pacific Northwest ports in developing and implementing environmentally beneficial measures would provide competitive benefits to Puget Sound ports.

How the Supplemental contributes to the University’s Strategic Plan:

Community service is one of the primary goals of Western’s Strategic Plan and the work of the Border Research Policy Institute will ensure that state and local communities will have ready access to the expertise necessary to strengthen the state’s capacity to respond to critical border issues.

Measurement of Objectives and Performance Measures:

Outcome measures will track faculty, staff and student participation in research efforts as well as the new university-community relationships fostered through these efforts.  Objectives will also be measured in the area of university planning efforts that result in additional opportunities for Western’s faculty and students.

The Reason for the Supplemental:

In order for the Institute to expand its research in response to pressing needs in 2006-07, ongoing operational support must be obtained.  Significant growth in both trade and people movement across the border has raised critical environmental and land use issues that must be factored into transportation and infrastructure planning and policy making. Trade between Washington and Canada has doubled over the past decade, with Canadian imports to Washington reaching $10 billion in 2003, and Washington’s exports to Canada exceeding $3 billion in the same year.  Most of this trade passes through the “Cascade Gateway,” the set of four border crossings at or near the northern end of the I-5 corridor.  As a result, the volume of truck traffic has expanded at a rate of approximately 10 percent per year since 1990.  With expansion of ports in Seattle, Tacoma, Delta, BC and Vancouver, BC, the truck volume is expected to increase at an even faster rate.  The Peace Arch border crossing each year records 2 million passenger crossings.  In addition, because the region between Whistler and Seattle is a rapidly growing tourist destination for North American and world travelers and with planned Vancouver/Whistler Winter Olympics in 2010, the volume of passenger car traffic in this corridor will increase dramatically.  This growth in mobility has been complicated by the new security considerations involving the international border at the northern entry point of the Cascade Gateway.  Both Canada and the US are committed to achieving a security flow of people with a safe and efficient flow of goods, despite the reality of unprecedented security considerations stemming from the tragic events of September 11, 2001.

The Impact on Students and Services:

As one of the leading teaching and research centers for Canadian studies in the nation, Western’s Border Policy Research Institute provides students with opportunities to participate with faculty on research projects and to explore the possibility of public in the border region.

The Impact on Other State Programs or Other Units of Government:

The work of the Institute has great relevance to state and local government economic, transportation and security concerns.  This is strongly evidenced by the research projects currently underway and the interest of the following organizations in the work of the Institute: the Legislative Committee on Economic Development and International Relations, the Pacific Northwest Economic Region (PNWER), the Pacific Corridor Enterprise Council (PACE), the Whatcom Council of Governments and Chamber of Commerce, and the Pacific Northwest Economic Region.

The relationship, if any, to the state’s capital budget:

None.

Revisions required in an existing statute, Washington Administrative Code (WAC), contract, or state plan in order to implement the change:

None.

Alternatives Explored by the University:

Western has worked diligently to maximize the efficient use of existing financial, staffing and technology resources in its current operating budget.  Consequently, there is no room in our current operating budget to redirect resources to this initiative.

Budget Impacts in Future Biennia:

The amounts requested for operating expenses of the Institute are recurring.

A distinction Between One-Time and Ongoing Functions and Costs:

The $375,000 requested for 2006-07 Institute operations will be ongoing.

Effects of Non-Funding:

Without a state match to support operations, the Institute will need to curtail its planned 2006-07 expansion of research projects.