JIM KUNTZ had the right site - 1,200 acres of industrial-zoned land with plenty of water; highway, rail and even nearby barge access; and a ready source of cheap raw materials literally right next door.

The Port of Walla Walla's executive director had the right team, too: the backing of local leaders, the community college's promise to provide workforce training, support from officials in Olympia. Even the governor was on board.

What Kuntz didn't have was tens of millions of dollars in tax giveaways. Utah did, and that's why Procter & Gamble will build its next paper products plant in the sagebrush desert north of Salt Lake City, leaving Kuntz and his team squeezing the Charmin.

"I don't think we competed at all, when it came to incentives," Kuntz says.

Washington failed with Project Gold Rush, as the campaign to land P&G's $315 million factory was labeled. This sparked a round of debate on an evergreen issue in the Evergreen State: Shouldn't we offer better incentives to attract new manufacturing businesses?

A LEGISLATIVE ANSWER

Expect the issue to get at least some play in Olympia during the upcoming session, legislators told the Washington Economic Development Association last fall.

"We need to have real tax abatement," Rep. Larry Haler (R-Richland) told the group. "That's heresy, but that's where I'm coming from."

Washington is working with economic development rules created in the 1980s, when the state's fishing and logging industries were in crisis, says David Kleisch, who's chairman of the WEDA policy committee. It's time to overhaul them, he says.

"It really is a statewide issue," Kleisch says. "We need this toolbox."

The Procter & Gamble campaign was one of the big economic development efforts in the Western states last year. The company was looking for a place to manufacture household paper products, Bounty paper towels and Charmin bathroom tissue among them.

When it opens, the plant is expected to employ about 300 people at above-average salaries, according to officials in Utah. But P&G expects to expand its facility over the next decade, projecting a workforce of 900 by 2018.

Jobs of that kind would have been welcome in western Walla Walla County, where the median household income of $40,000 a year is 30 percent below the state's median. The new plant would have become the county's largest taxpayer.

When P&G came looking, the Port of Walla Walla proposed land it owns near Wallula, an unincorporated community on the sagebrush-covered banks of the Columbia River, just east of Pasco. It's a greenfield site, with zoning in place and a business-friendly local government. And Boise Cascade already operates a pulp and cardboard mill nearby - which could have supplied raw material to the plant.

"They liked our site simply because it was zoned correctly and had the abundant water they needed," Kuntz says. They also liked its proximity to the Tri-Cities, which has a "very productive labor force with a lot of engineers."

But after months of courting, P&G stopped calling. It had settled on two finalists - Boardman, Ore., and Brigham City, Utah. Kuntz was waiting this fall for an exit meeting with Procter & Gamble's site selection team to discuss why Wallula wasn't on the list, but he had an easy guess - tax incentives.

Oregon offered to wipe out 15 years of state property taxes and 10 years of state income taxes, if Procter & Gamble located there - a package worth at least $45 million. But Utah outbid them with a tax rebate package worth $85 million.