During 1996-97, state agencies in Washington worked to implement the state's High Skills, High Wages Plan for Workforce Training and Education, focusing on seven most urgently needed actions to ensure that the people of the state succeed in an economy that requires ever higher levels of skill and knowledge. The seven actions are the following: (1) implement continuous improvement throughout the workforce training and education system; (2) increase capacity of the work force training and education system; (3) implement school-to-work transition; (4) vertically integrate the workforce training and education system; (5) increase public awareness of workforce training and education issues and initiatives; (6) make welfare reform work; and (7) connect workforce training and education with economic development. During the 1997 fiscal year (July 1996-June 1997), progress was made toward those goals, in cooperation with private sector partners and other state agencies. Much work remained to be done, however, with the biggest challenges for the next year expected to include continued work to establish a school-to-work transition system for high school students; infusing the performance management for continuous improvement system throughout the agencies and programs of the workforce development system; and vertically integrating the elements of the workforce training and education system to meet the needs of employers, workers, and the economy for workforce training. (KC)