Spokane Journal of Business

Cross-border metro area nears

Spokane, Kootenai counties on track to become one statistical area in 2003; not everyone happy

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Spokane and Kootenai counties could become one metropolitan area in the eyes of statisticians, economists, and relocation consultants after figures are tallied from the 2000 U.S. censusno matter what either county has to say about it.

Combining the two counties into one core-based statistical area (CBSA, in the parlance of the U.S. Census Bureau) may seem like a wonkish exercise, but it would have some important ramifications for the region, economists and business leaders in the Inland Northwest say.

For example, Kootenai Medical Center, in Coeur dAlene, would receive about $3 million more per year in Medicare revenue for doing the same things it does now, says Tom Legel, the hospitals chief financial officer. Thats because Medicare reimbursement rates are based on statistical areas, he says. Indeed, any doctors or nursing homes in Coeur dAlene that are reimbursed by Medicare likely stand to gain from Spokane and Coeur dAlene becoming one CBSA, Legel says.

In the long term, a combined statistical designationsomething we used to know as an MSA, but in the future will be called a CBSAcould help the two-county area attract more new and relocating businesses, economic-development sources say.

As a combined statistical area, Spokane-Kootenais population would cross the 500,000 markwhat one Spokane community-development official calls the magic thresholdso the area would show up on more lists of potential sites for new and relocating businesses.

I really think its rather powerfully important that this happen, says Dale Strom, a planner in Spokanes community development department. Its going to put us on radar screens that were not showing up on now.

However, some people in Kootenai County believe that a combined metropolitan area would threaten their areas identity to the rest of the world.

This is North Idaho, not the greater Spokane metropolitan area, the Coeur dAlene Press argued in December in an editorial opposing a combined statistical area. Chambers of commerce and business groups throughout North Idaho should be prepared to oppose continuing efforts by Spokane business and marketing interests to expand its Metropolitan Statistical Area to include Coeur dAlene and North Idaho . It is a move that would be meaningless for North Idaho and, in fact, would be harmful in that it would remove this regions identity when viewed from a national marketing viewpoint.

Coeur dAlene Mayor Steve Judy declined comment for this story.

Combination likely

In many cases, however, cities and counties have no choice in the matter.

New proposed recommendations governing the creation of CBSAs give scant weight to local opinion, compared with the standards that were in force after the 1990 census. The federal Office of Management and Budget has final say on whether those recommendations become the new standards; a decision will be made before the April 1 census.

We try to limit that (local opinion) to be as objective as possible, says Colleen Joyce, of the Census Bureaus population division in Maryland. Local opinion has no bearing at all if the linkage between the two counties is strong, she says. Only in marginal cases does local opinion carry any weight, she says.

Linkage between two areas is determined by the number of people who live in one county and work in the other.

Based on figures from the 1990 census, Spokane and Kootenai counties have enough cross-border commuters to qualify as a combined area under the proposed standards, although the linkage isnt strong enough to override local objections, says Michael Ratcliffe, a geographer with the Census Bureau.

I would think, from what we know of the two areas, that if they combined using 1990 data they would continue to combine using 2000 data, Ratcliffe says. The big question that will be answered by the 2000 census is whether the level of cross-border commuting has risen enough to statistically merge the two counties, in which case local opinion wouldnt come into play. And that question probably wont be answered before 2003, which is when new statistical designations will be announced.

Strom says hes confident the linkage will be strong.

Its not meant to be a political thing, says Strom, who has researched the subject extensively on behalf of the nonprofit Spokane-Kootenai County Real Estate Research Committee. If it meets the standards, boom, they do it. Even though some people in Kootenai County are not going to want to be associated with us, theyre not going to be likely to stop it.

Likewise, the name of the new statistical area wouldnt be negotiable: The name of the largest principle city in the CBSAin this case Spokanetakes precedence, followed by the names of the second- and third-largest cities.

Important in site selection

Many people already view Spokane and Coeur dAlene as one economic entity, and economic-development officials market it that way, sources say.

From my point of view at Jobs Plus, (the statistical designation) doesnt cause me any grief one way or another, says Bob Potter, president of Jobs Plus Inc., the Coeur dAlene-based economic-development organization. I make it a regional approach to recruiting anyway. I need to point out to the client that our labor market includes Spokane County and Kootenai County, and our proposals to clients are all built like that.

The real importance of the statistical designation is in relocation and site selection, says Randy Barcus, an economist at Spokane-based Avista Corp.

When a lot of relocation consulting companies do studies, they have certain screening criteria they use, he says. If their screens pull communities of such and such a size, lets say that size is 500,000, we wouldnt be there. But we would be over 500,000 if the (statistical area) included Kootenai County.

Barcus explains that a population of 500,000 is a commonly used cut-off point because employers believe it takes that many people to ensure an adequate labor pool, or, conversely, to ensure a large enough local market to sell products.

Barcus says hes all for changing the statistical designation because of the implication it has on improving our prospects for growth and development. Jonathan Coe, president of the Coeur dAlene Area Chamber of Commerce, acknowledges that there is a wide range of attitudes toward the statistical designation, but says combining both areas into one would give us a little more standing in the recruiting business. That would be something of a plus for us.

Whatever happens with the issue, it wont affect the considerable economic interaction between the two counties that takes place every day, Barcus says.

There are only two groups of people who view the state line as significant: the politicians and the bureaucrats, he says. Regular people dont care.

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