Spokane Journal of Business

Legislative outlook: Spokane advocates seek $160 million-plus for projects, initiatives

Business advocates to fight tax increases first, though

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-KPFF Consulting Engineers
Rehabilitation of the Don Kardong pedestrian bridge in Spokane's University District is one of a number of projects for which the city of Spokane will seek state funding.

Spokane-area interests are seeking funding for education, transportation, health care, and community projects and initiatives valued at more than $160 million during the upcoming state legislative session. 

But first, some plan to oppose a new capital gains tax and increases in business-and-occupation taxes to supplement the state’s budget. 

Todd Mielke, CEO of economic development agency Greater Spokane Inc., says the issue of tax policy will likely be the first focus in the 2019 legislative session, following the release earlier this month of Gov. Jay Inslee’s proposed budget.

“I think a big focus will be on how much the Legislature is willing to spend and how much they’re willing to tax,” he says. “GSI will be looking to support legislation that doesn’t unduly increase taxes on businesses or take away from incentives, as our state already has very few of those.”

Of B&O taxes specifically, Mielke says, “This hurts all business, but especially those that have razor-thin profit margins. The governor is proposing an increase of the B&O tax for certain service sectors, from 1.5 percent to 2.5 percent of gross earnings, a 67 percent increase.”

Mielke says GSI also believes the proposed capital gains tax to be an unfair tax on business owners who have worked to create successful businesses.

“Often business owners rely on their business to fund their retirement savings,” he says. “For those nearing retirement, they never calculated the additional 9 percent tax (from Inslee’s proposed capital gains tax) into their calculations. It’s a significant new tax that reduces their retirement savings.”

Mielke says Inslee’s proposed spending plan appears to be focused on physical and mental health care, education, and the environment, all issues that GSI supports. However, he adds, GSI believes the governor’s spending plan must be balanced against the state’s means.

Since the end of the last legislative session, the state has booked about $1.3 billion in additional revenue for future spending, Mielke points out. The governor’s proposed package spends all of the additional revenue and then some, with the proposed tax increases that have the potential to hamper business. 

“The growth of government spending should not outpace the growth of the economy,” he says.

Mielke says GSI’s goals this year for the Spokane region include creating a healthier business climate, enhancing the health of the community, seeking funding for educational attainment and workforce development, advancing transportation policies and funding, and supporting the priorities and projects of its partners in the region.

Altogether, Mielke says GSI is advocating sustained or increased funding along the entire educational spectrum, and approximately $80 million for higher education spending in support of economic and workforce development in the Spokane area.

He says GSI also is advocating to retain the funding for the North Spokane Corridor and an additional $12 million in support of other transportation projects, as well as supporting community projects that include maintenance of current infrastructure.

Education

Mark Anderson, Spokane Public Schools’ associate superintendent for support services, says the district continues to focus this year on ensuring full implementation of the education funding plan as required by the state Supreme Court’s McCleary decision.

The ruling required more funding for education, which the state previously estimated is costing a total of $19.7 billion during the current biennium. 

“While the Legislature did meet most of the McCleary funding obligation, there are still some areas that are in need of some tweaking,” he says. “Among those are funding for special education, school nurses, and student mental health support.”

The McCleary decision also requires the state to provide funding to reduce class sizes in kindergarten through third grades to no more than 17 students per teacher next year.

“We don’t currently have enough classrooms to meet the class-size reduction targets, so we’re asking for a delay until those facilities can be constructed,” he says.

Anderson says the district also is petitioning the Legislature to provide adequate capital funding for school construction, with updated formulas that better reflect construction costs.

“We have several upcoming projects that could potentially qualify for state-matched funding depending on what’s decided with regard to those new formulas,” he says. “Current formulas will provide funding for replacement construction but not any additions or new construction work.”

Anderson says the district plans an eight-classroom addition for Wilson Elementary this spring, and that project is expected to receive at least partial state funding for two replacement classrooms.

Two more upcoming projects—replacing Shaw and Glover middle schools—also are expected to receive some state-matched funding. Both of those projects will be in design this year with construction to start in February 2020, he says.

The district is hoping that adjusted formulas will make it possible for planned future projects including the building of two new middle schools—one along east North Foothills drive near Gonzaga Preparatory School and another near the Joe Albi stadium site in northwest Spokane—to receive a greater portion of state-matched funding. 

Anderson says additional goals for the Spokane School District in the upcoming session involve providing school districts with greater flexibility in determining tests and graduation requirements, further investments in student safety, and improvements in the educator workforce.

In terms of education, Mielke says GSI plans to continue looking at ways the community can improve education-attainment levels.

“We want to continue to provide support for students at all education levels and improve access to post-high school education and career opportunities through programs like the Washington State Opportunity Scholarship, Career Connected Learning initiatives, and the State Needs Grant,” he says. 

Mielke says GSI also wants to maintain support and funding for higher education programs like Washington State University’s Elson S. Floyd College of Medicine and the University of Washington School of Medicine & Gonzaga University Regional Health Partnership. 

He says GSI also continues to support legislative funding for several upcoming higher education projects including: Washington State University’s Spokane Biomedical and Health Sciences Building Phase II project, construction of the new Washington Animal Disease Diagnostic Laboratory at WSU, and the replacement of the Fine Arts Building at Spokane Falls Community College.

Health Care

In health care, Mielke says GSI’s focus continues to be on improving access to health care for all and supporting the resources needed to identify and address public health issues in the community.

“Twenty percent of our local economy is health care based, so this is another category in which we’re looking to expand current businesses and recruit new ones to the area,” he says. “We also want to continue to grow and stay competitive in research through continued funding of the Health Sciences & Services Authority.”

Mielke says this year GSI also plans to support a Nurse Licensure Compact, which would enable nurses from a number of others states to work in Washington state without having to attain additional licenses.

“We’re critically short of nurses in all areas of health care, not just in our region but also across the state and nationally,” he says. “We’d like to see Washington join this compact as a way of bringing more qualified nurses here to meet the demand.”

Transportation

Mielke says GSI’s top priority in the area of transportation is to continue to protect funding secured in the Connecting Washington package for the North-South Corridor. 

“The funding for that project was allocated a few years ago, but as the state develops new priorities, we want to continue to ensure that money isn’t diverted from that project as it moves toward completion,” he says. 

Going forward, Mielke says the organization is also looking to support upcoming transit projects as well as those aimed at reducing traffic congestion. 

“Public transportation is an important part of that, as are projects that address areas where infrastructure is struggling to accommodate traffic flows and demands from a growing population,” he says.

Marlene Feist, spokeswoman for the city of Spokane, says the city is seeking funding for several upcoming projects, including rehabilitating the Don Kardong pedestrian bridge near Gonzaga University and the north suspension bridge in Riverfront Park.

Annie Gannon, spokeswoman for Spokane Valley, says the city is seeking further funding for Bridging the Valley, a series of projects aimed at separating vehicle and train traffic in Spokane Valley. That includes funding for the start of construction on the first phase of the Barker Road Grade Separation Project.

The city is also seeking a state match in funding for the second phase of the Pines Road-BNSF Grade Separation project, and a state match in funding for the conversion of Browns Park at 3101 S. Pines into a multipurpose park venue.

Other Priorities

Mielke says GSI continues to support funding for projects being considered by cities in the Spokane area that support efficient uses of existing infrastructure and improve overall quality of life.

Three of the larger projects Mielke says the organization is advocating include $32 million in funding for the Airport Administration Building and Conference Center at Spokane International Airport, $5.5 million for the Fairchild Airforce Base Highland Village Housing project, and support for a joint request from the Washington state Department of Corrections and the City of Airway Heights for $1.9 million to reclaim nonpotable water.

Spokane City Councilman Breann Beggs says the city is once again advocating for a program for the supervision of people convicted of motor vehicle-related offenses or property offenses.

“This year, rather than a pilot program for Spokane County, this program is being considered for statewide adoption, as a way of connecting property crime offenders with structure and services that would help them to not reoffend,” he says.

LeAnn Bjerken
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Reporter LeAnn Bjerken covers health care at the Journal of Business. A Minnesota native and cat lover, she enjoys beachside vacations and writing poetry. LeAnn has worked for the Journal since 2015.

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