Spokane Journal of Business

The Journal’s View: Economic development bill could give Spokane a boost

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Border counties in Washington state face major challenges when competing with Idaho and Oregon for businesses looking to relocate or expand. Legislators, especially those representing the Spokane area, should back a bill that would provide a sustainable source of economic development revenue for communities situated on a state line.

Rural counties already receive 0.09 percent of the state’s share of sales and use tax generated within their counties. Senate Bill 5899 would expand that funding to border counties that aren’t classified as rural.

While the proposed change wouldn’t benefit Spokane County exclusively, it would provide a much-needed boost here.

Of the 39 counties in Washington, Spokane County is the only one that both doesn’t have a port district and doesn’t benefit from the rural county sales-tax allocation for economic development. Consequently, business recruitment efforts here often are reactionary, with the county’s designated economic development organization, Greater Spokane Inc., responding to opportunity when it arises and often seeking private dollars to fund its pursuit of such opportunities. A steady funding source could help GSI and other economic development advocates in the county take a more strategic approach to recruiting and retaining employers and jobs.

Compounding the challenges Spokane faces in economic development is its neighbor to the east. Idaho has no business-and-occupation tax, a lower fuel tax, fewer mandates on employers, and a minimum wage that’s $4.75 an hour lower than Washington’s minimum.

Ideally, business recruitment efforts aren’t focused on those that generate minimum-wage jobs, and many of the mandates improve quality of life, which is a big part of what makes Spokane an attractive destination. Regardless, competing against a neighbor with lower costs and fewer burdens takes a well-funded, coordinated effort.

One could argue that a port district would be a better option for Spokane, and they wouldn’t be wrong necessarily. The Journal likely would support creation of a port district here. However, there hasn’t been a new port district created in the state since the 1980s, and many view such an approach as creating another layer of government bureaucracy. One has to question whether there is the political will in Spokane to garner voter support for creation of a port district. At best, it’s a tough sell.

Senate Bill 5899, if passed as currently written, would divert about $31 million in revenue from state coffers per biennium. On one hand, that’s a drop in the bucket for a state with a $44 billion budget that Gov. Jay Inslee wants to stretch into a $52 billion budget. On the other, it’s enough to raise a few eyebrows in Olympia.

To eliminate sticker shock, some have proposed a delayed implementation, starting with no funding in the upcoming biennium, 0.02 percent in economic development funding for border communities in the 2021-23 biennium, and gradually increasing each two-year period after that until reaching the full 0.09 percent in the 2031-33 biennium. 

Clearly, this is a long play for communities like Spokane. But it’s a smart play, and one legislators should get behind.

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