Good investment

Welcome to Spokane, the community empowerment zone capital of Washington state.

Although Washington’s constitution is notoriously conservative about economic stimulus, the Legislature in 2000 declared its concern about areas where the people were in need, the economy was stagnant and the infrastructure was breaking down.

By authorizing community empowerment zones, lawmakers established a means of encouraging reinvestment in struggling areas and creating jobs for people who needed them. They anticipated that the greatest application would be in rural areas, but 34 of the 69 CEZ projects now on the books in Washington are in Spokane County. Those projects have been credited with generating $82 million of capital investment and with creating more than 1,100 jobs – more than half of them for people who live in the zone’s depressed neighborhoods.

A map of the zone, which consists of low-income census tracts, visually dramatizes how acute Spokane’s need is. It covers downtown plus a band stretching east and west, plus parts of the lower South Hill, plus nearly all of northeast Spokane, plus the West Central area.

Local champions of economic rejuvenation have done a lot with this device, but there’s more to do.

So, as the Legislature settles in for a two-month session in Olympia, the aggressive voices that have made Spokane the state’s leading user of community empowerment zones are urging lawmakers to broaden the strategy and make it feasible for even more situations.

It’s a reasonable request. If creating employment and stimulating investment in depressed areas is a good thing, why not maximize it?

At present, a qualified business – meaning one in manufacturing, software development or research and development – can avoid sales taxes on $750,000 of new construction or expansion for each new job created. If a business’s employment increases by at least 15 percent, it can take a credit against the business and occupation tax for each new hire, with the credit increasing if the worker is paid above the area’s mean salary.

Advocates of relaxed requirements would like to do away with the 15 percent threshold and they’d like to broaden eligibility to include more categories of value-added businesses.

In 2000 the Legislature tried to capitalize on the advantages of getting government and the private sector to tackle economic revitalization as a teamwork endeavor, and Spokane’s experience suggests it’s been effective. Helping low-income people get a foothold in the workplace not only makes economic contributors of many who might otherwise be drawing on society’s tax-funded social services, it also lessens the likelihood that those without resources might turn to desperate measures such as crime.

It’s hard to find a downside.