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Thu., Nov. 17, 2011

Editorial: Mayor-elect, team must get economy on track

With the Spokane economy fighting for traction, a Providence Health Care buyout offer to its 8,500 employees only makes the going more slippery.

Officials say they have no specific number of separations in mind. Some hiring will continue. But because health care represents around 20 percent of the Spokane economy, any reduction among the ranks of some of Spokane’s best-paid workers signals more stress ahead, financial and otherwise.

The money lost caring for the poor contributed to the Providence decision, and probable cuts in state and federal support for health care will make the situation more critical. Gov. Chris Gregoire, looking for $2 billion in savings, will release a revised budget Monday. The preliminary version amputated several health programs.

Unfortunately, the Providence announcement fits all too well into two projections for the Spokane economy in which the status quo might represent the best case.

Longtime regional analysts John Mitchell and Grant Forsyth have kept their optimism in check the past few years, and wisely so. The factors restraining growth in the Inland Northwest differ very little from those afflicting the nation as a whole; high unemployment, stagnant construction, submerged homeowners and cautious consumers.

A promising spring rebound in employment fizzled out over the summer. For every piece of good news – construction of a Caterpillar distribution center, there seems to be an offsetting piece of bad – the Providence buyouts. State and local governments continue to cut what was once a stable workforce.

How much difference they might make in the short run is speculative, but the transition team put together by Mayor-elect David Condon includes people who can put economic development back on the city’s front burner, and turn up the flame. Theresa Sanders, the city’s former economic development director, had an earlier stint at the Spokane Area Economic Development Council. Katy Bruya of Washington Trust, and Ezra Eckhardt, of Sterling Financial, help lead the Inland Northwest’s two largest financial institutions.

They will have one big asset to start with for which the administration of Mayor Mary Verner should get credit: the annexation of 10 square miles of the West Plains. Spokane International Airport and other nearby transportation assets will be a significant, if not the primary, driver of economic growth in the now-expanded city.

The Providence buyouts notwithstanding, health care will be another. Fulfillment of all the grand visions for the Riverpoint branch campus for the University of Washington School of Medicine will take decades, but the regional population’s physical and financial well-being will eventually gain from the teaching and research assets that will someday coalesce there.

Near-term, the new administration would do well to underpromise and overdeliver. Traction is going to come very slowly.

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