There are previous lessons applicable to the austere budget passed by the Spokane City Council.
In January 1982, the Washington Public Power Supply System shut down its Tri-Cities nuclear plants. The city of Kennewick adopted a budget like Spokane’s. A city of 45,000 people had only seven firefighters and five police officers on duty at any time. Two fires could not be fought simultaneously, and response times were delayed.
By 1984, property insurance rates started rising. Crime rates were increasing. Streets and municipal utilities started to show signs of failure. Tourism started to show signs of decreasing. Banks increased interest lending rates to businesses.
In the fall of 1985, the city passed a 1 percent sales tax increase and invested the money in infrastructure. By 1987, the city started to see a rebound in business. A private investor from Canada brought in his hockey team and built a coliseum. Several major retailers – Costco, Walmart, Target – soon built new stores around the coliseum.
Lessons learned are: failing to maintain vital infrastructure services does seriously hurt the local business climate, but higher taxes with intent to target those funds to maintain vital services does help with stimulation of economic growth.
George Thomas Clark