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Editorial: County, city would win by splitting revenues

Sun., July 28, 2013

Spokane County, bleeding revenues as a result of land annexations by the cities of Spokane and Airway Heights, has proposed a truce that would minimize future erosions of its tax base and potentially induce more companies to relocate or expand on the West Plains.

This is a white flag worthy of a salute.

Although many details must be sorted out, the outline is fairly simple: Instead of annexation, the cities and county would accept a split of revenues likely to increase as business development expands the tax base. They avoid the often contentious annexation process and the expensive overlap of services, notably fire.

The Sheriff’s Office would continue to provide law enforcement services.

The county, which may have invested millions in infrastructure subsequently lost in an annexation, gets the certainty the tax base needed to retire bonds will no longer erode. When either the cities or county make future investments, those will be paid off before the revenue split kicks in.

Because the county does not need voter approval to issue bonds, as cities do, infrastructure investments can proceed quickly when companies cannot afford to await an iffy election outcome.

Spokane County Commissioner Al French says the longer the term of a potential agreement the better. Twenty-five years may elapse from proposal to debt retirement and a full revenue split kicks in. A draft suggests 99 years, but 50 years may work.

The details would be worked out in area-specific deals negotiated under the umbrella of the agreement the city of Spokane and county are negotiating. Airway Heights has agreed to accept the same terms.

With several businesses expected to announce expansions or new projects on the West Plains, French says the city may lose out if officials cannot come to an agreement soon.

The city has responded by organizing a team that meets every Monday, with briefings for Mayor David Condon and City Administrator Theresa Sanders on Fridays.

Gavin Cooley, the city’s chief financial officer, says other measures could be swept into an agreement that would further enhance the economic and governance gains. “Leapfrog” annexation is not sustainable, he adds.

So far, nothing that would be a deal-breaker has turned up.

We hope none does. Annexation has been a destructive beggar-thy-neighbor contest for too long. A deal that would unlock the value, say, of the now county-owned rail spur could pay tremendous dividends to everyone. City-county cooperation secured the Caterpillar plant that is one of the community’s best recent economic development stories.

A proposal from City Council President Ben Stuckart that would concentrate resources on improvements one neighborhood at a time is another example of innovative thinking that could jump-start development.

The city should not rush into a bad deal, but if new business already in the offing focuses official minds, so much the better. The county and the two cities could do a lot more good for each other and the area if they were all working under the same flag.