In a move that observers say would give the region more muscle in attracting business and funding, the federal government appears likely to combine Spokane and Kootenai counties into a combined statistical area in 2013, after the 2010 Census is tallied.

The U.S. Office of Management and Budget (OMB) currently is considering a review committee's recommendation to remove local opinion from the equation when determining if two metropolitan statistical areas should be joined in what OMB calls a combined statistical area. Such a move would recognize strong economic and social ties between the locations. Local opposition ultimately killed a previous effort to combine Spokane and Kootenai counties in this way after the 2000 census. The OMB expects to publish its revised standards by December of this year.

Joining Spokane and Kootenai counties would create a combined statistical area with more than 600,000 residents. That, says Patrick Jones, executive director of the Institute for Public Policy and Economic Analysis at Eastern Washington University, would make the combined size here equivalent to that of the 85th largest metropolitan statistical area in the nation, if no other such combinations occurred.

Currently, the Spokane MSA, which includes all of Spokane County, is the 106th largest metropolitan statistical area, with 463,000 people, and the Coeur d'Alene MSA, which includes Kootenai County, is the 277th largest, with about 137,000 people, based on 2008 population estimates, Jones says.

Being recognized as a combined statistical area of greater than 500,000 people would give the two counties more weight for attracting business, tourism, and advertising dollars, says Rich Hadley, president and CEO of Greater Spokane Incorporated.

The combination would be beneficial because the bigger population base would be attractive to companies looking to locate regional headquarters in bigger marketing areas, and also because "the perception is that most communities and regions that share more have more of the amenities that attract investment," Hadley says.

A representative from the Coeur d'Alene Chamber of Commerce couldn't be reached for comment.

Though the larger population and ranking might put the Spokane-Coeur d'Alene market on more recruiting lists, some say the region already promotes itself that way, even though the two counties' statistics are measured separately.

"We use those demographics a lot anyway," in marketing sites for new stores in Spokane and Kootenai counties to retailers, says developer and real estate executive Dave Black, CEO of Spokane-based NAI Black.

Large national retailers, such as the department-store chain Kohl's Corp., home-improvement chain Lowe's Cos., and sporting goods chain Cabela's Inc., look at geographic "rings" around possible store sites to see what the potential market is for their outlets, Black says.

"We look at a 10- or 20-mile ring," he says, which in the case of a Spokane Valley location would include Kootenai County. An official recognition of a combined statistical area would reinforce what commercial real estate agents already do in marketing the region to such national businesses, Black says.

"In commercial real estate, a person gets clients enough information to make the decision easy," he says.

New rules

Because Spokane and Kootenai counties already have a high level of commuting between them, they would be combined automatically if the new rules being considered now by OMB are adopted. Under the old rules, if the percentage of people who live in one county but work in a bordering one exceeds 15 percent, then the two counties could be combined at the option of the counties involved, but if that percentage exceeds 25 percent, the combination becomes mandatory.

Using 2000 Census figures, the percentages of people living in either Spokane County or Kootenai County and working in the other county produced a "work interchange measure" of 21.6, says Paul Mackun, of the U.S. Census Bureau's population division.

Mackun says that if the proposed rule changes are adopted, any area that has an employment interchange measure of 15 or greater automatically would be designated a combined statistical area by OMB.

The last time the discussion of combining the two statistical areas came up, in the years following the 2000 Census, Idaho's congressional delegation told the federal government that the proposed combination should be denied, based on a lack of support for the idea in Coeur d'Alene.

Alivia Body, regional labor economist for the five northern counties in Idaho, says that even if Spokane and Kootenai counties were combined in the eyes of OMB, they still will be recognized as separate MSAs. The combined statistical area was introduced by OMB in 2000 as a complementary measure to the MSA, to allow it to delineate larger regions that have broader social and economic interactions.

A metropolitan statistical area is defined by OMB as having "at least one urbanized area of 50,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties." A combined statistical area includes two or more metropolitan statistical areas.

Body says keeping its MSA status is important for Kootenai County, because it would be able to maintain its identity, and certain statistical data, such as calculating the unemployment rate, would be unaffected by the combination, she says.

"I think what Kootenai County is worried about is losing its identity," she says, adding that economic development promoters in Kootenai County already work to take advantage of that market's proximity to the Spokane metropolitan area.

For example, Kootenai County can cite Washington state colleges and universities as well as North Idaho College when telling potential employers about nearby institutions of higher learning.

"We work together as a region, anyway," Body says.

"You have a larger skilled labor source by sharing those resources," she says. That can be important, because employers looking to relocate look to see how concentrated an industry is in an area. The bigger the potential labor pool, the better for employers, she says.

Still, Body says being recognized as part of a larger area could make a difference for North Idaho in seeking federal transportation funding. Areas with a population greater than 200,000 are eligible for more federal transportation funding, she says.

Tom Legel, vice president of finance and information for Kootenai Medical Center, says that the combination could give health-care providers in Kootenai County an increase in Medicare reimbursement rates, because the county would be elevated from rural status.

When the combination was being discussed a decade ago, Legel said such a change would have meant about 13 percent more, or $3 million, in additional federal funds for KMC each year. Now, following reimbursement rule changes that have come down since, that gap is much smaller, only about a 1 percent difference, he says.

Though KMC currently gets the reclassified rate, only hospitals can seek that rate. Home health agencies, hospice providers, and surgery centers still are reimbursed at the much lower rural rate and could benefit more from such a change, Legel says.

The combination also would be beneficial in attracting more conventions and meetings, which bring a lot of hotel-motel revenue and tourism to the area, says GSI's Hadley.

"It puts you higher on the (site-selection) list. Organizations that bring more people look at bigger population centers," specifically those with more than 500,000 people, he says.