The Spokane Area Economic Development Council and the Spokane Regional Chamber of Commerce will ask the state Legislature this coming session to give counties the authority to levy a voter-approved sales tax to support economic development. The effort comes after a year in which both organizations had to retrench due to funding cuts.


The EDC earlier this year slashed its budget by 30 percent and cut three positions from its 11-person staff because of a reduction in the money it received from Focus 21, a private economic-development effort here that ended its five-year run in June.


Organizers of Focus 21, which followed two similar five-year programs, called Momentum, decided against launching another campaign because the focus is on finding sustainable sources of funding rather than having to do a capital campaign every couple of years, says JoAnn Ficca, Focus 21s last president.


Thats why the EDC and the chamber plan to approach the Legislature next year with a plan that would allow counties throughout the state to levy a 0.1 percent sales tax, subject to voter approval in each county, says Mark Turner, CEO of the EDC. The money raised with the taxwhich in Spokane would amount to about $6 million a yearwould be distributed by the county commissioners for economic-development activities, says Rich Hadley, president and CEO of the chamber.


Although Turner believes theres a good chance the measure will be adopted by the Legislature, he says such a tax could have a real challenge garnering approval from Spokane County voters.


Nevertheless, having a dedicated economic-development tax would hopefully bring some sort of long-term solution to the funding challenge facing organizations that traditionally have relied on private funds for a good part of their support, he says.


The EDC, for example, derives about 60 percent of its budget from private sources, such as membership dues, fund-raising events, and Focus 21, Turner says. It gets the rest of its money from Spokane County, the city of Spokane, and the state. The chambers budget is 100 percent privately funded, Hadley says.


Events beyond the organizations control, such as a weak economy or the demise of a large company, have brought a peaks-and-valleys approach to economic-development funding here, Turner says.


Even if the new tax is approved by both the Legislature and voters here, it likely would come too late to be much help next year, he adds.


Were going to continue to operate at reduced levels simply because weve not replaced this Focus 21 support, he says.


In 2001, Focus 21 gave $380,000 to the EDC, Turner says. This year, that funding fell to $135,000, and there wont be any money coming from the organization next year, he says.


Were at the end of our funding support from Focus 21, Turner says.


In response, the EDC eliminated three positionsa case manager who worked on recruitment, retention, and expansion of businesses; a marketing specialist; and a researcher, he says. One of those positions was eliminated in June, and the other two employees left after that for jobs outside the organization and were not replaced, he says.


Much of the reduction in the EDCs operating budgetwhich is $1.1 million this year, down from $1.4 million a year ago, and is slated to be about $1 million next yearcame from cutting those positions, but the organization also has trimmed or eliminated some of its activities, Turner says. For example, it has reduced its expenditures on lead-generation services, advertising, and public relations, and now combines efforts with other organizations when taking part in trade shows, he says.


The chamber this year is receiving $165,000 from Focus 21 for its public-affairs and lobbying activities, down about $100,000 from last year, Hadley says. It made up that deficit, in part, by delaying in filling a position on its public-affairs staff, he says.


We have fewer people, and were very busy, he says, adding that he expects to fill that position next year using other chamber monies.


Earlier this year, the organization moved its offices to the ground floor of its Spokane Regional Business Center building so that it could offer its former space on the fourth floor to a paying tenant.