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Kids Over Tax Breaks

Imagine a whole new economic development paradigm


  • Caleb Walsh illustration

The Spokane City Council is debating whether Greater Spokane Inc. and its functions should be split in two: One half forming an organization to act as a chamber of commerce for existing businesses and the other to attract new businesses.


In part, this is due to them being tired of giving more than $100,000 a year to an organization that often lobbies against their proposals. The current structure also creates a conflict, as businesses currently within the city look to block newcomers that might compete with them — occasionally leading to GSI actually lobbying against new economic growth.

I suppose a split would be fine, but as long as Spokane is reconsidering its approach to economic development, why not aim for real reform? It's time for a paradigm shift in how we look at economic development in this nation.

Today, the dominant approach to economic development is figuring out how to directly help businesses. We offer to cut taxes, waive fees, build business incubators, provide grants and advertise our business climate. Too often this leads to a race to the bottom, as cities and states compete to see who can give the most away to businesses in wooing them to set up shop within their borders.

Besides leaving everyone with less tax income to provide community services, this approach also doesn't actually create any wealth; it just shuffles companies around the country.

My proposed alternative: Let's stop all of it. Let's shut down the government-funded economic development offices and departments of commerce. No more government subsidies and corporate giveaways. Let's stop worrying about how to create a great place for businesses and start figuring out how to create a great place for people.

Because here's the truth: While there are some businesses that are shopping around for the best deal and moving to wherever they find it, most businesses tend to stay where they were founded.

So the key to creating economic growth is figuring out how to attract entrepreneurs to your city. But here's the secret: Entrepreneurs are really just people like you and me. What attracts them is what makes anyone want to live anywhere.

What this means is the way to attract economic growth isn't through fancy marketing or incentives, but actually creating a better community. Particularly, economic development would be better focused on children and their educations.

This is an idea so radical that I am actually stealing it from the outgoing director of the Idaho Department of Commerce, Jeff Sayer, who recently told a committee of Idaho legislators that businesses didn't need more tax breaks, they needed a stronger education system creating the talent to fuel the economy. (Admittedly, Sayer didn't advocate for shutting his whole department down, so maybe my ideas are still a little radical.)

So Spokane, what do you say? How about pioneering a new paradigm and focusing all your attention on building a place you can be proud of, a city you love. One that is filled with excitement and joy, whatever that means to you.

Build and maintain great parks, good schools and solid infrastructure. Particularly, make it a great place for your kids to grow up, the kind of place they want to stay or come back to, to raise kids of their own.

Some of those kids will become entrepreneurs — some probably already are. Invest in them and enable them to build your next generation of businesses. After all, who else are you creating this economic development for anyway? ♦

John T. Reuter, a former Sandpoint City Councilman, studied at the College of Idaho and currently resides in Seattle. He has been active in protecting the environment, expanding LGBT rights and Idaho's Republican Party politics.