How to help cities help themselves in terms of economic development.

Lessons from AWC’s 2020 State of the Cities.

AWC recently released the 2020 State of the Cities report, a comprehensive analysis of the conditions that impact Washington cities today. The report included input from 142 of Washington’s 281 cities and towns, supplemented by survey data from various state agencies. On the topic of economic development, the report focused on four conclusions.

1. Washington cities need financing options to boost economic growth and opportunity for residents.

>> 94% of cities report that creating new and enhanced state programs to help spur economic development would have a significant positive community impact.

To promote meaningful, sustainable economic development that supports employment opportunities and a healthy and diverse tax base, cities need a diverse economic development tool kit.

2. Broadband infrastructure is critical to spur economic development.

>> 54% of cities report broadband infrastructure as a significant barrier to economic development in their community.

Cities overwhelmingly report the need for state investment in local broadband internet infrastructure projects to help spur local economic development. Access to broadband and advanced telecommunications infrastructure is one of the most pressing needs for cities under 7,500 in population. These communities’ economies rely primarily on retail, tourism, and commuter industries. To support cities and their unique needs, funding for broadband infrastructure is critical.

3. City economic development opportunities are unique and diverse.

City economies are diverse in nature—encompassing industries of agriculture, tourism, aviation, technology, and military (see “Primary Colors,” below). Cities that report tourism and hospitality as their primary industry also have the lowest rates of local employment opportunities. Conversely, cities with technology and telecommunications as the primary industry rarely struggle to provide local employment opportunities.

Cities that report tourism and hospitality as their primary industry also have the lowest rates of local employment opportunities.

These varying trends highlight the diversity in economic needs across cities and show that a single solution cannot adequately meet the needs of all cities.

4. New tools can help support economic development.

Cities report that Tax Increment Financing (TIF) options can dramatically impact the economic health of their communities. TIF is a method of using property tax collections within designated areas to finance public infrastructure improvements.

The state has also utilized “tax increment financing lite” programs such as the Local Revitalization Fund (LRF). Under the LRF program, cities use sales tax credits from the state to fund infrastructure investments that support new commercial development.