Washingtonians left a clear message when the votes were counted in the fall election: Cut the budget to deal with projected state revenue shortfalls; we have no appetite for tax increases to save programs.

Following the mid-December release of the governor’s proposed budget for the next two years, the legislature convenes Jan. 11 for what will surely be a grueling process to save more than $5 billion as it creates the next biennial budget.

From my more narrow perch, state and local economic development capacity has been taking its hits and there certainly are more to come. It takes years to build expertise and capability, and just weeks to tear it down. The long-term implications for Washington’s competitiveness — and Kitsap’s — are concerning.

Not widely known is that the Kitsap Economic Development Alliance, like many of our counterparts throughout the state, was founded as a result of state general fund appropriation in the mid-1980s that continues today. The program was Team Washington, launched by Governor Booth Gardner as a strategy to help communities create the capacity to grow our way out of economic recession and begin diversifying local economies. State-level economic development services to companies and communities also were increased.

This time around, the severity of forecasted state revenues is forcing a strategy of cutting our way out of economic distress…if we can. Much of the economic development capacity that has evolved in the years since Team Washington is quickly eroding in the current environment.

The Washington Department of Commerce recently conducted a comparative analysis of economic development funding in other states and found a more stark contrast in investment than most of us in the business had assumed. For all economic development related state appropriations (education & training, local capacity, state services, special programs, etc.) Washington spends about $2.72 per capita. Colorado spends $4.36 per capita; Texas, $6.09; North Carolina, $7.28; Utah, $11.21… you get the picture.

Locally it doesn’t look much better. Of the 34 economic development councils in Washington, KEDA is 16th in total budget. Nine of the 15 counties with higher budgets have smaller populations and economies than Kitsap.

Although most of KEDA’s operating income is from local companies and public entities (we are a private non-profit corporation, not a government agency), about 35 percent of our 2009 budget was derived from a performance-based contract with the state. Our state contract for 2011 is projected at 23 percent of income, although it could fall much further.

The vulnerability that has resulted from the dependence on state assistance requires KEDA to continuously build our private business membership while also ensuring that local public entities continue in collaborative roles. For an economy this size, there are many businesses out there that have a stake in this work and management is needed in the game.

A local public-private partnership is our foundation and it will always be the key to effectiveness — lots of fingerprints. It must be strengthened if Kitsap hopes to separate ourselves from the many communities throughout the state and country who want the same quality jobs and investment we do (including our own companies!). I can tell you first hand, having diverse leaders engaged in local economic development does make a competitive difference. How strong a team will we field in the new economic environment?

Our charge going forward also requires us to develop a more predictable model for investing in local economic development. Poulsbo Mayor Becky Erickson has championed an idea to add a $5 surcharge on business license renewals and dedicate the revenue to the county-designated Associate Development Organization (a state-mandated designation, which is KEDA). Port Orchard Mayor Lary Coppola has also voiced his support for the plan. This approach would both create a dedicated revenue stream for local economic development, and result in a cost savings for local government by removing this expense from their general fund.

Whether the plan will be adopted by these cities and others, I don’t know. But it is the kind of thinking we must encourage if Kitsap economic development is going to achieve a capability better than 16th in a state that ranks low nationally.

If there is opportunity in this funding environment, it is to enhance our competitiveness and service quality at a time when other communities (and states) are unable to do so. We fully intend to emerge better and stronger.