Seven cities and two counties held tickets. Three or four would win between $12.5 million and $25 million each to help build stuff that will attract new business, create jobs and grow their tax collections.

You would expect, then, the announcement of winners Sept. 19 would unleash civic celebrations across the state and a groundswell of support to continue the lottery.

It did, and it didn’t.

A clerical error made when a state worker transferred scores from evaluation sheets to a computer resulted in Vancouver, Yakima, Mount Vernon and Whitman County winning the lottery. Three Pierce County cities – Tacoma, University Place and Puyallup – got shut out. So did Bremerton.

After the error’s discovery a few hours after the lottery announcement, the state’s Community Economic Revitalization Board had to reconvene last week to correct the mistake.

That meant Vancouver didn’t get its $25 million and Whitman County didn’t get its $12.5 million. Instead, based on the revised, accurate scoring, Puyallup won $25 million in the experimental program known as LIFT, or Local Infrastructure Financing Tool.

Puyallup City Manager Gary McLean immediately sent an e-mail to his staff saying, “This is a note to let all of you know that our ‘deflation’ of a few days ago changed to elation today.”

IT’S LIKE FREE MONEY

Vancouver and Whitman County didn’t share Puyallup’s jubilation. At the end of Monday’s CERB meeting, conducted via teleconference, the lottery losers demanded all records associated with the screwed-up scoring and announced they might sue.

Hold the habeus corpus, folks.

LIFT wasn’t supposed to turn out like this. It took decades of lobbying by cities to convince the Legislature to test this form of economic development – even though most every state in the union already uses it with economy-boosting results.

LIFT works like this: A city or a county draws a boundary around an area it wants to focus investment for business growth. The state and the municipality freeze their annual tax collections at the current level. All new tax generated in the area over 25 years from new business pays off investments in utilities, parking, streets and streetscapes that draw in new business and jobs. Other states refer to it by the bureaucratic term: tax increment financing.

I call it free money that costs taxpayers like you and me nothing. Because it’s money the local and state governments would never collect anyway without the upfront investment.

As Sen. Derek Kilmer, D-Gig Harbor, describes it, “I’m someone who’s long felt having a model like nearly every other state in the union has to allow growth to pay for growth without new taxes is a very smart approach.”

LIFT PROGRAM NEEDS A LIFT

But LIFT’s three-year test run expired with last week’s awards. And several insiders doubt the Legislature will extend it for three reasons.

 • The controversy around the scoring mistake by the Department of Community, Trade and Economic Development.

 • The growing projected deficit in the state budget that will pinch all programs.

 • The fact that none of the cities or counties that won LIFT funding over the last three years has started any of their projects. Consequently, proponents of tax increment financing have no results from the LIFT test to hold up as evidence it works.

Eventually they will. But all the projects involve complex redevelopments and funding mixes. Bellingham, for example, which won a LIFT grant in the first year, won’t start its waterfront reclamation of old industrial property until next year.

Federal Way, which won LIFT funds last year, has delayed its downtown makeover a year at the request of its partner, a Canadian development company.

“I don’t think we’ll get (the legislation) renewed,” said Tacoma City Manager Eric Anderson. He hoped to fuel a massive remake of the downtown financial district core – a key element of keeping the Russell Investments headquarters – in part with a $25 million LIFT infusion.

University Place believed it could salvage its grand Town Center plan with LIFT funding.

Bremerton wanted to attract new business to its downtown harborside redevelopment.

Well, guess what? After the state’s review and CERB deliberations, CERB chairman Tom Trulove, an economics professor from Eastern Washington University, proclaimed all nine of the projects in the LIFT lottery would have accomplished the successful business, jobs and tax growth they promised.

“They’re all good projects,” Trulove said.

As evidence of that, you need only look at the tight scoring. The top eight scores ranged between Tacoma’s 63.3 and Yakima’s 75.9.

All the evidence suggests legislators, if they take the smart, insightful approach, should not only extend the tax increment financing, but they also should take the handcuffs off of it.

In the test phase, only one jurisdiction per county could get funding. But just because Puyallup’s application scored highest shouldn’t disqualify University Place and Tacoma.

So remove the restriction.

Any local project, if it meets the prescribed rules of creating jobs, attracting business and more tax growth than the initial investment, should get the go-ahead.

Vancouver and Whitman County should stop the legal saber rattling, get over their losses and get behind a push to expand tax increment financing. Continued attacks undermine the unity necessary to get the legislation passed.

We all should realize, too, there’s no better time than now – with our country’s economy ailing – to give communities the tools they need to jump-start themselves. It costs the state nothing. It costs you and me nothing. But it can mean everything to our state’s competitiveness and the vibrancy and economic survival of our communities.

Dan Voelpel: 253-597-8785

dan.voelpel@thenewstribune.com