What Can Washington Cities Do to Support Local Businesses?

Beyond tax breaks: Understanding the economic-development toolbox available to communities

When communities talk about attracting, retaining and growing local businesses, the conversation often starts with a familiar question:

What incentives does the government offer businesses?

It’s a reasonable question—but it may be too narrow.

Economic development is about much more than handing out grants or offering tax breaks. Across Washington, communities are using a variety of tools to strengthen commercial districts, help small businesses invest, improve access to capital, support workforce development and attract new economic activity.

The bigger question may be:

What can a community do to create an environment where local businesses have a better chance to succeed?

That is a conversation worth having in every city.

Washington already has an economic-development toolbox

Washington does not have one universal program that simply provides money to every business.

But the state does have a substantial collection of economic-development tools.

The Washington State Department of Revenue identifies more than 50 business tax incentive programs, including exemptions, credits, deductions, reduced B&O tax rates and tax deferrals. Eligibility varies significantly by industry and activity. (Washington Department of Revenue)

The Washington State Department of Commerce also operates programs and partnerships focused on areas such as small-business growth, access to capital, workforce development, international trade, clean-energy investment and economic development. (Washington State Department of Commerce)

The important distinction is that these programs generally have specific eligibility requirements and public objectives.

They aren’t simply unrestricted checks to businesses.

And that distinction matters at the local level, too.

Look at what other Washington communities are doing

One of the best ways to understand what’s possible is to look at what communities are already trying.

Seattle: Several tools, several objectives

Seattle provides perhaps the most visible example of a city using multiple strategies to support its business community.

The city’s Office of Economic Development maintains a portfolio of grants and financing programs designed for different business needs.

In 2026, Seattle’s Tenant Improvement Program offered qualifying small businesses awards of up to $15,000 for exterior signage or $50,000 for commercial equipment. The program targeted independently owned businesses operating within Seattle and included requirements related to business size, revenue, longevity and community benefit. (Seattle.gov)

The program ultimately awarded nearly $1.3 million to 43 businesses in 2026. (Bottom Line)

Seattle’s Small Business Capital Access Program takes a different approach. Instead of simply providing a traditional grant, the city works with community lenders to reduce the cost of borrowing. Eligible businesses can receive a principal paydown of up to $30,000 or 20% of the loan principal, whichever is less. (Seattle.gov)

And the city’s Back to Business program addresses another challenge facing commercial districts: property damage and security.

The program includes a Storefront Repair Fund that reimburses eligible businesses for certain property-damage repairs, with reimbursements of up to $5,000 per incident, as well as a Storefront Security Fund providing up to $10,000 per business for qualifying security improvements. (Seattle.gov)

Seattle is also investing in neighborhood business districts, recognizing that a healthy commercial district isn’t created by helping individual businesses alone. Public investment can support neighborhood organizations and business districts working on public safety, appearance, events and other community-led improvements. (Seattle.gov)

The lesson isn’t that every city should become Seattle. It’s that there isn’t just one way to support a local business community.

Smaller communities have tools, too

Economic development isn’t exclusively a big-city conversation.

The Port of Seattle’s Economic Development City Partnership Program provides an especially interesting example for communities throughout King County.

For the 2025–26 program cycle, eligible King County cities with populations below 200,000 can receive between $10,000 and $60,000, based on population, with a required city match. The program has awarded $5.7 million since its creation in 2016, generating more than $9.5 million in economic-development investment when city matching contributions are included. (Port of Seattle)

And the program isn’t simply theoretical.

Communities have used these resources for very different purposes. According to the Port of Seattle, examples have included a food-truck program in Des Moines, pop-up markets in SeaTac, a hotel attraction plan in Burien, a technology hub plan in Federal Way and ecotourism work in Normandy Park. (Port of Seattle)

That’s an important point:

Economic development doesn’t always mean a business grant.

It can mean creating an opportunity for businesses to succeed.

Bremerton offers another model

Bremerton demonstrates how federal resources can become part of a community’s economic-development strategy.

The city’s Community Development Block Grant program can support a range of community-development activities, including certain economic-development and microenterprise activities.

Federal CDBG rules establish specific eligibility requirements and public-benefit objectives. Bremerton notes that private for-profit organizations may participate in certain capital, economic-development and microenterprise activities when those activities meet the applicable requirements. (Bremerton WA)

Again, the takeaway isn’t that every community should duplicate Bremerton’s program.

It’s that cities can sometimes leverage state and federal resources rather than relying entirely on their own general funds.

What about the legal limits?

This is where the conversation needs some nuance.

A city cannot simply decide to give taxpayer money to a business because elected officials like the business or believe the owner deserves assistance.

Washington’s Constitution contains restrictions on municipalities giving money, property or credit to private individuals or corporations. Article VIII, Section 7 is an important part of that framework. (Washington State Legislature)

At the same time, Washington law provides specific authorities and pathways for cities to participate in economic-development programs, including programs involving federal funds. (Law Files)

That means the conversation shouldn’t be:

“Can the city give businesses money?”

The better question is:

“What economic-development tools are legally available to this community, and how can they be structured around a legitimate public purpose, measurable outcomes and appropriate accountability?”

That distinction is critical.

A well-designed program might, depending on the city’s authority and funding source, focus on objectives such as job creation, neighborhood revitalization, business retention, commercial-corridor improvements, access to capital, workforce development or redevelopment of underutilized property.

The specifics require careful legal, financial and policy review.

But the existence of legal constraints does not mean the economic-development toolbox is empty.

What could this look like in your city?

Every community has different needs.

One city might need to fill vacant storefronts.

Another might need to help established businesses remain in a commercial district.

Another might need better pedestrian connections, parking, signage, public safety or streetscape improvements.

Another might have entrepreneurs who need access to financing rather than grants.

And another might benefit most from workforce development or a stronger connection between local businesses and regional economic-development organizations.

That means communities should start by identifying the problem—not by choosing the incentive.

Consider a few possibilities:

Could a storefront-improvement program strengthen a commercial corridor?

Could a small matching-grant program help entrepreneurs make investments that improve a business district?

Could a revolving loan or financing partnership help businesses expand without requiring the city to provide unrestricted grants?

Could a city partner with its port, county, state, chamber, business association or economic-development organization to leverage outside funding?

Could public investment in streets, sidewalks, lighting, parking, events or public safety make an existing business district more attractive?

Could workforce-development partnerships help local employers find and train the people they need?

Those are economic-development questions.

And they don’t all require the same answer.

Don’t reinvent the wheel

Perhaps one of the biggest opportunities for Washington communities is simply to learn from one another.

Seattle has experimented with direct small-business grants, financing assistance and neighborhood investment.

The Port of Seattle has developed a regional matching-grant model.

Bremerton demonstrates how federal community-development resources can be incorporated into local economic opportunity.

Washington Commerce provides statewide programs, expertise and connections.

Other communities are developing their own approaches based on local circumstances.

The question for a city doesn’t have to be:

“What should we invent?”

It can be:

“Who is already doing something that works—and could we adapt the idea to our community?”

A conversation worth having

Supporting local businesses doesn’t necessarily mean picking winners and losers.

It can mean creating conditions in which more businesses have an opportunity to survive, invest, hire, expand and contribute to the community.

It can mean improving the environment around a business rather than simply subsidizing the business itself.

It can mean leveraging $1 of local investment to attract additional state, federal, regional or private dollars.

And it can mean establishing clear eligibility requirements, measurable goals and accountability so residents can see what their investment accomplished.

For cities across Washington, that may be the more productive conversation.

Not:

“Should we give businesses money?”

But:

“What can our community do to encourage investment, strengthen our commercial districts and help local businesses succeed—and what tools are available to us?”

There is no one-size-fits-all answer.

But there is a toolbox.

The opportunity is to open it, understand what’s inside and decide what fits.

Editor’s note: Economic-development programs, funding levels and eligibility requirements change frequently. Cities should consult their municipal attorney, finance staff and the applicable funding agency before establishing or promoting any business-assistance program.