First, the good news.

According to State Sen. Rosemary McAuliffe, D-Bothell, local economic development is alive and well as witnessed by Bothell’s recent progress on the long-planned Crossroads project.

Ultimately resulting in a realignment of the city’s two state routes, the first step is tearing down the vacated businesses along State Route 522. That demolition is now under way. McAuliffe also talked about various state projects that have created or will create construction and related jobs, work such as the rebuilding of the SR 520 bridge.

McAuliffe made her comments during a panel discussion on the links between local economic development and education issues. The event was sponsored by the Greater Bothell Chamber of Commerce.

“It’s all about connections, it’s all about partnerships,” said panel member William Christopher, president of Cascadia Community College.

Christopher praised the various entities that make up the Bothell community — from local business to schools to City Hall — for what he described as a spirit of cooperation. Christopher said no institution, including Cascadia, can accomplish all it might want to without such cooperation.

Sitting to Christopher’s right in front of the chamber audience, Northshore School District Superintendent Larry Francois agreed there is a lot of back and forth between the area’s public-school system and Bothell’s two locations for higher education, namely Cascadia and the University of Washington, Bothell. He added that college and career readiness is central to the district’s mission and will remain so.

Joining the others on the panel, UW-Bothell Chancellor Kenyon Chan said several times that the “Bothell” portion in the name of the school is important, saying the campus wants to continue to focus on supplying a major university education in a smaller setting with small class sizes.

But Chan also said the branch campus contributes about $61 million to the local economy in salaries alone. He estimated the school dumps roughly $1.6 million into Bothell’s tax base through the purchasing power of the school, its employees and students.

“If you walk around town, you really don’t feel it,” Chan said, noting many school activities logically take place on the campus. But he insisted the economic impact is there and will continue to grow. Chan added UW-Bothell’s leaders have planned academic programs that feed into local business sectors such as bio-medical and computer or video technologies.

As hinted at earlier, the news was not all good and the bad news all related to the economy and decreased funding from Olympia. All three education leaders said they are especially worried about their next two-year budgets due in 2012.

Chan said UW-Bothell has balanced its books and not cut teachers or programs only by doing something he doesn’t enjoy doing: raising tuition. UW-Bothell increased its prices by 14 percent this year and will do so again next year. Chan also quickly argued that while tuition has risen significantly, the UW system remains a bargain compared to state universities elsewhere in the country.

Like Chan, Christopher said Cascadia was able to avoid losing staff. But many members of that staff were asked to take on additional duties.

For his part, Francois said two-thirds of Northshore’s budget comes from the state. As has been well publicized, the district made $10 million in budget adjustments over two years. Francois added the school system is 40 teachers “thinner” this year, though he said those staff reductions arrived via natural attrition rather than layoffs.

The evening before the luncheon, the Northshore Board of Directors approved putting a supplemental levy on the ballot before voters in August.

For her part, McAuliffe said the state’s overall education budget increased slightly, though that was due to an increase in students. She threw in a plug for a roughly $500 million state bond issue that will be on the ballot for voter approval in November.

According to McAuliffe, the bond sale would create 38,000 jobs while providing school districts around the state with capital improvement dollars to complete energy efficiency measures and green building projects.