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Vancouver port may forgo 1 percent property tax hike

Move would cost agency $100,000, save average household 76 cents in 2011

By Aaron Corvin, Columbian Port & Economy Reporter
Published: October 29, 2010, 12:00am

The Port of Vancouver’s voter-elected leaders may choose to collect less in property taxes than the law allows.

They face concerned port administrators, who have cautioned that doing so would reduce the port’s ability to borrow money for economic-development projects.

But with a 2011 draft budget that’s about even with the current year’s spending plan, two of the port’s three commissioners — Jerry Oliver and Brian Wolfe — think the port can afford to forgo the 1 percent property tax hike it’s allowed under the law. To do so would cost the port roughly $100,000 and would only save the average household about 76 cents.

During a workshop this week to discuss the port’s 2011 budget, Commission President Oliver asked administrators whether the port could “get along without” taking the available 1 percent increase in its property tax levy next year. The port’s finance director, Maggie Smith, replied that the port could probably do that but it would hamper its capacity to obtain loans for port improvements and to use accumulated levy dollars as collateral for those loans.

Discussion of property taxes occurred as part of the port’s overall work to craft a budget for next year. The draft spending proposal is largely status quo: It apportions $58.4 million, down roughly 1 percent from 2010, to cover everything from rail and marine operations to information technology and environmental cleanup projects.

“We’re running tight now,” said Larry Paulson, the port’s executive director.

Initiative 747, approved by state voters in 2001, imposed a 1 percent cap on increases in state and local property-tax collections. About 16.5 percent of the port’s budget comes from these taxes, with the rest coming from tenant rents, shipping fees and other non-tax revenue sources. The port’s draft spending proposal includes the 1 percent it is allowed, increasing property-tax collections by roughly $100,000 to $9.7 million. That means the owner of a property with an assessed value of $222,785 would pay $89.71 — up 76 cents from last year — for the port’s share of property-tax collections in Clark County.

Port commissioners expect to vote on the final 2011 budget on Nov. 9. Oliver said he will propose not taking the 1 percent property-tax increase.

“It’s not a big impact, but it’s the principle,” Oliver said. “I certainly don’t want to raise taxes in a down economy.”

Wolfe said he and Oliver are “sort of on the same page” in preferring not to “increase citizens’ taxes in this economy.” However, Wolfe said, he’s interested in what it would take to “bank” the 1 percent.

Under state law, taxing districts can carry “banked” levy capacity — going up by more than 1 percent in a single year if they don’t take the allowable increase the previous year. For example, if a taxing district levies $1 million one year and stays at $1 million the next year, then that district could increase its levy to $1,010,000 plus 1 percent in the third year.

Commissioner Nancy Baker said she’s still considering the matter and hasn’t made up her mind.

The port’s slice of overall property-tax collections in Clark County is 3 percent, with other public agencies getting much bigger cuts. Local schools collect 38 percent of all county property taxes, for example, and Vancouver’s city government receives 23 percent. The port’s taxing district is 111 square miles, encompassing 300,000 property owners.

The port does not use its property-tax levy to pay for day-to-day operations. Rather, the port uses its property-tax collections only for environmental projects, such as cleaning up contaminated property, and to service the debt it takes on for capital projects, such as rebuilding docks and expanding its capacity to handle cargo.

Oliver said he would prefer it if the port, a “successful, profit-making entity,” collected no property taxes. However, the port has debt obligations backed by its property tax levy. “That’s a contractual obligation and we have to continue with that,” Oliver said.

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Columbian Port & Economy Reporter