Port District seeking to lift levy lid again

According to the resolution adopted in July, the Port District is seeking to raise its annual regular property tax levy rate from 17 cents per $1,000 of assessed valuation to $45 cents per $1,000 beginning in 2014 and concluding at the end of 2019. In the second through sixth years of the levy, the rate would be subject to a 3 percent increase, as permitted by statute. After 2019, the Port’s maximum property tax levy “would be determined as if this proposition had not been approved.”

With the loss of its Industrial Development District (IDD) levy of 35.5 cents per $1,000 at the end of 2012, and a further decline in its property tax levy rate (from 24.7 cents in 2000 to 17.1 cents in 2013), the Port is estimating its property tax revenue will decline from $721,000 in 2012 to $237,000 this year. (Second-half property tax payments are due by Oct. 31.)

In a nutshell, the Port requires more revenue to continue the development momentum it established with the siting of the Custom Interface building and the construction of Insitu’s new campus headquarters in the Port’s Bingen Point Business Park. Without preceding Port investments in roads and utilities to serve these lots, there would be no Custom Interface building or new construction taking place on Bingen Point today, Port officials have pointed out in the recent past.

A recital in the July 2 resolution stated the Port’s need in that “the commission has determined that it is essential and necessary for the continued economic development of western Klickitat County that the Port secure additional funds to replace those lost due to the expiration of the IDD levy in order to adequately support its general operations and capital improvement plan.”

An explanatory statement in the resolution noted, “This proposition would offset the tax revenue lost when the Port’s additional Industrial Development District tax expired at the end of 2012 by allowing the Port to raise its regular tax levy rate by 28 cents, to 45 cents per $1,000 of assessed valuation.”

Last fall, the Port District offered its voters the chance to lift the district’s levy lid for six years in exchange for letting the IDD levy expire at the end of 2012. The Port Commission established the IDD levy in 2007 “to help service existing Port debt and fund additional projects desired by the public (including the construction of building for lease to Insitu.)” Part of the commission’s plan suggested merging the IDD levy into the regular property tax levy in order to reserve the IDD for future beneficial use. In the event of the levy lift’s failure, however, the commission indicated it would seek renewal of the IDD levy “and use those funds to complete as many of its strategic capital projects as possible until the funds are exhausted.”

That was the Port’s fallback position in 2012, but it was never a true fallback position because of what Port staff learned after researching the IDD levy: by law, Port Districts are limited to two six-year IDD levies. Port staff found “circumstantial evidence” that the Port Commission in 1959 declared its intent to establish an IDD levy. The IDD levy approved in 2007 hit its six-year term limit at the end of 2012. An extension of the IDD levy beyond 2012 might have been in violation of state law, and the commission opted to avoid the issue, according to Port Executive Director Mark Thornsbury.

In the final issue, Port District voters rejected the levy lid lift request by a 3-to-1 margin (75.8 percent to 24.2 percent of 5,338 ballots cast).