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In tense 2-1 vote, Port of Longview approves $38.1M budget, 10% tax drop
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In tense 2-1 vote, Port of Longview approves $38.1M budget, 10% tax drop

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Port of Longview

The Port of Longview in November 2020.

Despite a heated push from one port commissioner and several local residents to drastically cut the Port of Longview’s property tax, commissioners in a 2-1 vote Thursday approved a $38.1 million budget with a 10% tax decrease for 2021.

Before casting the lone dissenting vote, Commissioner Jeff Wilson criticized his colleagues for ignoring requests from several residents who spoke at a formal public hearing about the budget last week. All seven of the people who spoke asked commissioners to drop the tax by 50% or more.

“It was quite clear, 100% clear that not one constituent spoke in favor of what was in our proposed budget at that time,” said Wilson, who also is a state senator-elect for the 19th District.

Commissioners Doug Averett and Allan Erickson said they supported the tax because it will help the port grow and eventually add jobs and increase economic benefit for the community. And at least five residents on Thursday spoke in support of the lesser tax reduction before the budget was officially adopted.

“I did hear what the people had to say at the hearing, very loud and clear. But I also heard from other constituents who didn’t want to be on the hearing, and every one of them said they were in favor of the 10% reduction,” Averett said. “It far outweighed the seven people that decided to be at the hearing, so I believe more than not are OK with the 10% reduction.”

The 2021 budget projects that the port will earn $38.1 million in operating revenue and spend $33.8 million. That’s about $2 million more in revenue and $1 million more in expenses than in 2020.

In 2021, the port will collect a total of $2.07 million with the property tax, according to the budget approved Thursday. That sets the collection rate at just about 19 cents per $1,000 of assessed property value, or about $57 annually on a $300,000 home.

For comparison, the port raised about $2.1 million with it’s tax this year. The owner of a $300,000 paid $63 annually, or about $6 more, under the 2020 rate.

Spending is up next year due to an upcoming master plan update, centennial celebration and facility assessment for Berth 5, among other increased expenses.

The port expects to bank about $3.1 million in profits after non-operating expenses are considered, or about $200,000 more than was budgeted this year.

The 2021 budget also includes $14.5 million of capital projects, including the North Rail Connection project to add and adjust rail line coming into the port and the property acquisition for the Industrial Rail Corridor Expansion project.

The port tax raises money for the port to pay off debt or supplement capital projects like the rail improvements. It also can affect the port’s ability to borrow money in the form of bonds, because bonding organizations consider taxing authority when deciding interest rates and how much to lend.

Port staff and commissioners have said that the $76 million Industrial Rail Corridor expansion will not be finished as quickly without help from the tax.

The tax is levied on all properties within the Port of Longview district, which covers nearly every city in Cowlitz County except for Kalama and Woodland, who have their own ports.

Wilson has pushed his colleagues to drop the tax by 50% or more during the last two budget cycles. He’s been outvoted both years.

However, this year Wilson’s proposal for a deeper cut garnered ample support during a public hearing on the budget. Commissioners voted to move the hearing to 6 p.m. to make it easier for community members to attend.

Wilson contends that the port is in a strong enough financial position to roll back its tax and still complete its capital projects. The port is on track to exceed its planned 2020 profits by “millions of dollars,” Wilson said, referencing a third-quarter financial report delivered after the budget vote Thursday.

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That report showed that the port made $3.9 million in profit in the first nine months of the year. That’s 134% of the $2.9 million that was budgeted.

“And that doesn’t include any of the wind blades we’ve handled in the fourth quarter, or grains and soys EGT is pumping out to the Chinese,” Wilson told TDN after the meeting. “We are going to be filthy rich in the fourth quarter, and yet we played the blues.”

Wilson also noted that the port does not currently own part of the property where it plans to lay new tracks as part of the rail line expansion. And there are no new customers or partners signed on to help with the project, so there’s no clear estimation how many new jobs or how much more revenue the rail expansion would generate.

“What we have here is roughly an $80 million rail expansion project that every commissioner has agreed to. All three of us agree that rail growth and expansion is critical. The difference here is that I believe this project can in fact be spread out. There is no urgency,” Wilson said. “We have no paying customer. We have no partnerships. … Currently when the Port of Longview gets as busy as it can get, we will operate at 60% or 70% rail capacity. That’s not 90% or 100%. That’s no emergency.”

Commission President Erickson said that even when profits come in higher than expected, it’s “prudent” right now to keep a port tax to help save up money for future capital projects. According to the port’s five-year capital improvement plan, the cost of projects slated for the next half decade will total $98 million. The bulk of that is the Industrial Rail Corridor project.

“I want to continue to expand and grow this port so that we can be here for the long-term, and we can continue to support our labor at the port and the community at large, so we can bring in those additional customers, so we can continue to expand and grow the local economy,” Erickson said.

Ahead of the vote, a handful of residents spoke in support of the budget with the 10% tax drop, and two of the port’s business partners noted that the capital projects are important for future growth.

George Sanders, the general manager of Longview Switching Company, told commissioners that he is “hopeful the commissioners will have an aggressive timeline on the development of the Industrial Rail Corridor Expansion, because honestly it means future growth for the port and the community.”

Longview resident Teresa Purcell said she wants the port to have a “vision for the future” and invest in projects to stay competitive, whether or not it has a “bird in the hand” in the form of a new tenant.

The tax plays a role in keeping the port competitive and attractive to new customers, she said.

“If you look at other ports around the state, they are actually investing in their futures, and we are not doing that,” she said.

Kelso resident Joe Abrams said he’s followed the port since the 1970s. He suspects that a number of the people who commented during the official budget hearing spoke out simply because they are opposed to taxes of any kind.

“The port has grown over the last 40 years. I’ve seen it happen with the help of taxes,” Abrams said. “The good commission and staff always look to the future and the good times ahead.”

Two other port district residents emailed in comments supporting the 10% drop, and another urged commissioners “not to be pennywise and pound foolish.”

Longview resident Bill Josh, who was the only commenter that had also spoke at the public hearing, said people wanted commissioners to stick to their campaign promises to lower taxes and eventually eliminate taxes.

“What I just heard is that you plan to bank the taxes you are taking from constituents for future projects or future land purchases” instead of minimizing taxes like they promised, Josh said.

Wilson expressed some frustration that his colleagues considered viewpoints from constituents who spoke with them directly or chose to comment after the formal public hearing.

“I’m not going to sit here today and say, ‘I heard from some person in the grocery line that says they think the taxes are fine.’ … Then maybe we should have extended the hearing period,” Wilson said.

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