Taxing Above Its Peers

David Camp is a CPA in private practice by trade and a sailor by inclination. He writes a monthly installment of Portknocker Notes for Whatcom Watch.

Portknocker (noun, slang): artisanal miners typically operating without permits.

Portknocker Notes are a collection of port-related thoughts, facts, ideas and random complaints from your faithful port of Bellingham reporter. The opinions in this column do not necessarily reflect those of Whatcom Watch.

I admit to a certain fascination, both personal and professional, with public finances and taxation. This article continues my analysis of the Port of Bellingham’s property tax regime, with comparisons to its peers, the port districts of Washington State.

Port districts were set up by the state Legislature in order to prevent private monopolies and guarantee public access to port facilities. They are public entities, with elected commissioners accountable to the voters of the district. By law, Washington state port authorities may levy a tax of up to $0.45 per thousand of property valuation.1 Tax proceeds may be used only for capital improvements, repayment of bond debt and environmental cleanup.

The millage (short form “mill”) rates assessed vary widely among Washington ports (see sidebar). The 2010 millage rates and total tax revenues of Washington state ports, according to their public 2010 budgets in the sidebar “Washington Ports Millage Rates.”2

A caveat: the ports of Washington, while each governed under the same legislation and with generally the same objectives, differ considerably in their clientele, basis of business, land area and type of facilities. Therefore, the mill rates reflect differing underlying economic imperatives, and therefore comparisons are more indicative than determinative. It should be noted that none of the ports imposes levies at the maximum rate allowable under state law.

Caveat aside, it is curious that the Port of Bellingham levies taxes at the second highest rate in Washington state. Further, the mill rate of $0.28 per thousand is 47.4 percent higher than the average within the state. Combine this with the fact that the Port of Bellingham has been increasing its overall taxes levied at a rate of more than 8 percent per year for the past five years (see “A Taxing Issue, Whatcom Watch, Dec. 2010, page 4) and a reasonable person might conclude that the Port of Bellingham has taken up with gusto the discredited “tax and spend” ideology.

Perhaps the new Port of Bellingham Executive Director Charlie Sheldon will be able to bring some expertise in reducing taxes from his experience with the Port of Seattle, which has a millage rate of $0.22, which is 21.6 percent less than that of his new employer.

It is clear to this accountant that the Port of Bellingham levies taxes at a rate higher than that of all but one of its peers, and the total tax levy has been increasing at a rate higher than inflation for the past five years.3

Are you receiving value from the Port of Bellingham for the money it appropriates from your wallets? Please let me know your thoughts and ideas for future articles. I may be reached at portknocker@whatcomwatch.org.

1 The “millage rate” is the tax amount per thousand dollars of valuation (“mill” is a short form of the Latin for thousand). The maximum millage rate when the state Legislature established port districts was $2 per thousand. It’s not directly comparable to today’s rates (the Legislature has since reduced the maximum millage rate to $0.45 per thousand), since it reflects the much lower property values of the time, combined with the civic pride which motivated the levy.

2 These data are from 2010 budget reports published on the respective port’s websites. This is a not an exhaustive list; the ports of Gray’s Harbor, Longview, and Skamania County do not publish financial reports on their websites.

3 This is apparent to me despite the port’s effort to put a positive spin on the taxes it levies on Whatcom County property owners (see “Port Commission Approves $52.3 Million Budget: Creates New Jobs and Cuts Property Taxes,” press release at www.portofbellingham.com) and other media coverage that presents the information without challenge, (see The Bellingham Herald, “Port of Bellingham commissioners have approved a 2011 budget that contains a small property tax cut,” Nov. 18, 2010).