Long-Term Benefits Outweigh Short-Term Sacrifice

By Jennie Dickinson and Kathryn Witherington, Port of Columbia

One of the significant advantages of having new industries invest in a community is the potential of an increased tax base. In Columbia County, we have already seen the effects of this from one important industry – renewable energy. Before the wind industry invested in Columbia County, our tax base was just over $286 million. Ten years later, our tax base has risen to $868 million. This is an increase of 227%. For comparison, Walla Walla County experienced an 86% tax base increase in the same time frame. A larger tax base means more revenue for local governments like cities, counties, library districts, fire districts, ports, and so on. It also means that the tax rate paid by each individual citizen goes down - large industry pays a bigger share of the total taxes collected. The tax base numbers make it clear: when new businesses come to Columbia County, Columbia County benefits.

It is understandable, then, that there was fear and confusion in Columbia County when word first came out that Columbia County commissioners were caught by surprise with tax breaks for Columbia Pulp, the newest industry to locate here. Under the High Unemployment County Sales/Use Tax Deferral Program, Columbia Pulp can receive a tax deferral of around $500,000 for their investment in Columbia County. The program worked exactly as intended, encouraging this new industry to invest in a distressed rural area.

The High Unemployment County Sales/Use Tax Deferral Program is a Washington State tax incentive program that has been in place for decades. In 2014, when Columbia Pulp applied for the tax deferral, Columbia County commissioners and planning officials were made aware of the application. The application was approved, and the long-term benefits are already proving to outweigh the short-term sacrifice.

In 2014, Columbia County was considered a distressed county. We had an unemployment rate that was at least twenty percent above the state average between 2011-2014. We were still recovering from the recession, and very much appreciate the state incentives that help get new industries to invest in Columbia County.

This is one of the many factors that led to Columbia Pulp choosing Columbia County for their plant. It is a short-term break that lets them defer taxes paid on purchases of qualified buildings, machinery, and equipment. Ultimately, if Columbia Pulp remains operational and meets state reporting requirements, the owed taxes may be forgiven.

While Columbia County is in a stronger economic position now than we were in 2014, with a historically low unemployment rate and a higher tax base, it is still important to bring new jobs and new investments to this area. Companies like Columbia Pulp are a huge boon to our community. The value of the jobs that they will create, the investment in the local community, the payroll generated, and the trickle-down effect of their employees spending money locally far exceeds the $500,000 they will save by taking advantage of tax incentive programs.

In just the short time Columbia Pulp has been operational in Columbia County, they have invested millions in our county in the purchase of land, goods, and services. They have purchased a building on our main street, helping to keep our downtown vital. They have already created 25 full-time living-wage jobs, and two support companies have already hired another 18 people. This is before they have even hired the 100 people expected to work at their plant! These employees will live in our communities, shop in our stores, and eat in our restaurants. And, while it should go without saying, we can say with confidence that Columbia Pulp WILL be paying significant property taxes –money that will benefit our local community.

This is why tax incentive programs exist for rural areas: they bring us new industries, new investors, and new opportunities. They make new industries look at an area like Columbia County, recognize the value of locating in communities like ours, and create family wage jobs for our citizens. They ultimately insure that we will have a larger tax base and even more amenities, which will make us appealing to the next big industry that needs a site to locate. That is more than worth $500,000 in sales/use tax revenue.