Georgia Pacific, Clatsop County settle property tax dispute

Georgia Pacific - Wauna Paper Mill contributes greatly to the Wahkiakum County economy, employing residents to help in the production of pulp and paper products.

But the company expends much more across the river where Wauna pays a total of $3,410,536 a year in property taxes to taxing entities in Clatsop County, making it by far the county’s biggest single taxpayer.

Under the Lower Columbia Maritime Enterprise Zone for construction of its new No. 6 paper-making machine, Georgia-Pacific was granted tax exemptions in 2004. The exemption ensured that property taxes assessed on the new machine would be waived for five years.

However, in 2007 the company was disqualified from the exemption program for failing to maintain a minimum required number of employees at the mill site.

As a result of the disqualification, the company had to repay the exempted taxes, totaling approximately $4.1 million. That money was distributed among the 60 taxing districts. The company, who employs nearly 35,000 people, filed an appeal in Oregon Tax Court challenging not only the exemption penalty but also the assessed valuation of the entire mill for three tax years. The mill’s annual property tax bill is calculated on that assessment which Georgia-Pacific claims is overvalued by approximately $154 million.

In May, Clatsop County and the owner of the Wauna pulp and paper mill reached a settlement over the company’s tax challenge. The county and 60 other taxing districts agreed to pay Georgia-Pacific a total of $2.5 million in property tax refund.

Last Thursday, Clatsop County officials signed on the dotted line for a loan to secure payment in the tax appeal case. The county was able to secure an interest rate on the loan of 2.18 percent. Annual payments on the 10-year loan will total $283,251.30 and will be covered by all taxing districts in the county.

“It’s a good company to work for,” said Ben Bauman, 31, of Georgia-Pacific. “We need those jobs in this area and putting the money back in Wauna’s hands should keep us working. It doesn’t look good for the employees when your company owes millions in a lawsuit so this is a good outcome for us.”