Kaiser Is Overtaxed, Says Judge County Told To Pay $5.14 Million Back

Spokane County taxpayers may have to pay back $5.14 million to Kaiser Aluminum Corp. for “illegally excessive” property taxes collected since 1990, a judge has ruled.

If upheld, the recent ruling by Stevens County Superior Court Judge Larry Kristianson would cost Mead and East Valley school districts $1 million each, Spokane County Treasurer Linda Wolverton said.

“No way - we don’t have that kind of money,” said Chuck Stocker, East Valley superintendent.

Other potential big losers: the state education fund, $1.06 million; the Spokane County road fund, $596,000; Spokane County general fund, $493,200; Spokane County Library District, $175,000; Fire District No. 1, $411,000; and Fire District No. 9, $411,000.

Wolverton said the county could shoulder its share of the tax pay-back, but road work and other services would be sacrificed.

The Spokane County prosecutor’s office, which has yet to notify school districts of the threatened refund to Kaiser, did not return telephone calls this week.

The county is asking Kristianson to reconsider his ruling in favor of a plan to refund Kaiser one-tenth the amount of the preliminary judgment.

Kaiser operates two factories in Spokane County: the Mead primary aluminum smelter and the Trentwood rolling mill in the Valley. The Houston-based company annually pays under protest about $2.1 million in Spokane County property taxes, or 2.25 percent of the county’s tax revenue.

Kaiser’s tax lawsuit, filed against the county in 1993, seeks to roll back the property assessment of the Kaiser factories to the 1986 level.

Ironically, the company complains that a moratorium on property revaluations in 1990-92 resulted in it receiving an excessive tax bill. The moratorium was enacted to give the county time to convert to a computer-assisted mass appraisal system.

On the eve of the moratorium, officials in 1990 reassessed one-fourth of the county, including Kaiser’s property.

Kaiser said that action increased its tax bill at a time when residential property values were soaring and taxpayers would have had to pay greater taxes. The moratorium forced the company to bear an unfair portion of the taxes. Kristianson, considered an expert in property tax law, agreed. In his decision late last month, he ordered Spokane County to roll back Kaiser’s assessment to the 1986 level, the last assessment of Kaiser property prior to the moratorium.

“Spokane County operated under an illegal revaluation moratorium,” Kristianson said.

Kaiser officials declined to comment on the ruling.

Spokane County Deputy Prosecutor Jim Emacio raised concerns in court pleadings that a victory by Kaiser would trigger an avalanche of property tax appeals and undermine the ability of local government to collect for services.

Taxpayers could use the Kaiser case as a precedent to argue that their share of the county tax bill was too high - not because their assessment was inflated, but because others were underassessed by the county and paying too little, Emacio argued.

“Once word got around that any taxpayer could chop 20 percent off the tax bill merely by filing an appeal, the entire tax system would quickly come to gridlock,” he wrote.

“Any significant portion of taxpayers prevailing would result in disruption of income to taxing districts that would be catastrophic.”

, DataTimes