Settlement To Cut Tax Rate For Some Ponderay Newsprint Pays Its Back Taxes To County

A tax-dispute settlement Thursday between Pend Oreille County and Ponderay Newsprint will pump $4.3 million into government coffers and give some taxpayers a rate cut next year.

Ponderay Newsprint started withholding almost 51 percent of its taxes in 1994 under state law that applies only to taxpayers who represent more than one-fourth of 1 percent of a county’s assessed value.

The company paid its back taxes with interest Thursday when Pend Oreille County Superior Court Judge Larry Kristianson approved the settlement.

The centerpiece of the settlement is that Ponderay Newsprint’s assessed value will drop to $236 million from the $254 million Kristianson established during a non-jury trial in March. In exchange, the paper mill won’t appeal Kristianson’s ruling on a number of complex questions.

The agreement is designed to prevent repetition of the three-year battle that cost thousands of dollars in legal fees and caused severe budget problems for the county and service districts.

Both sides agreed future assessments should be based on state Revenue Department tables. They will go to binding arbitration if a dispute arises.

The framework of the agreement was established two months ago, but company and county officials soon discovered a problem in applying it to taxes in the Cusick School District. They had to figure out what to do with the $42,614 that should have gone to the district.

The school levy rate rose so the district could collect the full amount voters approved. The paper mill paid less overall, and other taxpayers paid more.

Because the district had already received all the money voters authorized, it couldn’t collect the amount Ponderay Newsprint held back. And the district couldn’t simply reduce next year’s levy rate because it hasn’t been able to pass a levy since 1994.

Instead, the money will be used to reduce next year’s overall tax bill for properties - other than Ponderay Newsprint’s - that were subject to the artificially high Cusick school levy rate.

County Prosecutor Tom Metzger said current owners will benefit regardless of who owned the real estate in 1994. He said the reduction is estimated to be 64 cents per $1,000 of assessed value.

, DataTimes