Kaiser, county settle tax bill

Kaiser Aluminum Corp. has agreed to pay more than $2.4 million in back property taxes to Spokane County, most of which will go to schools and other local government services.

The infusion of cash – including more than $800,000 to the East Valley School District – will occur when the company emerges from bankruptcy protection next week, according to a settlement approved by county commissioners on Thursday afternoon.

It’s a welcome piece of news that has been waited upon for more than three years, said Spokane County Treasurer Linda Wolverton.

Kaiser filed for Chapter 11 bankruptcy protection in February 2002. The federal court action, handled in Delaware, suspended Kaiser’s tax obligations for 2002 and 2003. Kaiser’s future was in serious doubt during those years.

The bankruptcy trimmed what the county originally hoped to collect from Kaiser.

Taxes owed, including significant interest and late-payment penalties, stood at $3.5 million. As part of the settlement – which was in part mandated by the federal bankruptcy judge overseeing the case – the final amount to be paid by Kaiser is $1.1 million less.

According to the numbers provided by Wolverton’s office, many government services will receive money, ranging from libraries to road crews.

The company has been current on its taxes in subsequent years.

Though the taxes owed created a financial strain on some agencies, especially schools and fire departments, Kaiser’s emergence from bankruptcy means future tax payments will be forthcoming.

Kaiser intends to emerge from bankruptcy Thursday with a clean balance sheet and fresh start.

Company CEO Jack Hockema is optimistic about the firm’s financial future, based in part on the strong market for aluminum sheet and plate manufactured at the company’s Trentwood rolling mill.

Before the bankruptcy, Kaiser was the county’s largest taxpayer because of its large land holdings and two huge factories – Trentwood and the now-defunct smelter at Mead. The company’s tax payments were divided among 21 funds and taxing districts.

Little of the tax collection flows into the county’s general fund.