Chelan County, taxing districts join forces to push back on new Port tax district proposal

Chelan County Commissioners have tripled down on their request of the Chelan-Douglas Port Authority to pause their plan to create a new tax district in Malaga to fuel economic development.

State law permits the port to outline a new tax district to create funds for infrastructure to ready land for new industry.

The concern raised several times over the past few weeks by the county commissioners and representatives of local fire, library and other juniot taxing districts is that the Port's idea would be a re-distribution of available property tax revenues, which the county says will hurt their ability to pay for public services and maintain roads.

"Over the course of 25 years, it's about a $103 million or more hit, not only to the county's general operational fund, but also the county road fund." said Chelan County Commissioner Kevin Overbay on KOZI. "It's about $48 million to the county's operational budget, the general fund, and about $53 million to the county road fund as well as another $2.5 million to the flood control zone district. That's just for the county. That doesn't include Wenatchee Valley Fire, which would have a $67 million hit over 25 years, or the regional libraries which would take a $16 million hit."

Overbay says the county wants to partner with the Port on determining who tax revenues from the proposed district would be shared.

"What are a couple of projects, or a handful of projects that we know over the next 25 years we will need to do to enhance this area," Overbay asked. "To jointly plan, to look at the funding elements, to basically say okay, the county is willing to give up this differential in the property tax to ensure that we can do these things."

At a Chelan-Douglas Regional Port Authority economic development forum last week, the regional port disclosed its intent to invest the public’s diverted tax funds into the former aluminum smelter site, still owned by and currently undergoing cleanup by Alcoa.

The county commissioners following a public hearing, where a majority of opinion was against a new taxing district, passed a resolution formally imposing a six month moratorium on a new tax financing district.

Commissioner Shon Smith said Monday that it’s time for the Port to respect the public and to put the community first.

Also at the Port's economic development forum, it was predicted that data centers represent a unique opportunity to leverage outside investment into local strength.

Economist Jerry Johnson shared with local leaders that data centers, such as the one being built by Microsoft at Malaga, represent a “basic export industry” that can deliver high tax revenues with limited strain on services.

Johnson says the region should find ways to turn those investments into broader industrial growth. He said that Washington State is seeing steady population growth with persistent issues with housing costs, workforce supply, and seasonal employment. Agriculture remains a dominant base, alongside government and healthcare, but Johnson cautioned that overreliance on tourism-related sectors can make the economy vulnerable.

The economist’s forecast for the region’s baseline growth rate sits at about 1.8 percent annually.