Interestingly Cowlitz County Commissioner Jeff Rasmussen, President of the Board of Commissioners, Republican, and former Longview City Councilman, did not give a comment for the following article by the Snooze that illustrates the incompetence of our local government.
Longview Daily News
Tony Lystra
05/22/2005
Longview officials say Cowlitz County owes the city more than a half million dollars because of an error in a tax formula that went undetected for nearly two decades.The matter appears to have all the makings of a political explosion. County officials are skeptical. One has accused the city's representatives of "bullying." And some Longview officials are clearly squeamish, saying they are reluctant to discuss the issue."I don't want to get involved in this," Longview Mayor Mark McCrady said Thursday. "I don't want to go elected official to elected official. Those contests never work very well."The problem stems from a 2.14 percent "privilege tax" that Cowlitz PUD pays to the state on its gross revenues. After collecting the funds, the state channels roughly 40 percent of the money back to county governments, said Dave Andrew, a PUD spokesman.
The counties, in turn, give the cities within their jurisdictions a portion of the revenues. How much money each city gets is determined by a formula provided by the PUD.But since at least 1980, Cowlitz PUD has been using the wrong formula to calculate how much of the tax proceeds Longview will receive, Andrew and Longview officials said. As a result, they said, the county has been underpaying Longview for decades. "The city didn't get as much revenue as it was entitled to," Andrew said Friday.PUD officials caught their error in 2003, he said, and have since been providing state and county officials with the correct data.Longview City Manager Bob Gregory called the mix-up "an honest mistake.""No one was trying to do anything wrong," he said Friday.Still, Longview officials say the county owes the city $570,000, which would compensate for seven years of being shorted. City officials examined only seven years of records, Gregory said, because those were most easily accessible."We could certainly go back farther than that and come up with some more," he said.On Friday, County Commissioner Kathleen Johnson accused the city of "bullying" and "playing hardball.""I'm kind of disappointed," she said. "This kind of situation feels unfriendly."Johnson argued that the error was not the county government's fault. County officials, she said, only distribute to cities exactly what the state and PUD tell them to pay. "We're just a pass-through mechanism," she said.Now that the PUD's error has been corrected, Johnson said, Longview officials should ensure they collect the correct revenues in the future, not demand payment retroactively."Bullying another government entity probably isn't the best thing," she said.County Commissioner George Raiter noted that 40 percent of the county's residents live in Longview. He argued that, as the county has spent money on programs and services, Longview residents have benefited."Is there any value to ... scraping that money up and transferring it over?" he asked.The money would be a windfall for a city that has been struggling to balance its budget and stave off cuts. Asked if the city's financial woes play into the city's decision to pursue the money, Gregory said, "Certainly it does. ... It's revenue that was not due the county. It was money that the city should have gotten and didn't. We certainly have a need for those revenues."Still, he said, "Even if we weren't in those financial struggles, there is a principle. ... We should at least get that satisfied."Officials first noticed that something was amiss in 2003, Gregory said. After the PUD rectified its error, the city began receiving more of the tax revenues. As they investigated the discrepancy, he said, Longview officials discovered that the city had been underpaid.Gregory said that city officials drafted a letter late last year notifying the county of the problem. Gregory also discussed the issue with county commissioners shortly after he became city manager in April.Longview City Attorney Dave Spencer, meanwhile, said he has commissioned a group of Seattle tax lawyers to research the matter. But Spencer said the issue is "not really something I'm prepared to discuss yet.""I don't want to do something prematurely and inappropriately," he said.Indeed, Gregory said the city hired the attorneys to "make sure that we're on solid legal ground regarding our position.""We will ask for a written opinion, share that with the county and see what happens," he said.At best, county officials appear skeptical."They have never showed any evidence," Johnson said of the Longview officials. "They're reaching pretty good. They're trying."Raiter said that before the county pays the city anything, it wants to verify that the Longview officials' figures are accurate."We're not going to automatically write a check," he said. "But we'll do what's right at the end of the day. We don't know exactly what that is right now."The city's contention comes at a time when, like so many other local governments in Washington, Cowlitz County is struggling financially. County officials cut roughly a dozen jobs late last year as part of an effort to balance the county's $32 million budget.If the county had to hand over the money in one large sum, Raiter said it would be "under a real high risk of running into a cash-flow deficit."The county, he said, collects property tax revenues in April and October. As a result, the county must keep a percentage of its budget in reserve to pay its bills and employees, Raiter said. The money that Longview officials want from the county amounts to nearly a quarter of those reserves, he said.Seeming to address the Longview officials, Johnson said: "If that's the way you want to do business, you would hurt your citizens. They would have to lose services. ... Do you want to hurt your citizens by taking those dollars away from them? We don't have any more money to give them."Gregory said Longview officials, who are enduring similar problems, are sympathetic."We're not asking them to come up with $570,000 right now," Gregory said.Instead, he said, the city would consider accepting the money as a sort of credit for the services it pays the county to provide, such as housing inmates in the county jail and operating the local 911 dispatch center."If they want to pay us $570,000, that would be fine, too," Gregory continued. "But we want to work with them."