What Cherry Point taxes mean to local schools

originally published March 2017—

A significant portion of income for Whatcom County public school districts comes from:

  1. Maintenance and operations (M&O) levies, which help fund the ongoing costs of running the school, and
  2. Bonds, which typically are used to fund larger school renovations, new construction, and other capital projects.

In the Ferndale School District, for example, which has successfully floated M&O levies since 1977, the M&O levy funds about 25 percent of the total budget, according to information on the district’s website. Among the items funded by the levy: the salaries of one in four teachers, and two in three classified staff, in addition to athletic, music, technology, and safety programs for students.

In 2016, according to the annual tax book published by Whatcom County, the Ferndale School District had in its budget an M&O levy that brought in roughly $14 million and a bond that brought in approximately $3.3 million. The Blaine School District had an M&O levy of roughly $6.6 million and a bond of approximately $3.9 million.

Both bonds and levies are funded by the property taxes paid by property owners in each district. A large portion of the budgets of the Ferndale and Blaine school districts come from BP Cherry Point Refinery, Phillips 66 Ferndale Refinery, and Alcoa Intalco Works.

For the 2016 tax year, here’s the breakdown (source: Whatcom County Assessor’s Office):

Phillips 66: The company’s most valuable parcel of land in the area, the refinery on Unick Road in Ferndale, had a taxable value of $415.8 million. The total assessed value of all properties in Whatcom County owned by Phillips 66 Company was roughly $479.8 million.

On its refinery parcel alone, the company paid roughly $1.5 million toward the Ferndale School District’s M&O levy and $376,509 toward its bond levy. That’s 10.7 percent of the M&O levy and 11.4 percent of the bond levy.

Alcoa: The company’s most valuable parcel of land, its smelter on Mountain View Road in Ferndale, had a taxable value of roughly $58.6 million in 2016. The total assessed value of all properties in Whatcom County owned by Alumet in 2016 was roughly $63.2 million.

On its smelter property the company paid $211,534, or another 1.5 percent of the Ferndale School District’s M&O levy and $53,101, or another 1.6 percent of its bond levy. A small number of properties throughout the county are listed as being owned by Intalco Aluminum Co., but they are not included in these totals.

BP: BP West Coast Products Inc. is listed as owning 68 parcels in the Whatcom County. The company’s most valuable parcel, its refinery on Grandview Road in Blaine, had a taxable value of roughly $890.4 million. The total assessed value of all of the company’s properties in the county was roughly $934.8 million in 2016.

On its refinery property alone BP paid roughly $1.5 million, or 22 percent of the Blaine School District’s M&O levy and $761,690, 19.8 percent of the district’s bond levy.

All of these numbers are generally consistent with a 2014 study of the economic impacts of Cherry Point Industrial Zone. Hart Hodges of Western Washington University and Bill Beyers of the University of Washington estimated that BP, Phillips 66, and Alcoa, the three big companies in the Cherry Point area, paid a total of $14.7 million in property taxes.

Of that amount, the authors deduced, roughly $2.6 million went to the Ferndale School District and $2.1 million to the Blaine School District. That report, titled Employment at Cherry Point, was commissioned by the Whatcom Business Alliance (WBA) and published in October 2014.

The report estimated the various companies in the Cherry Point Industrial Zone pay more than $200 million annually in total taxes. In addition to property taxes, the businesses also pay business and occupation (B&O) taxes, hazardous substance taxes, oil-spill response taxes, payroll taxes, and sales and use taxes.

Colleen Fiega, who works in communications at Phillips 66, said that her company accounts for roughly $45million to $50 million – upward to one-fourth – of that approximated $200 million total each year. And while a lot of those taxes go outside the county, much of it stays home.

The cleanup of Bellingham Bay, to name one example cited by the report, is largely funded by hazardous substance taxes paid by the oil refineries and aluminum smelter. Those taxes go to the state Department of Ecology to help clean up and manage solid and hazardous waste.

For more info about the impacts of business growth in the Cherry Point area of Whatcom County, please visit http://cherrypointgrowth.com/.