Harbor Paper $94,000 behind on taxes

Hoquiam schools and local governments could lose out on about $87,000 this year if Harbor Paper doesn’t pay its past-due personal property tax bill.

Grays Harbor County Treasurer Ron Strabbing said the first half of the tax payment, about $43,500, was due April 30. But when the payment wasn’t made, the entire amount became due. And after months of interest and late fees, the company now owes about $94,000.

And despite several calls to the company, county officials aren’t sure if Harbor Paper will pay willingly, or if more drastic measures must be taken.

“We’re constantly calling them right now to figure out what’s up, but we haven’t heard much,” Strabbing said. “I’m sure we aren’t the only ones they owe money to, so we’ll have to call around and see what’s happening.”

Lisa Tener, a spokeswoman for Harbor Paper’s parent company Elliot Rust Holdings, declined to comment on the taxes Harbor Paper owes, or any steps being taken to pay them.

The personal property tax is only one part of the yearly taxes Harbor Paper pays to the county, and covers the mill equipment. Strabbing said Harbor Paper is still current on the rest of its taxes — the dompany paid the first half of its property tax bill, about $44,000, before the April 30 deadline. The remaining $44,000 is due Oct. 31.

The Hoquiam School District will lose the largest chunk of change if the taxes don’t come in, about $27,500 for its maintenance and operations levy and $10,200 for school bonds. But Superintendent Mike Parker said the loss of tax money doesn’t come as a surprise, and they’ll make do.

“The fact that they’re running behind on their taxes doesn’t surprise me, and it certainly doesn’t look good for the company,” Parker said. “I think we’ve been mindful of our money, but we’d still like to see them up and running and paying on the (maintenance and operations) again. I’m disappointed, but am I surprised? No, I’m not.”

Parker said the district has saved up funds for situations like this, and that no cuts will be made as a result. But the superintendent said he doesn’t like having to dip into reserve accounts. The best-case scenario, he said, would be for the mill to start up so that the district and the community can rely on a steady source of income again.

Three levels of government will also feel the affects of Harbor Paper’s inability to pay taxes, with the state being owed about $14,100, Grays Harbor County about $9,500 and the City of Hoquiam about $18,300.

Hoquiam City Administrator Brian Shay said he’s also not surprised that Harbor Paper is behind on taxes, but he’s more worried about what would happen if the mill went out of business. With the mill permanently closed, Hoquiam would lose about $250,000 in business and occupation taxes and utility taxes each year.

“If the paper mill could re-open, that means $250,000 per year to the city general fund,” Shay said. “So when we think of parks, streets, police and fire, I mean, the paper mill is huge to our budget.”

“So we absolutely need that mill to re-open,” he added.

The county is likely to take action against Harbor Paper sometime this year if the taxes aren’t paid — but governments and the school district likely wouldn’t see the money for a year or two.

“We have to figure out what we’re going to do,” Strabbing said. “In the end, we might have to foreclose on the building. Or we could go into the building and see what equipment they owe us for and seize that. And those are really our only recourses.”