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Officials: Loss of Intalco Would Have
Been Hit to Taxpayers, Governments

by Sam Taylor
The Bellingham Herald, December 27, 2009

(Philip A. Dwyer) Workers applaud to speeches as BPA seals power deal with Alcoa Intalco Works aluminum smelter

News that Alcoa's Intalco Works plant west of Ferndale will not close means that taxpayers and local governments dodged a significant impact on taxes and the economy.

Prior to the Monday, Dec. 21, announcement that Intalco has reached a low-cost power deal with the Bonneville Power Administration that will keep the aluminum smelter open, Whatcom County Executive Pete Kremen was asked what he thought a closure would mean. He deemed it "monumental."

"It would be a devastating blow for Intalco to cease operation," he said.

In 2009 Intalco's property tax was $973,000, according to Whatcom County Treasurer Steve Oliver. That includes land that's not part of the major parcel where the plant is located. The smelter contributed taxes to local schools, roads, the county, the port, the county library district and more.

In simple terms, without Intalco, everyone else in the area would have to contribute more taxes to pay for the same services, said County Deputy Administrator Dewey Desler.

Official figures on how much sales and use tax the company and its employees contribute to the county's economy are not public record, but

Desler said that it made a significant impact.

"Obviously when you have hundreds fewer employees spending money and participating in the economic life of a community, the community will be less vital," Desler said.

Monday's announcement guaranteed Intalco low-cost power for 17 months to operate its two potlines. The deal also called for five more years of discounted power, as long as legal challenges are overcome and the market allows.

During the announcement at the smelter, officials touted an economic analysis that indicates the Intalco plant creates a total of 2,000 jobs, counting both direct and indirect economic impact.

"This is about the entire state," Gov. Chris Gregoire said. "Loss of 2,000 jobs here would be absolutely devastating."

A May 2006 report commissioned by Alcoa provides some detail into the economic impact to Whatcom County.

Though the figures are for the 2005 time period, they give a relative snapshot to today's situation. In 2005, the company employed 460 people, who earned $35.4 million in labor income. Since then, the plant has contracted and expanded, but there are about 528 jobs now.

Including the indirect impact, Intalco Works supported 1,570 jobs or 1.5 percent of total county employment in 2005, according to the report. Alcoa accounted for $77.8 million in personal income - 1.3 percent of the county personal income - and $3.3 million in local taxes.

That was about 1.6 percent of county local taxes, the report states.

Sam Taylor
Officials: Loss of Intalco Would Have Been Hit to Taxpayers, Governments
The Bellingham Herald, December 27, 2009

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