Area Leaders Work To Aid Mill In Its Fight Against Tax Credit

By Naomi Hatch and
Tammy Gray-Searles
   Concern is being expressed throughout the community regarding the Black Liquor Tax Credit and the impact it will have on Catalyst Paper’s Snowflake Mill.
   John McKee, general manager of the Snowflake mill, announced last week that this tax credit could put Snowflake’s paper mill out of business. He noted that the Obama administration has recommended in the 2009-10 budget that the tax credit be repealed, and asked for local support of that.
   Only a fraction of paper and pulp producers can take advantage of this tax credit, which was intended to increase the use of ethanol and biofuels in vehicles, and it puts recycled mills at an enormous disadvantage. Catalyst is a recycled mill.
   “I have met with the Catalyst Paper management and labor leaders,” said State Senator Sylvia Allen. “I am very concerned and frankly outraged that these kinds of federal policies can be put into effect and then abused. We seem to be in the business of favoring one industry over another, and it is causing undue hard-ship on our economy.”
   “At our meeting we talked at length about what kind of efforts could be made. The community must help us and write letters to Senators McCain and Kyl, and also to our governor. We must not be content to do one letter, but to write over and over so that the senators and the governor will keep this issue in front of them so that they will get the needed federal legislation passed to stop this.
   “In the meantime, I am concerned about the mill being able to hold on while this is being accomplished. I will do all I can, and I will keep pressure up on my end and get my fellow legislators to help,” said the senator.
   State Representative Bill Konopnicki noted that he and Rep. Jack Brown are working together on this issue.
   “We’re doing everything we can to not only support the change so that it can’t be done, but have it ef-fective immediately or retroactively, and have the other plants give back the money. The odds are it won’t happen, but it sends a clear message to them,” said Konopnicki.
   The Navajo County Board of Supervisors has written a letter asking Congresswoman Ann Kirkpatrick to take action and end the Black Liquor Tax Credit, calling it a scam and explaining the consequences it has had on Catalyst.
   “The Navajo County Board of Supervisors wishes to alert you to the unfair advantage of the Black Liq-uor Tax Credit, and the job loss it is creating in our county,” the letter states. “As you will recall, the 2005 Highway Bill authorized a 50-cent per gallon tax credit for blending alternative fuels with traditional fossil fuels. Unfortunately this green incentive, which was intended to increase biofuel production, has been sub-verted by the pulp paper mill industry to drive recycled material mills, like Navajo County’s Catalyst Paper Snowflake Mill, out of business.”
   It further advises Kirkpatrick of the job losses already sustained by Catalyst in Snowflake, and the pos-sibility of the mill shutting its doors completely. The letter also notes that the Snowflake mill produces 100-percent recycled paper.
   “The consequence has already been devastating to Northern Arizona. The Catalyst Paper Mill in Snow-flake cannot overcome the competitive advantage pulp paper mills are receiving through the tax credit,” the letter states. “Our residents are losing jobs and our county is losing tax revenue. The situation is dire and Catalyst has already reduced its workforce by about 25 percent in 2008, going from 434 to 329 employees; reduced its operations to 22 days per month, producing at only 75 percent capacity; and reduced its revenue by 25 percent.”
   The board called for Kirkpatrick and her fellow legislators to immediately end the tax credit instead of waiting for it to sunset on Oct. 1.
   “We are pushing every legislative button we can find,” said Taylor Town Manager Eric Duthie. We are asking for support from our congressional leadership.” He noted that town officials have contacted U.S. Senator Jon Kyl directly, as well as state legislators and Governor Jan Brewer, and are asking them for support.
   “We’re asking legislators to press the issue and plug the hole in the tax break immediately and not wait for the president to do it. It’s reminiscent of the alternative fuel fiasco in Arizona,” said Duthie. “That seems to at least catch the Arizona legislators’ attention.
   “We’re following up with written concerns, we’ve spoken directly to staff and to legislators, and are supporting Catalyst,” Duthie concluded.
   Catalyst officials have been meeting with legislators regularly, so local officials are letting the legisla-tors know that they are supportive of Catalyst and would appreciate anything they can do immediately.
   Snowflake Mayor Kelly Willis said that as a council they haven’t talked about it much, although he acknowledged, “It’s a very concerning thing, and we are going to write our legislators and governor and see what they can do.” This will be an item on the council’s next agenda.