The Port of Seattle Commission is considering whether to increase the rate it taxes King County property owners by 13.2 percent next year to maintain its existing levy of $75.9 million.

The Port of Seattle Commission is considering whether to increase the rate it taxes King County property owners by 13.2 percent next year to maintain its existing levy of $75.9 million.

Because of a decline in property values, the dollar amount for many homeowners would actually go down, from $79 this year to $78 next year on a home assessed at $350,000.

The drop in property values and new construction means the Port would collect $67 million if the current rate remains unchanged.

The commission this week debated whether to raise the rate, or keep it flat and deal with the shortfall by cutting new investments and deferring repairs or environmental expenses.

The question comes at a time when public trust in the Port has plummeted after a state audit in 2007 and a federal investigation in 2008 found lax management of construction projects, lack of transparency and other failings that led to waste, fraud and abuse.

The current tax rate is 19.7 cents per $1,000 of assessed value. The commission debated Tuesday whether to raise it to 22.3 cents.

Commission members said they will need money in reserve for environmental costs and potential costs associated with replacing the earthquake-damaged Alaskan Way Viaduct.

Fred Felleman, a consultant for Friends of the Earth, wanted more information on what those environmental costs are, and he questioned the type of projects that should fall within the public levy and which should be paid for by industry users, to avoid giving them a subsidy.

For example, adding electricity to Pier 66, a cruise terminal, benefits the public and also saves tenants a lot of money at the dock, so “why aren’t they involved in cost saving?” he asked.

Commissioner Pat Davis opposed allowing the levy to fall short next year. “I don’t think it’s smart to cut it down to 67 now,” she said, adding that the commission would be hard-pressed to ask for an increase later. “In 20 years we never had the political will to do that,” she said.

Commissioner Gael Tarleton discussed an option to put a percentage of tax revenue in 2010 into an environmental reserve for future obligations, including cleanup of the Lower Duwamish Waterway.

“A lot of the public don’t trust us to put it away for the future,” Tarleton said. “I’m willing to try to make them see we can live within our means and within our promise.”

The Port has been too dependent on taxes in recent years and should operate on revenues from tenants at Seattle-Tacoma International Airport and its shipping, fishing and cruise-ship terminals, according to a report by the Municipal League of King County.

Its recommendation is to fund the Port primarily through self-sustaining enterprises, and use the tax levy for other public purposes, such as developing transportation infrastructure and cleaning up environmental damage.

Kristi Heim: 206-464-2718 or kheim@seattletimes.com