JAY – On the eve of the municipal and school district votes by residents, the Board of Selectpersons and Verso Corporation reached an agreement Monday night to resolve their three-year property tax assessment dispute on Verso’s Androscoggin Mill and associated properties.
In the agreement, the town accepts a graduated reduction of the mill’s valuation over the next four years and a tax credit totaling $4 million over the next three years in exchange for Verso dropping its abatement applications and appeals of the last three years.
Selectpersons approved the agreement in an executive session held Monday evening. On Tuesday, April 26, voters go to the polls to decide a $5.2 million town budget and a yes or no validation decision on the Regional School Unit 73’s $18.8 million budget set at a public hearing on April 7.
According to a press statement jointly issued by the town and Verso Androscoggin LLC, in exchange for the town’s agreement to reduce Verso’s property tax liability to more accurately reflect the assessed value of the mill property, Verso has agreed to withdraw its pending property tax appeals for the April 1, 2013, April 1, 2014, and April 1, 2015, tax years, and not to seek further abatements of taxes absent material changes to the mill property or operations from April 1, 2016 through April 1, 2020 tax years.
“This agreement is intended to allow both parties to achieve sustainable operations over the coming years based on changing circumstances concerning the mill’s taxable value,” the statement said.
Verso Corporation filed for bankruptcy on Jan. 26 with the U.S. Bankruptcy Court in the District of Delaware. In March, the paper company asked the federal Bankruptcy Court to settle the Jay mill’s valuation dispute in the Delaware court and out of Maine, arguing more than $11 million in tax refund was owed by the town since the mill’s assessed valuation has dropped over the last years.
The high costs of continued litigation on both sides was the major driving force for settlement, according to the agreement.
The reduction in the mill’s property tax liability will be paid over time by the town as credits against Verso’s future tax bills. Credits are to come in six installments of $666,667 each for the next three tax years bills in October 2016, April 2017, October 2017, April 2018, October 2018, and April 2019, for the recent shutdown of paper machines 1 and 2, the ground wood pulp mill and the sale of the two hydroelectric facilities in town, according to the agreement.
Additionally, the town agreed to reduce Verso’s gross tax liability payment. The following totals approved are before tax increment financing payments and business equipment tax reimbursements are factored in. For the current 2016 property tax year, that total is $6.75 million. For 2017 property tax year, $6.25 million; for the 2018 property tax year, $5.75 million; for the 2019 property tax year, $5.25 million; and for the 2020 property tax year, $4.75 million.
The agreement, approved by selectpersons Monday, is subject to approval by the bankruptcy court overseeing the Verso bankruptcy cases.
“The Town and Verso are pleased to have reached this agreement as part of a mutual effort to support the long-term viability of the Androscoggin Mill, which is an important goal of both parties,” the statement said.
It’s good to see the reductions are spread out, it should help reduce the shock of the impact.
I hope my valuation will be going down as well in the town of Jay. Just like the mill is not worth the old valuation, neither is my house. I don’t have expensive lawyers on my side, so we’ll see how I make out.
Funny thing is that actual property values drop when a town devalues them to “lower taxes”. I had $7000 magically wiped away last time. This move is the epitome of ” rearranging the deck chairs on the titanic”.
Our valuation on our Jay home has already been reduced but the tax rate went up, thus increasing our tax bill. Now with the huge school budget passing, and the mill commitment reduced, they will rise yet again. Combining the schools didn’t help us at all and in fact Jay pays a far larger amount of the total. It doesn’t really matter what ones valuation is. The Town needs X amount of money and they just raise the tax rate to cover it.
@Nell
Too bad that you will actually pay less this year on the school budget than you have in previous years. Check your numbers again.
Yes town of jay..change has come.
But don’t forget all those years where you salted and sanded the first snowflake and your roads were perfect…because of good OL’ IP.
Sucks but that was then this is now.
You Will live.