A bill to help offset property taxes lost in Jay from the Androscoggin Mill’s closure in March got a public hearing today before the Legislature’s tax committee.
The bill, sponsored by Rep. Sheila Lyman (R-Livermore Falls), proposes a one-time payment of $600,000 to the town to help counter the revenue loss this year, which she said is a hardship for residents, especially those who lost their job at the mill.
Jay resident and homeowner Aimee Brown filed testimony asking the taxation committee to favorably consider the bill to offset the property tax loss. Lyman said the revenue shortfall will be overwhelming to many people in Jay.
“I can’t begin to express the economic hardships and financial difficulties that the closure of our local mill has brought to our area,” Lyman said.
The mill, owned by Pixelle Specialty Solutions of Pennsylvania, laid off about 230 workers when it closed in March. The moves came after the Franklin County mill tried unsuccessfully to battle financial and business challenges after the April 2020 explosion in one of its digesters. By December the mill’s owners decided not to rebuild the damaged digester.
The taxable value of the mill dropped to $86 million from $271 million after the explosion. The town used its rainy day fund to minimize a possible huge tax increase that would have harmed most taxpayers, Lyman said.
But by using that fund, Jay will lose $600,000 in revenue sharing with the state. R evenue sharing is distributed each month to each municipality based on a formula that includes municipal populations, state valuations and tax assessments. The monthly revenue sharing pool is funded by setting aside a percentage of the state government’s sales, service provider, personal and corporate income tax receipts for the month.
Jay’s formula changed when it used money from its rainy day fund, leaving what Lyman said is an “unintended effect” of using the fund. It is asking the Maine State Treasurer to help offset that.
The state treasurer’s office did not know of a similar case in the past dozen years, but state treasurer Henry Beck said, “we are sympathetic to the situation and understand what Rep. Lyman and others are trying to achieve.”
After the paper mill in Millinocket closed in 2014, the town raised property taxes the following year as real estate valuations plummeted, primarily because of the demolition of buildings at the Katahdin Avenue site that was once home to the mill.
The potential impact of Lyman’s bill on the state’s revenue is not yet determined.
Pixelle completed its purchase of the Jay mill in February 2020 as part of a $400 million deal with Verso Corp. The mill’s closure leaves only six other operating paper mills across Maine.
