East Millinocket voters face grim future, steep tax increase without mill money

People listen to the meeting of the East Millinocket Board of Selectmen (sitting around table) in this January 2014 file photo.
Gabor Degre | BDN
People listen to the meeting of the East Millinocket Board of Selectmen (sitting around table) in this January 2014 file photo. Buy Photo
Posted June 03, 2014, at 2:44 p.m.
Shirley Tapley
Nick Sambides | BDN
Shirley Tapley Buy Photo

EAST MILLINOCKET, Maine — Taxes could rise by as much as $754 on $50,000 properties in the fiscal year that begins July 1 under the difficult scenarios voters will begin to confront at the annual town meeting on Tuesday.

Voters attending the 6 p.m. meeting at Schenck High School face some very hard questions raised by the uncertain future of the town’s largest taxpayer, Great Northern Paper Co. LLC, and its continued delinquency on its $657,900 property tax bill for the 2013-14 fiscal year, officials said.

If the mill reopens by August, taxpayers will likely face a $27 property tax rate for the 2014-15 fiscal year. The new mill rate is proposed under the $6.8 million total town and school budget for 2014-15 that residents are due to vote on at the meeting, officials said.

If the mill remains closed, the town’s valuation of it will drop from $30 million to $3 million and force town leaders to set a mill rate of $37 this fall to fund the $6.8 million budget, officials said.

And if Great Northern Paper continues its delinquency on the $657,900 in property taxes it owes, town and school leaders will probably have to make significant cuts to the budget or raise property taxes in several months, town Administrative Assistant Shirley Tapley said.

“You are looking at drastic cuts or the town’s need to look at getting together and start looking at shared services,” Tapley said Tuesday.

She called the mill’s future “the wild card right now.”

Under the town’s present $21.93 mill rate, owners of $50,000 properties pay $1,096.50 in property taxes annually. Those owners would pay $1,350 at $27 mills and $1,850 at $37 mills.

The town’s assessor and Board of Selectmen usually set the mill rate in September or October. The paper mill, which makes newsprint, closed in January, and 212 of its 256 workers were laid off on Feb. 6. Officials at Cate Street Capital, which bought the East Millinocket and Millinocket mills for $1 in 2011 and created Great Northern Paper, announced when the layoffs occurred that they hoped to restart the mill in 16 weeks.

That deadline lapsed in mid-May.

Selectman Mark Marston said school leaders have to stop relying upon town leaders to balance the town’s overall budget. Town leaders laid off four town workers, including two police officers, in March in response to Great Northern Paper’s tax delinquency, he said.

The School Board also has made deep cuts, proposing to cut two elementary school teachers and a halftime high school guidance counselor under its proposed $4.2 million school budget, but the impact of the school and municipal budget cuts is thwarted by state cuts to school aid and municipal revenue-sharing that more than offset them. Under the proposed $6.8 million budget, town residents will have to raise $260,000 more than was raised this year, Tapley said.

“It has always made me mad when the School Board says that we have to find the rest [of the money]; that it is out of their hands,” Marston said. “We on the municipal side have made all the cuts that we can, and they need to make more cuts. They have made a lot of cuts already, but they have more that they can do.”

East Millinocket’s situation closely parallels that of its larger neighbor, Millinocket, whose town and school leaders will meet in a workshop to discuss budget issues at 5 p.m. Wednesday in the town office.

Millinocket leaders are contending with the projected loss of $2.3 million in property tax revenues caused by Great Northern Paper, also that town’s largest taxpayer, planning to auction papermaking machinery from its Millinocket industrial park later this month.

Great Northern Paper also is delinquent on $2.3 million in property taxes it owes Millinocket for the 2013-14 fiscal year. Millinocket filed a lien against Great Northern Paper for almost all of that money last month. Another lien will be filed for the rest in a few weeks. Millinocket has a $28.95 mill rate and would need to increase its rate to $38 mills by the 2015-16 fiscal year to offset the loss of Great Northern Paper revenues, Millinocket leaders have said.

East Millinocket leaders haven’t yet decided whether to file a lien against the company, Tapley has said.

Both communities were rocked by the Feb. 6 layoffs and face dramatically-changing populations.

“We have a bunch of guys who aren’t working at the mill anymore. We have a bunch of retirees and we have a bunch of people coming in who are from higher-needs populations,” Marston said.

 

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