Appraisers dropped the value of Verso’s Jay paper mill more than 18 percent this year, which the Sun Journal reported will likely cause a spike in property taxes as the town also reimburses the company for valuations in past years.
Jay’s industrial appraisers valued the property at $291.4 million, down from a value of $357.9 million in 2016. Town officials told the Sun Journal that’s likely going to mean an increase in taxes as they also try to pay back past years of contested tax bills.
The town and Verso settled those old valuation disputes as part of the company’s Chapter 11 bankruptcy restructuring, during which it asked a bankruptcy judge to decide the matter before local and state officials.
The settlement gave the company $4 million for disputed tax bills in 2013, 2014 and 2015, after Verso alleged it was owed as much as $11.4 million for those years. The town agreed to make those payments in six installments, at about $1.33 million per year.
Town officials told the Sun Journal that the combination of those payments and the latest drop in valuation will likely raise taxes about 7.5 percent, to a rate of $22.70 per $1,000 of assessed value.
The drop in value comes after the mill announced it would permanently shut down its No. 3 paper machine and cut 120 positions for good. It announced those cuts and 70 more in late 2016, calling the layoffs associated with the paper machine shutdown temporary.
Troubles for the paper industry in recent years have put many towns in conflict with their largest taxpayers, who argue that assets in the troubled paper industry are a fraction of their past worth. In its bankruptcy auction last fall, the Lincoln Paper and Tissue Mill sold for about 11 percent of the assessed value of its personal property.
Jay officials will meet to set the tax rate on Aug. 15, the paper reported.