Deal to cut mill’s valuation by millions will have ‘significant impact’ on Madawaska budget

Posted Aug. 31, 2012, at 11:17 a.m.
Last modified Aug. 31, 2012, at 3:54 p.m.

MADAWASKA, Maine — Municipal and school officials can now roll up their sleeves and begin working on their respective budgets in the wake of Twin Rivers Paper Company’s tax abatement request.

The mill, formerly Fraser Paper Inc., had already received a $25 million valuation reduction for the previous fiscal year bringing the total valuation to $145 million in FY 2011. Twin Rivers had been looking for a $130 million reduction, which would have dropped the mill’s overall valuation to $40 million.

Instead, the Madawaska Board of Selectmen agreed to assess a valuation of $105 million for the current fiscal year and reduce that assessment to $85 million for FY 2013-2014.

In the absence of an agreement, the town — which normally has a new budget in place by the first of July each year — has been operating on a month-to-month basis.

“We can now move forward with our budget,” Christine Therrien, Madawaska town manager, said Thursday. “Obviously with the [valuation] reductions there will be some cuts [and] there will be a significant impact.”

The first municipal budget planning meeting is set for 6:30 p.m. Tuesday, Sept 4, at the town office.

“We are unsure when a final budget will go to the voters,” Therrien said. “With this first budget meeting we are looking at where we are, what we have to work with and what the impacts will be.”

At this point, she said, all departments and everything is fair game.

“It’s going to be tough to make a budget and not raise the mill rate,”James Soucy, chair of the Madawaska Board of Selectmen, said Friday morning. “We are going to do the best we can for the town and try to put things together.”

The current mill rate in Madawaska is $15.90. According to the website www.city-data.com, the average value of a home in 2009 was $80,681.

As officials move forward with a budget, Soucy said, they also will look at avenues for additional funding for the town and make every attempt to avoid eliminating positions.

Because the loss from last year’s abatement was greater than 2 percent, the town is eligible for some monetary relief from the state’s Sudden and Severe Impact Fund.

“We won’t get the entire amount we lost,” Therrien said earlier this summer. “But we will get a percentage [and] I have to say the property tax division in Augusta has been great assisting us throughout this whole thing.”

The decrease in Twin Rivers’ valuation represents a 33 percent reduction in property tax revenue for the town and could add an additional five or six mills to the current tax level if the town does not take action, Therrien said in July.

“At the [budget] meeting Tuesday we will assess any budgetary cuts for the current year and analyze how to reduce spending to have the least impact on the taxpayers,” she said.

The drop in the town’s largest employer’s valuation was not a total surprise, Soucy said.

“We knew this was coming, you could see it was coming,” he said. “With the way the economy is right now and the paper industry doing so bad, everyone is struggling.”

Therrien and Soucy agree it is too soon to say which — if any — municipal services will be affected by the reduction.

“We have to really look at the whole picture,” Souch said. “Ask me again in a few weeks. I think we’ll do okay this round, but it’s going to be tough.”

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