JAY — Legislation that would have reimbursed the town $600,000 for lost state revenue-sharing funds as a result of the Androscoggin Mill explosion in 2020 has died in the Senate.
Sponsored by Rep. Sheila Lyman, R-Livermore Falls, who represents Jay, the bill passed through the Taxation Committee and was approved by the House and Senate last spring. It went to the Appropriations and Financial Affairs Committee in June for funding but died after it went back to the Senate.
A legislative office representative said the bill was not one the Legislature decided to bring back for reconsideration in January 2024.
After a digester explosion at the mill in 2020, town leaders used $2.25 million in undesignated funds in 2021 to keep the property tax rate from rising by $8.80 per $1,000 of assessed value to compensate for the lost property tax revenue from the mill. However, they didn’t realize the additional spending would cause a $600,000 reduction in state revenue-sharing money from the state this year.
The tax rate still increased by $3 per $1,000 of valuation in 2021.
“We learned that making use of the undesignated balance — the town’s savings — to help stabilize the tax rate for residents in years when there were big valuation losses actually hurt the town financially,” LaFreniere previously said.
The area’s legislative delegation, including Rep. H. Sawin Millett Jr., R-Waterford, who is on the Appropriations Committee, worked very hard to find a way to fund it and keep some facet of the bill alive but it didn’t move forward, Lyman said.
“It was a very big disappointment,” Lyman said. “It is very discouraging.”
“We worked closely with our local representatives to propose this bill and were disappointed to learn that the Legislature was not able to find a way to correct what we see as an unintentional penalty within the sudden and severe valuation loss program that caused the town of Jay to lose $600,000 in revenue-sharing this year,” LaFreniere wrote in an email Thursday.
“This was a very unique request and we were hopeful that they would find a way to restore the lost funding,” she wrote. “The legislation initially passed both the House and Senate and was sent to Appropriations. Unfortunately it ultimately fell apart and the funding will not be restored.
“The $600,000 would have been utilized by the town to help control the increase in the tax rate that we will see this year following the closure of the Androscoggin paper mill,” LaFreniere added.
Sen. Lisa Keim, R-Dixfield, who also represents Jay, sponsored a related bill that will fix the state Adjustment for Sudden and Severe Disruption of Valuation law for the long-term.
The latter bill has been carried over to the next session, LaFreniere previously said.
The town has filed for the state’s Adjustment for Sudden and Severe Disruption in Valuation four times. The last time was in 2021, and it will again because the mill closed permanently in March.
One of two wood pulp digesters in the mill exploded April 15, 2020, leading Pixelle Specialty Solutions to permanently idle one paper machine, lay off workers and cease making wood pulp. Pixelle had continued to operate two specialty paper machines using purchased pulp until March, when it shut down permanently.
The state valuation program, if a town qualifies, affects the amount of money the town receives in state aid to education and state revenue-sharing.
When state revenue-sharing projections were made earlier this year, Jay officials and assessing agent Paul Binette were surprised to see that the town’s projected amount had dropped from last year, LaFreniere previously said.
LaFreniere and Binette asked several questions of Maine Revenue Services and the state treasurer’s office about how the formula works and what numbers play into it.
Last year, the town was projected to receive $1.4 million in revenue-sharing, she said. This year it was projected to be $1.1 million.
Had town officials not used the money from the undesignated fund balance in the 2021-22 tax commitment, the town’s projected revenue-sharing would be $1.7 million, LaFreniere previously said.
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