MILLINOCKET, Maine — Town leaders are pressing Great Northern Paper Co. LLC for part of the $831,240 the company received from the state as a personal property tax break last month to address the approximately $657,700 GNP owes the town in property taxes, an official said Monday.
GNP, the town’s largest single taxpayer, received the check from the state Revenue Services Department as part of the Business Equipment Tax Reimbursement program Aug. 29 but hasn’t paid Millinocket the property taxes it owes for the 2013-14 fiscal year, Town Manager Peggy Daigle said.
Nor could state officials legally deny or withhold the money from GNP under state law, Daigle said.
State officials “checked every possible legal avenue, and there wasn’t any for them to use discretion and send it to us or hold onto it until GNP showed that they have paid their bills,” Daigle said Monday.
“We did review the law very carefully, and it is our view that they were due the reimbursement,” Michael Allen, associate commissioner for tax policy for the Bureau of Revenue Services, said.
The reimbursement only covers payments GNP made during calendar year 2013 — or in Millinocket’s tax calendar, for portions of the 2012-13 and 2013-14 fiscal years, he said.
Efforts to reach Alexandra Ritchie, spokeswoman for GNP, were not successful Monday.
Daigle discussed the matter with state legislators, including Rep. Steve Stanley, D-Medway, who have expressed a willingness to examine rewriting the law to limit companies that fail to pay their income taxes or vendors from receiving any BETR funds, she said.
“I just think that it is wrong for taxpayers to be footing a check of that sort to a company that owes millions of dollars to towns and to the vendors that have supplied services and supplies,” Daigle said. “There is a need for change to the law so people far smarter than I are going to have to look at this.”
BETR, a business and economic development tool offered by the state, allows eligible businesses that work through municipalities 12 years of reimbursed local property taxes and gradually curtails the tax break to 50 percent on the 18th year, according to a program description at maine.gov.
GNP hired Koster Industries to auction its equipment from its Katahdin Avenue industrial site June 17 to pay taxes owed to Millinocket and the Internal Revenue Service. The auction allegedly came in response to IRS and town liens on the equipment.
But Koster only paid $531,567 to the town to date for the money it owes for the 2013-14 fiscal year. Koster made a $96,417 payment July 31, a $76,650 payment July 24, a $133,500 payment July 18 and a $225,000 payment July 3.
A few weeks after the auction, Koster officials told town leaders that collecting money from the auction participants has been much more difficult than they expected. The non-payments are among a series of setbacks for GNP since it came into the region in 2011.
Town leaders have said they have been diligent in protecting the town’s interests with GNP and Koster while recognizing a plan to build a $140 million pellet mill in Millinocket by one of GNP manager Cate Street Capital’s other companies, Thermogen Industries, holds great economic potential for the state if it ever launches.
Cate Street has said it hopes to begin construction of the Thermogen plant this fall.
Daigle said she doesn’t blame state officials for releasing the BETR funds back to GNP.
“I understand that they have no avenues to turn to to make a change because they are constrained by the law, but if there is a flaw in the law we ought to start making some changes to it,” she said.
In addition to what is owed Millinocket, GNP owes neighboring East Millinocket $658,657 in personal and property taxes for 2013-14. It recently made an interest payment on the debt.