EAST MILLINOCKET, Maine — Town leaders voted Monday to contest the state’s $106 million town valuation and thereby qualify for more state aid.
The Board of Selectmen voted 5-0 after an hourlong executive session to authorize Assessor William Van Tuinan to prepare paperwork to file an appeal of the valuation with the state Board of Property Tax Review. Selectmen did not discuss the matter during the meeting.
The town’s attorney, Dean Beaupain, said that the town hopes the appeal would lower the town’s valuation to Van Tuinan’s estimate for the town, $86 million. That would increase state aid for education and lower the town’s county taxes, but no one has calculated by how much, Beaupain said.
“Those are the two main benefits on it, really,” board Chairman Gary MacLeod said after Monday’s meeting.
Selectmen Mark Marston said the key difference between the state and town estimates is the valuation of the Great Northern Paper Co. paper mill. The town will value the mill at less than its present valuation, $20 million, when the town’s mill rate is set. Selectmen expect that will happen during a meeting on Oct. 29, he said.
“I think the state assumed last year’s valuation and didn’t take into account the mill closure,” Marston said.
GNP Maine Holdings LLC, owner of Great Northern Paper Co.’s East Millinocket operation, filed for Chapter 7 bankruptcy last month in Delaware, where the firm was incorporated. The mill ceased operations in February, with 212 of 256 workers laid off. About 20 workers remain employed maintaining the mill, union officials have said.
Documents filed last week with the bankruptcy court in Delaware — available at bankruptcy court in Maine — showed the company that owns the East Millinocket paper mill owes $65 million to its creditors but has just $28.15 million in assets.
The money owed to companies and individuals that have secured claims either through liens or court judgments totals $42.34 million, including $20 million owed to Stonehenge Community Development of Baton Rouge, Louisiana, and $20 million to Enhanced Capital New Market Development Fund of New Orleans, Louisiana, which hold mortgages on the mill.
Unsecured creditors are owed $22.6 million. The company listed nearly $117,500 in accounts receivable in its bankruptcy filings.
The shutdown devastated East Millinocket, which according to state officials’ most recent estimate had a 20 percent unemployment rate in August.
Great Northern’s delinquency for the last two years with its personal property and real estate taxes, about $657,900 annually, is a major component to mill rate estimates for this year falling between $30 and $38 mills, although recent budget cuts place the most likely mill rate at $30 or $31 per every per thousand in property valuation, officials have said.
The town’s present mill rate is $21.93, or $1,096 in property taxes annually for homes valued at $50,000. A $31 mill rate would leave owners of $50,000 properties paying $1,550; a $32 mill rate, $1,600, or $504 more per year than they paid under the present rate.
By comparison, the statewide average adjusted property tax rate was $13.99 in 2012, the most recent year statewide figures were available, and the state’s unemployment rate rose slightly in August to 5.6 percent, up from 5.5 percent one month earlier.
BDN reporters Judy Harrison and Darren Fishell contributed to this report.