Credit: George Danby / BDN

The tiny settlement of Cary Plantation in Aroostook County formed more than 120 years ago from a logging camp. Now residents say rising property taxes have made local control an expensive burden and that the time has come to join the vast Unorganized Territory.

It’s a familiar story to many small towns on the edge. But with 218 residents, according to the 2010 Census, Cary might not be small enough.

Lawmakers on the State and Local Government Committee on March 9 rejected a bill that would have allowed residents to dissolve the plantation’s government and deorganize, fearing that a cascade of other towns, desperate for lower taxes, would follow suit. Earlier that day, lawmakers gave the thumbs up to Oxbow Plantation, with 66 residents, to join the Unorganized Territory in Aroostook County.

“If successful, Cary Plantation will be the largest municipality to deorganize in the state of Maine, and its success will encourage larger and larger communities to deorganize,” Maria McInnis, the fiscal administrator for the Unorganized Territory, said in testimony to the committee on March 9.

The size of the plantation shouldn’t matter because Cary faces the same problems — high tax burden and a small tax base — as the smaller Oxbow, according to Kai Libby, Cary Plantation’s first assessor.

Yet, towns of Cary’s size seldom deorganize successfully. Out of the 42 towns that have deorganized in the last century, few had more than 100 residents at the time. At least two exceptions were Benedicta, in 1987, and Madrid, in 2000.

Under Maine law, there is no prohibition against larger towns from joining the Unorganized Territory.

Size can matter when towns with larger populations hand control over to state and county officials because the cost of delivering services to those residents is dispersed across others already living within the Unorganized Territory.

‘A good fit’

For the 7,900 Mainers who live in the townships that dot the vast swath of Unorganized Territory, there is no local government. The state partners with the counties to deliver all services, such as tax collection, waste management and snow removal, formerly provided by the old town. Children are tuitioned to nearby school districts, or they attend one of three state-owned schools in the Unorganized Territory.

All taxpayers across the Unorganized Territory share in paying for these services, so residents often have lower property tax bills than their organized counterparts.

Each time a town joins the Unorganized Territory, the cost for the state and counties to administer services increases. But the number of Unorganized Territory taxpayers also grows, so the territory can usually absorb a small town with minimal effect.

“Bancroft was a good fit for deorganization,” said Paul Bernier, public works director for the Unorganized Territory in Aroostook County.

Only 60 residents lived in Bancroft when it joined Aroostook County’s portion of Unorganized Territory last summer. More than 20 residents were over age 60; just eight were school-age children.

Unlike organized towns, the state doesn’t subsidize education in the Unorganized Territory, so its taxpayers bear the full cost. This school year, that cost totals $12 million to educate 890 children, according to Shelley Lane, director of state schools for the Unorganized Territory. The addition of Bancroft’s school-age children added about $110,500 to the territory’s education costs, according to the Maine Department of Education.

Snow removal and road maintenance are among the most expensive services for Aroostook County to provide to its unorganized townships. Those account for more than 50 percent of the $1.3 million 2015-2016 fiscal year budget for Unorganized Territory services in The County, a 16 percent increase from the previous fiscal year. Bancroft accounts for about $125,000 of that amount, Bernier said.

This amount includes winter maintenance The County now provides for an additional 13.8 miles of road in Bancroft. In part because of the additional miles, snow removal costs increased by $74,000 for the current fiscal year. The County also must maintain 2.2 miles of that road during summer — the other 11.6 miles are state-aid roads managed by the Maine Department of Transportation.

“That snow removal number is huge,” Bernier said. “We don’t have that many communities with that many miles.”

But taxpayers in the Unorganized Territory likely didn’t take much notice when Bancroft deorganized because the 2015 tax rate of $6.93 per $1,000 of assessed property value represented a modest increase from the 2014 rate of $6.69. Before Bancroft deorganized, residents’ tax rate was $22.22.

Madrid, Maine, not Spain

Over the years, several towns with similar populations to Cary, drawn to the promise of lower taxes, have tried unsuccessfully to deorganize. In 2003, Milo, then with 2,383 residents, flirted with deorganization . So did Shirley and its 183 residents. Atkinson, population 326, has tried to deorganize four times since 1998.

State officials have long worried that Unorganized Territory residents could be pinched if larger towns deorganize. That’s because those towns bring more baggage with them into the territory — more miles of road in need of maintenance and more students in need of education — and residents who already live there could see taxes rise to cover the cost of providing those services.

“Those towns that have recently deorganized have found their mill rates substantially reduced once the state and county become responsible for service provision. This is only because the cost of those services is spread over a larger tax base which means that existing taxpayers in the U.T. have to pay more than they would otherwise,” the final report of the Legislature’s 1994 Unorganized Territory Education and Services Fund Study Commission reads.

That’s just what happened after the 171 residents of Madrid joined the Unorganized Territory in Franklin County in 2000.

After Madrid’s deorganization, residents in the Unorganized Territory in Franklin County saw the tax rate climb to $12.62 per $1,000 of assessed property value from $9.58 the previous year. Madrid residents, on the other hand, got a tax break: They previously paid a $16 tax rate.

About 66 percent of the increase was for Franklin County to provide services to Madrid, chiefly road maintenance and snow removal on 14 miles of road. Education for Madrid’s 30 school-age children accounted for 30 percent of the tax increase.

It’s hard to say what effect Cary would have on the tax rate in Aroostook County’s Unorganized Territory. The Department of Education estimates that providing transportation and tuition for Cary’s 18 school-age children would cost $200,000 the first year.

During the 2014-2015 fiscal year, Cary spent $66,430.95 for winter maintenance and snow removal on 12.6 miles of road, with another $24,292.77 for summer maintenance on 14.2 miles of road. Upon deorganization, The County would absorb the cost of maintenance for these roads as part of its workload in the territory.

The County didn’t conduct an analysis to determine what that cost would’ve been to take on all of Cary’s services, but “it would’ve been quite a big impact,” Bernier, the public works director, said.

The County takes no position for or against any town’s decision to deorganize, he said.

Now what?

With deorganization on hold, Cary residents are considering whether to appeal the state’s decision or try again during the next legislative session, which would push deorganization to July 1, 2019, at the earliest, according to Libby, Cary’s first assessor.

Some residents have even suggested that all plantation officials resign and that Cary cease operating as a town. Libby said that is “not a solution” for Cary’s mounting woes.

But as a small tax base balances a rising property tax burden, Libby sees no option for Cary other than deorganization. The question is whether the plantation can hold on until that happens.

In 2000, the U.S. Census Bureau recorded 217 residents in Cary, a population that has remained roughly unchanged. Yet, Cary’s tax rate has risen from $15.82 per $1,000 in assessed property value in 2010 to about $25 last year. Libby fears it could increase to $30 before the plantation completes deorganization.

Cary foreclosed on two properties in February for lack of property tax payment. Unpaid property taxes totalled $46,306.48 for 2014, with another $21,211.58 in outstanding taxes from 2013, according to a draft of the town’s latest annual report. This is starting to make it difficult for the plantation to pay its bills, Diane Cassidy, chairwoman of the plantation’s deorganization committee, told lawmakers earlier this month.

“Our financial situation is not going to change any,” Libby said. “So all [the Legislature] did was just buy some time.”