JAY — Town officials mailed an application Wednesday to the state requesting the town’s 2017-18 state valuation be reduced because of the decreased valuation of Verso Androscoggin’s paper mill and associated property.
A lower state certified valuation would result in an increased state education subsidy for the town and more revenue-sharing funds from the state for the next fiscal year.
It is the second time this year that Jay has filed an application with the state tax assessor for an adjustment related to a sudden and severe disruption of value because of the declining valuation of the mill. In June, the state reduced the town’s certified valuation by $142.35 million for each of the years 2013, 2014, 2015 and 2016.
The new application is in relation to the 2017 state valuation.
According to the information Jay submitted in its application Wednesday, the town realized a loss in the valuation base of $122.86 million from a single taxpayer because of an unforeseen “sudden and severe” event regarding Verso’s Androscoggin Mill. That event included Verso shutting down a paper machine, pulp dryer and ground-wood operations and the loss of 300 full-time jobs in the fourth quarter of 2015.
Of the $122.86 million, the taxable value loss is $109.67 million and $13.19 million is the loss in the state business equipment tax exemption reimbursement, according to Town Manager Shiloh LaFreniere’s information.
The town’s professional appraisal of the mill and equipment in 2015 was $512.5 million compared to $357.9 million this year.
Also factored into the request to adjust the town’s state certified valuation is Verso Corp. and 26 subsidiaries filing for Chapter 11 bankruptcy protection in January. Verso emerged from Chapter 11 in July and had restructured to eliminate $2.4 billion in outstanding debt.
The town’s state 2016 certified valuation of the town was $722.25 million before the events leading up to Wednesday’s valuation adjustment request. The 2015 combined taxable and business equipment tax exemption valuations were $468.43 million.
After the “sudden and severe” events occurred, the 2016 total valuation base of the town was reduced to $620.35 million. The 2016 combined taxable and business equipment tax exemption valuations were reduced to $340.96 million.
The town’s decreased total valuation base was factored in to the 2016-17 tax rate of $21.10 per $1,000 of property valuation that was set in August. It was $3.85 more than last year, which factored in the lower value of the mill and a settlement agreement the town reached with Verso in April.