NewPage makes case for lowering property taxes

RUMFORD — The Rumford Paper Mill is paying $2 million more in property taxes than the next highest NewPage mill, according to recent statistics released by the mill.

The Rumford Paper Mill pays $4.4 million annually in property taxes, which is the highest annual property tax of all eight NewPage mills, and $2 million more than the Escanaba mill in Michigan, the mill with the next highest property tax, said mill spokesman Anthony Lyons.

“The Escanaba mill and the Wisconsin Rapids mill are much more modern and newer than our mill,” Lyons said. “Yet somehow, their tax rates are much lower than ours in Rumford. Something has to be done.”

The mill also faces the possibility of losing $1 million in tax reimbursements from the Business Equipment Tax Reimbursement Program. BETR is a program created in 1995 that allows businesses to be reimbursed a portion of the property tax they pay to their local municipality.

Lyons said the existence of BETR has helped the Rumford Mill remain competitive in a demanding market by reimbursing it up to $1 million each year, but the governor's current budget proposal includes skipping a year of payments to the Rumford Mill, which will raise the mill's costs by $1 million.

“Even with our tax reimbursement, we still pay $1 million more than the Escanaba mill,” Lyons pointed out. “We can't afford to lose that money.”

On March 13, Lyons testified before the Joint Committee on Appropriations and Taxation, speaking of his opposition to the governor's proposal to skip a year of BETR reimbursements.

“I know that right now, there are work sessions being done on that bill, but I haven't heard anything yet,” Lyons said.

The Rumford mill has even turned to the town of Rumford to ask for help in reducing the mill's tax bill by reducing spending during the town's next budget cycle.

Town Manager Carlo Puiia said that he met with Kelly Berry, mill controller, and Jerry LeClaire, mill manager, on Feb. 20 to discuss the mill's tax bill and ways the town can help lower it.

“We certainly have a better understanding of the mill's situation,” Puiia said Monday afternoon. “They showed me a chart explaining how the Rumford mill is currently paying a greater amount of taxes than the other mills in NewPage.”

Puuia added that there is a provision in the town charter that states if there is a monetary issue after the town budget has been approved, a special town meeting can be called to make a change. The vote would be by secret ballot.

Lyons said he's confident that the meetings with the town manager went well.

“I think he now understands better than he did before,” Lyons said. “Hopefully, the board will process the information and be more proactive rather than ignoring it.”

Ron Hemingway, president of Rumford's Local 900 United Steelworkers Union, said, “Rumford should be thinking, 'What if the mill shuts down and we lose everything?' It'd be wise on their part to try and do something about the mill's tax bill before it becomes a nail in the coffin, and they're left looking back and saying, 'What could we have done different?'

“The high taxes in Rumford is putting undue stress on the mill," he said. "I believe that the mill is under a threat right now, and that we'd be secure if we reduced some expenses. The tax bill is one of those expenses, so it's important to get that under control, ” he added.

During a budget hearing for initiated article requests Monday evening, Puiia addressed citizens, including several mill employees, and said he understands the financial pressure that the mill is under, and the hearing was “for social services and things that this town needs around.

“We will only be entertaining comments about the items on the agenda,” Puiia said. “I know this board is struggling with what should be put out this year for the voters to approve. I say that so there will be an understanding that there may be more questions and there may need to be a little more discussion.”

NewPage announced in December that it had completed financial restructuring and emerged from Chapter 11 bankruptcy protection.

NewPage announced Feb. 19 that it would be cutting all non-personnel discretionary operating costs by 5 percent and personnel by about 300 positions across all mills and corporate offices in response to a decline in demand for the paper it manufactures. For the Rumford mill, that meant laying off 45 hourly positions and $2 million in cost elimination.

According to Lyons, in 2009, the Rumford mill had to eliminate 130 jobs after a 10 percent reduction in the BETR reimbursements.

mdaigle@sunjournal.com

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Comments

Tony Capola's picture

NewPage

The writing is on the wall. Rumford, our little one-horse town, is relaying on a horse that’s now on life-support. Let’s hope that the current budget process can manage to control spending better than what’s been done in the past. Excessive spending will not get the job done. Neither will small ‘adjustments’ in departmental requests and initiated articles need to be dismissed out-of-hand. It’s time to get out the meat-axe! The situation in Augusta only makes our very bad situation more critical than ever before. For the moment there is only one solution; REDUCE SPENDING.

 's picture

Ironic

It seems rather ironic after reading this article, that I turned on the TV this a.m. and there was a documentary about the demise of the paper industry in Berlin and Gorham NH airing on our local channel 7.

Frank and Mark have been preaching about the possibilities of the mill closing for a long time, after reading this article, I believe the writing is on the wall.

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