JAY — Selectpersons voted 4-1 Tuesday to set the tax rate for 2014-15 at $15.75 per $1,000 of property valuation. It is an increase of $1.75 over last year’s rate.

It means taxes on a $100,000 house will increase by $175, not factoring in homestead exemptions.

Chairman Steve McCourt opposed the vote. His motion to set the rate at $15.60 died for lack of a second.

Assessing agent Paul Binette offered selectpersons three tax rate options. The third option was $15.70. The lowest rate possible was $15.33 and the maximum was $16.09.

The higher rate factors in $750,000 from the town’s undesignated fund.

The town will also have a $387,127.92 overlay to help with any abatements that are granted.

The higher rate is attributed to Verso Paper Corp.’s paper mill and property decreasing from $815.4 million of taxable value last year to about $592 million this year. It is about a 27 percent decrease, Binette said.

Verso is expected to pay 64 percent of the taxes in town, down 5 percent from last year.

The town’s valuation dropped by 22 percent to $922.22 million, Binette said.

The town’s spending decreased by 14 percent from last year, to $13.88 million this year.

Town Manager Shiloh LaFreniere said the new rate is based on the best information the town has now.

Binette was receiving information from the town’s revaluation consultants until just before Tuesday’s special selectpersons meeting.

The town began a revaluation earlier this year on the mill properties after Verso Androscoggin LLC requested a tax abatement in February for $469 million in valuation for 2013. The town valued the mill and property at $929 million in 2013. The town has until Dec. 1 to make a decision on the abatement request.

The town taxed Verso $9 million last year, factoring in two tax-increment financing agreements. This year, after factoring in the agreements, the taxes would be about $8.47 million.

Assessing agents also conducted a revaluation of other property in town and valuations also dropped for the most part.

Taxpayers transferred $425,000 from the town’s undesignated fund earlier this year to have the two revaluations done. That dropped the fund down to $5.7 million and without having the final audit, LaFreniere estimated it would be more than $6 million now before the $750,000 was taken to reduce the tax rate.

The town needs to keep about three months worth of money on hand to pay the town’s bills in case something catastrophic happens. That equals about $3.7 million, she said.

LaFreniere said there may be some adjustments to the mill’s valuation but they would not be significant adjustments.

“Enough information regarding the mill’s valuation has been developed during the appraisal process for us to move forward with the tax commitment at our special selectmen’s meeting this evening,” she said. “Given the time constraints of the tax assessment process, we view this approach as our best available option and plan to finalize the 2014-15 tax commitment tonight.”

Tax bills are expected to be sent out next week, she said. The first half is due Oct. 1 and the second half April 1, 2015.

Department heads, selectpersons and the Budget Committee worked hard this year to bring in a budget of $5.5 million, which was $501,341.93 less than last year’s budget, knowing the mill’s valuation could drop, McCourt said.

“Everybody worked hard. We are down to bare bones,” McCourt said.

When budget season rolls around next year, he said he hoped to see more residents become involved to let the board and the Budget Committee know what services they want to keep and what they can do without.

Selectperson Tim DeMillo said the town has not had a lot of input into the RSU 73 school budget but it has been stressed to the new administration that the school budget also needs to be looked at for reductions.

“We are the biggest taxpayer in (Franklin County),” he said, and county officials need to think about cutting back its budget as well.

He also pointed out that with Verso and NewPage Holdings Inc. ready to sign an agreement to have Verso acquire seven of NewPage’s mills, including one in Rumford, there is no guarantee the Jay mill will still be there next year.

To be in a better position to move the town forward, DeMillo, a Jay businessman, said, as much as it hurts him and everybody else, he motioned for the tax rate to be set at $15.75. The majority of the selectpersons agreed.

dperry@sunjournal.com