JAY — Selectpersons on Tuesday set a tax rate for 2016 that will mean an increase of $241 on property valued at $100,000.

The rate of $21.10 per $1,000 of valuation is $3.85 higher than last year’s rate.

Selectpersons Tom Goding, Vice Chairman Tim DeMillo and Chairman Terry Bergeron voted in favor of the measure while Selectpersons Keith Cornelio and Judy Diaz opposed it.

The town will have an overlay of $140,201, according to assessing agent Paul Binette’s information.

The mill rate increase means taxes on a house valued at $100,000 will be $1,793.50 after factoring in a $15,000 Homestead Exemption, Binette said.

The 2015 Homestead Exemption was $10,000. Next year, it will rise to $20,000.

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Binette offered five options on the tax rate, ranging from $20.75 using $100,000 from the undesignated fund balance to offset the increase and four options that didn’t factor in undesignated funds.

Those options ranged from $20.90 to $21.25. 

Diaz said she had received many phone calls about people having to make a lot of cuts. She favored the option of setting the tax rate at $20.90.

The overlay with that option is $17,000, DeMillo said, and with everything that has been going on, he considered it too low. 

A contracted appraisal of the Verso Androscoggin Mill and associated equipment in 2015 was $512.5 million. An appraisal this year set the value of the property at $357.9 million, a decrease of $154.6 million, Binette said.

The amount does not factor in any equipment or environmental exemptions.

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The reduced value reflects Verso shutting down a paper machine, a pulp dryer and the ground wood operation last year, he said.

The town will be filing its second application to the state tax assessor for an adjustment to the municipal valuation because of the sudden and severe loss of valuation. It is expected to result in additional subsidy in education funding and increased municipal revenue-sharing.

In June, the state approved the town’s application for a sudden and severe loss of valuation, and effectively reduced the town’s state valuation by $142.35 million for 2013, 2014, 2015 and 2016.

That resulted in Jay getting about $1 million more in education subsidy to offset its share of the Regional School Unit 73 budget. Last year, Jay appropriated $8.97 million for education, and this year, it is $7.96 million, Binette said.

The total valuation base for the town last year was $883.3 million. This year, the base is $620.3 million.

The declining value of the Verso Androscoggin paper mill and associated properties, along with a  settlement agreement reached in April in a tax dispute between Verso and the town, are contributing factors to the higher rate.

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Selectpersons agreed to give Verso a credit of $4 million over the next three tax years in six credits to settle tax disputes for 2013, 2014 and 2015.

The board also agreed to credit to Verso an amount that is sufficient to reduce Verso’s gross tax liability payment to the town, calculated before tax-increment financing payments and business equipment tax reimbursements, to $6.75 million for April 1, 2016 property tax year.

The $21.10 tax rate reduces Verso’s gross tax liability payment to $6.61 million for this year, according to Binette’s information. 

Jay’s share of Franklin County taxes next year will be affected by the reduction in the town’s valuation, Town Manager Shiloh LaFreniere said. 

Though the town lost a lot of value, the town’s county taxes rose because the county uses the state’s valuation, which is two years behind, Binette said. 

When the town receives a sudden and severe valuation adjustment, it does not affect county taxes, LaFreniere said. 

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Last year, the town paid $938,282 in county taxes. This year, the payment is about $1 million.

The town cut spending and reduced its municipal appropriation to $5.27 million this year, compared to $5.63 million in 2015-16.

Tax bills will be mailed out next week. The first half is due Oct. 3 with the second half due on April 3, 2017.

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