OXFORD — Could the town of Oxford survive without the tax revenues it receives from big players like the Oxford Casino or Walmart?
Yes, says Chris Backman, principal at the accounting firm of RHR Smith & Company of Buxton.
The Oxford Casino and other large businesses such as Walmart may provide millions of dollars in revenue to the town of Oxford each year, but in terms of its tax base, the town is not economically dependent on any one taxpayer to keep its operations afloat, Backman told the Advertiser Democrat on Tuesday, April 25.
“It’s a very evenly distributed tax base,” Backman said. “When you look at the town as a whole they’re not big players as far as tax base goes.”
Economic dependency disclosure is a part of the annual auditing process of things that must be divulged during an audit such as excise taxes collected, bonds and outstanding debt. Economic dependency is one of those disclosures, said Backman.
Backman met with the Board of Selectmen at its Thursday, April 20 meeting to review the fiscal 2016 financial audit. As part of that review he noted there was no economic dependency disclosure necessary for the town of Oxford.
Backman said that while the Oxford Casino and other large companies such as the Hampton Inn and Walmart may contribute heavily to the town, in terms of the tax base and other financial contributions, no one taxpayer is valuable enough to cause financial havoc should they leave town.
Economic dependency means the taxes paid by a taxpayer is significant (10, 12, 15 percent or more) in terms of the entire town’s tax base, explained Backman.
According to information from Interim Town Manager and Finance Clerk Becky Lippincott, the largest taxpayer BB Development LLC (Oxford Casino) was less than 5 percent (4.95 percent) of the town’s total tax bill calculated valuation, therefore there was no need to claim economic dependency in the fiscal 2016 audit.
The Oxford Casino, at 777 Casino Way, paid $274,606 for its 96.5 acres assessed at $1,698,300 and its building that is valued at $19,117,200, according to a tax records search on the TRIO billing system for the town of Oxford.
Lippincott said the real estate taxes for the Casino are 100 percent TIF (tax increment financing) money and goes to the Wastewater Treatment Facility.
The net revenues from the Casino – which in 2016 was $1,297,129 in slot revenues and $312,757 in table revenues – is used to lower the mil rate. Those revenues come from a formula created by state legislation when the Oxford Casino was approved.
Last year, the Walmart Real Estate Business Trust in Arkansas paid the town $151,833 for its Walmart property at 1240 Main St. that includes 35 acres assessed at $1,037,400 and the building assessed at $1,046,510.
Walmart taxes are only 2.65 percent of the total tax base.
In Oxford, some of the top real estate valuations in addition to BB Development (Oxford Casino) and Walmart, are several properties owned by Robert Bahre, Central Maine Power, Hannaford Brothers Co., RJF (Keiser Real Estate), GIRI (Hampton Inn), and TM Land LLC.
Financially impressive together, alone none constitute economic dependency for Oxford.
Economic dependency
So if a business like the Oxford Casino or Walmart doesn’t constitute economic dependency for Oxford, what does it take?
In Maine, a mill town is a good example, said Backman.
Wiscasset is an example of what can happen when a large tax base the town depends on disappears, said Backman.
In 2013, the Boston Globe looked at the ramifications for the town of Wiscassett, a small coastal town of some 3,700 located north of Portland, 17 years after Maine Yankee abruptly dismantled its reactors and laid off some 600 workers.
In its report, the Globe found property taxes spiked by more than 10 times for the town’s residents, the number of residents living in poverty had more than doubled as many professionals left and town services and jobs were cut.
The plant had paid for 96 percent of the town’s budget until 1996. By 2013 it remained the largest payer of property taxes – but only providing about 10 percent of the town’s $10 million budget.
The town was unprepared.
But unlike Wiscasset, Backman said towns like Bucksport, which relied heavily on property taxes from the Verso Paper Mill for its operating budget, have been able to weather the loss because of preplanning.
“When you look at Bucksport and you look at Rumford with one tax base, then you start getting into what, ‘Are we going to do [if the mill leaves]?’” said Backman. Prior town managers in Bucksport put aside money to prepare for that day.
Verso Paper in Bucksport shut its mill down in 2015, laying off 570 people. Demolition of the 250-acre, riverfront site is currently underway and plans for its reuse are being discussed, but according to published reports town officials say the town is moving ahead and looking to diversify its downtown economic base rather than rely on one industry as it had for almost a century.
While Backman agrees that the benefit of having a large company like the Oxford Casino, which is the largest employers in Oxford, or Walmart, which contributes heavily to the Oxford Hills, strictly speaking, Oxford could keep functioning without either.
“It’s a lot of money, but it’s not taxes,” said Backman. Revenue and the contributions is not part of economic dependency discussion, he said.
“They certainly contribute outside of the the tax base, that’s the key,” he said. Each has its own business model and each operates on a different business model and they contribute in their own way.
“That’s the economic dependence I don’t think this town needs to be concerned with,” said Backman.
ldixon@sunmediagroup.net
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