LEWISTON — The city’s property tax rate has been reduced due to $100 million in new valuation from the New England Clean Energy Connect project.

City officials gathered Tuesday morning to announce the tax rate drop, which comes after a contentious budget season marked by debates over Lewiston’s high tax rate and overdue revaluation.

Mayor Mark Cayer said the news, which will lower the tax rate by 41 cents, means Lewiston “is turning a corner” in its economic recovery that has lagged since the recession in the late 2000s.

According to City Assessor William Healey, the $100 million increase in valuation is the largest in a single year since 2006, when the Walmart distribution center came online. That was a $76 million increase.

While city staff was aware that construction had begun on Central Maine Power’s upgrades in Lewiston tied to the NECEC project, Healey said they did not expect the value of that work to have reached this level yet. In all, the project, which includes a new converter station and two upgraded sections of transmission line, is expected to produce $200 million in valuation for the city.

“You can’t overstate the significance of the valuation increase,” Healey said during Tuesday’s news conference.

During prepared remarks, Cayer said the tax relief will give elected officials the opportunity to “work together to restore needed municipal services and education funding.”

“And we can do this while providing meaningful tax relief to our residents,” he said.

Heading into the coming fiscal year on July 1, the tax rate was slated to jump to $29.67 per $1,000 of assessed valuation, an increase of about $1 over this year. However, the announcement Tuesday means the rate will instead fall by 41 cents to $28.26.

During budget deliberations, several officials, including Cayer, argued that hitting a $30 property tax rate would be devastating for economic development, while others pushed the city to speed up its timeline for conducting a citywide revaluation.

Lewiston has not conducted a full revaluation since 1988, and the city now values homes at about 76% of their full market value. City finance staff has said that if Lewiston properties were assessed at “full value,” the tax rate would be about $24.35.

Finance Director Heather Hunter said the total valuation increase this year is $111 million. She said the City Council and School Committee should be “commended” for staving off further increases during budget discussions.

During the news conference, School Committee Chairwoman Megan Parks said this year’s school budget, which was ultimately trimmed to reduce the tax rate increase, was hard for many committee members to accept.

She said there were concerns for hitting a financial cliff over the next few years, but said the increased valuation and decreased tax rate “will reduce the likelihood of a financial drop-off.”

“Regardless of anyone’s opinion on the CMP project, from an education standpoint, the impact these funds will have is a huge blessing to our city and schools,” Parks said.

Cayer also used Tuesday’s conference to express support for the NECEC project, which he said will reduce fossil fuel use. The transmission line underway is planned to bring hydropower from Quebec into the New England power grid, but has been controversial since the start.

Cayer said that like many in Lewiston, he lives “paycheck to paycheck,” and said “CMP has given many small businesses a boost to their bottom line during a time of uncertainty.”

Following comments from other staff and officials, Cayer came back to podium to discuss concerns he has over LD 1708, proposed legislation that would replace Central Maine Power and Versant with a locally-controlled utility.

He said while CMP could have served Lewiston and the rest of the state, “better in areas like customer service and its billing practices,” he argued the proposed legislation would amount to a “government takeover.”

In an earlier news release, Cayer said if passed, “the legislation will dramatically — and negatively — impact every resident, taxpayer and business in this state.”

Stephanie Clifford, campaign manager for Our Power, said in a news release Tuesday that CMP is “dreaming up baseless scare tactics and spreading their falsehoods to scare well-intentioned Mainers.”

Legislators could take action on LD 1708 on Wednesday, but it is not clear whether they will.

Last week, the state Senate voted 18-17 against the measure after two senators, including Auburn’s Ned Claxton, a Democrat, switched their vote on the bill from yes to no. The House approved it.

Proponents of the bill are pushing for the Senate to reconsider, targeting in particular Claxton and David Woodsome, a North Waterboro Republican.

If it is passed, it would go next to Gov. Janet Mills, whose administration has expressed skepticism about the proposal.

Cayer, who announced last week that he does not plan to run for re-election in November, said Lewiston is moving in a positive direction.

“As the pandemic has receded, we have recently seen some small but positive steps in our recovery,” he said. “Private sector investments in jobs and housing are coming back. We are seeing young entrepreneurs emerging; our arts scene is ramping up again; specialty locally owned restaurants are expanding; and our largest employers are again investing in our community.”

Staff Writer Steve Collins also contributed to this report. 

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Photo: Pilgrimage through Auburn, Lewiston