A bill that would ensure that communities such as Madison and Skowhegan don’t lose out on state revenue sharing and school funding money this year in the wake of recent mill devaluations was approved by the Legislature’s taxation committee on Thursday.

The bill, L.D. 281, sponsored by House Majority Leader Jeff McCabe, D-Skowhegan, proposes that the most recent valuations for Madison, Skowhegan, East Millinocket and Jay be used to calculate the state money for the communities this year, according to a news release from the House Democratic Office. Under the current law, it takes three years for the state to recognize municipal valuation.

The bill was endorsed by the taxation committee by a 5-3 vote and now goes to the House.

“Mill towns around the state will take serious hits if we do not solve this problem,” McCabe said in the release. “Our communities should not lose out on state funds for our towns and schools just because the state is using outdated figures in its calculations.”

The bill originally addressed the recent valuation decreases at Madison Paper Industries in Madison and Sappi Fine Paper in Skowhegan. The Madison Paper mill dropped in value by about $150 million in August, while the Skowhegan mill had lost about $100 million in value.

The bill later was amended to include East Millinocket, where the value of Great Northern Paper fell by $21.9 million, and Jay, where the value of Verso Paper Co. fell more than $200 million in the last year, according to the release.

“Communities across rural Maine are hurting because of the weakness in the market for printed paper products,” said Rep. Stephen Stanley, D-Medway, a member of the taxation committee. “This common-sense legislation ensures fair treatment in state aid calculations. It protects local schools and property taxpayers by providing some predictability and stability for towns grappling with economic forces beyond their control.”

McCabe also is sponsoring L.D. 282, a bill that would amend permanently the formula the state uses to calculate school funding for communities that have a tax value drop of greater than 2 percent in a year. The drop in value at Madison Paper represents about a 30 percent loss in property value in the town and already has resulted in an 11 percent tax increase.

L.D. 282 still is being considered by the committee and has been opposed by the Department of Education, which submitted a letter to the committee saying the bill would require a major redistribution of state subsidies.

At a public hearing before the committee in February, several town leaders from Madison, Skowhegan and Jay testified in favor of the bills.

“When a town suffers a major valuation loss, the effects are dramatic and they stay for quite a while,” said William Van Tuinen, a tax assessor in both Madison and Skowhegan, at the February hearing. “It would be very helpful for the towns affected by that kind of valuation loss to have that change reflected sooner rather than later.”

Cosponsors of L.D. 281 include Sen. Rodney Whittemore and Reps. Larry Dunphy, R-Embden, Brad Farrin, R-Norridgewock, John Picchiotti, R-Fairfield, Stanley Short, U-Pittsfield, Thomas Skolfield, R-Weld, and Joel Stetkis, R-Canaan.

Rachel Ohm — 612-2368

rohm@centralmaine.com

Twitter: @rachel_ohm