The Maine Supreme Judicial Court on Thursday ruled against Somerset County, stating the now-defunct Maine Board of Corrections had the authority to withhold state money from the county that had taken in more in federal funds than expected and used it to pay off debt incurred in building a new jail in East Madison instead of giving it to the Board of Corrections.

In a 4-1 decision released Thursday, the court ruled that the Board of Corrections, which oversaw the state’s consolidated jail system from 2008 until it was disbanded last year, was not in error when in 2013 it refused to give the county its third-quarter payment from the State Investment Fund, an account used to offset county taxes used to pay the jail.

It wasn’t immediately clear Thursday how or if the ruling would affect the county jail.

A superior court ruling in 2014 said that Somerset County was allowed to use surplus money it took in for housing federal prisoners at the jail to pay its own debt without approval from the corrections board, which oversaw its budget.

But Thursday’s court decision vacates that ruling. Writing for the majority in a 24-page decision, Justice Jeffrey Hjelm said that the corrections board had the statutory authority over Somerset County’s jail budget and was allowed to amend it.

The overall statutory structure that governed the state’s coordinated corrections system “reveals the legislature’s intent to vest the Board with a comprehensive level of control over the finances of county jails,” Hjelm wrote.

Somerset County, Hjelm wrote, “created a unique situation because it diverted correctional funds that, if used in a way that was within statutory parameters, would have reduced its need for payments from the State Investment Fund. Regardless of whether the board properly decided to make State Investment Fund disbursements to other counties, we conclude that the Board acted within its authority when it took action affecting the disbursement otherwise due to Somerset County,” Hjelm wrote.

Because the Board of Corrections no longer exists, it was replaced by the state Department of Corrections for the ruling.

The board refused to make the approximately $280,000 payment because it argued that Somerset County had taken in more money than it expected from housing federal prisoners in the jail that year, and that money should have been handed over to the board to help pay the cost of the state’s jail system, which was facing a deficit of up to $1 million.

Somerset County sued the board over the payment, arguing that it was entitled to receive a third quarter payment because it was entitled to use the federal revenue it received to pay down debt on the jail construction and put money in a capital improvement account.

Somerset County borrowed $30 million to build the jail in 2008 and pays $2.55 million a year to service the 20-year bond.

According to the ruling, in fiscal year 2013, the corrections board approved a $6.8 million budget for the Somerset County Jail. About $4.8 million was to come from local taxes and $1.1 million from the state fund with almost $451,000 budgeted for revenue from housing federal inmates.

But by the second quarter of 2013, the jail had taken in more than $660,000 in federal boarding revenue, and county commissioners voted to apply the surplus to its debt and a capital improvement fund without seeking approval from the corrections board, triggering the decision to withhold state funding.

In the decision, Hjelm said that the county’s argument that the corrections board did not have control over how it used federal revenue was undermined by the fact that it included the money in the original 2013 budget it submitted to the board for approval.

“This plainly demonstrates that, contrary to its present assumption, the county itself treated federal boarding revenue as a funding source controlled by the board,” Hjelm wrote.

But in a dissenting opinion, Associate Justice Andrew Mead said that Somerset County built its jail before the creation of the board of corrections with the “clear intent” to recoup construction costs by housing federal inmates and the boarding capabilities of the jail “create a quasi-proprietary income-generating mechanism for the county.”

“Through the approach it took, the Board of Corrections overstepped its statutory authority and effectively appropriated these proprietary boarding fees,” Mead wrote.

“For all its forward thinking and planning, Somerset County’s reward was to have its earmarked debt-reduction funds diverted and replaced with the Board’s disheartening suggestion that it seek debt reduction funds through yet another tax on the residents of Somerset County,” Mead added.

Peter McGuire — 861-9239

[email protected]

Twitter: @PeteL_McGuire

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