The town of Jay and paper maker Verso Corp. have reached a deal resolving a dispute over property tax assessment for the Androscoggin Mill, even as residents went to the polls to vote on a $5.2 municipal budget and the town’s share of the school budget.

The deal, which gives the mill six tax credits worth $4 million stretching through the 2020 tax year, does not figure into the budget being voted on Tuesday. The town also agreed to reduce the mill’s tax liability in decreasing amounts over the next three years, from $6.25 million in the tax year ending April 2017 to $4.75 million in 2020.

Verso paper, which owns the Androscoggin Mill in Jay, has reached a settlement with the town on a request for tax abatements and reduction of its tax assessments. Staff file photo by Michael G. Seamans

Related Headlines

• Jay opposes Verso Corp. request to move tax dispute to federal court
• Verso asks to move dispute with town of Jay to federal court

Read the tax agreement

Town Manager Shiloh LaFreniere said the effect on the budget being voted on Tuesday, as well as the $6.2 million Franklin County budget, isn’t known. “We’re going to have to review it as more information becomes available,” she said.

Jay selectmen approved the settlement with Verso on Monday night, citing the “expense, time and risk to both the town and Verso,” LaFreniere said.

Under the agreement, Verso’s tax liability will be reduced to “more accurately reflect the assessed value of the mill property,” according to a joint news release from the company and the town.

“Verso has agreed to withdraw its pending property tax appeals, and not to seek further abatements of taxes absent material changes to the mill property or operations,” the company said in the release Monday night. “This agreement is intended to allow both parties to achieve sustainable operations over the coming years based on changing circumstances concerning the mill’s taxable value.”

The deal still is subject to approval by the federal bankruptcy court overseeing the mill’s bankruptcy proceedings.

Verso, which owns the Androscoggin Mill in Jay, filed for bankruptcy in January and has had three pending abatement requests with the town. In total, the company has asked for a refund of $11.4 million in taxes from 2013, 2014 and 2015. The town had agreed to a partial abatement request of $886,157 of the company’s 2015 taxes.

The tax dispute followed layoffs at the Jay mill of about 300 people. The company, which owns eight paper mills around the country, announced plans recently to close one of its mills in Wickliffe, Kentucky, which is not expected to affect operations at the Jay mill.

The deal comes two weeks after the town filed a court motion contesting Verso’s bid that to have its pending tax abatement requests moved to federal court in Delaware, instead of in Maine, as it goes through bankruptcy proceedings.

The six credits, worth $666,667 each and in addition to the previous abatements given the mill, will be taken against each of the next six payment dates for the next three town tax bills, starting in October and then each April and October, until April 2019.

The town also set the mill’s tax liability at $6.75 million for this property tax year; $6.25 million for 2017; $5.75 million 2018; $5.25 million for 2019; and $4.75 million for 2020.

Polls were open until 8 p.m. Tuesday on both the town budget and the Regional School Unit 73 $18.8 million budget. RSU 73, the Spruce Mountain district, includes Jay, Livermore and Livermore Falls.

The town budget is a pared-down $368,434 reduction from last year’s. It reduced the town office staff, and reflects cuts in almost every town department. Before the Verso agreement, the town anticipated $1.38 million in revenue and the town would have had to come up with $3.88 million in taxes.

Related Stories