MADISON — The Madison Board of Assessors Monday approved a tax increase of more than 7 percent, but because of changes in a statewide property tax exemption program, some homeowners may be looking at smaller increases in their tax bills.

The tax rate for 2015 was $19.50 per $1,000 of assessed valuation. The tax rate for 2016 will be $21 per $1,000 of assessed valuation.

Complicating this year’s rate was the closure of Madison Paper Industries. The company announced in mid-March that it would cease operations.

“Residents have done a really good job of recognizing that life in Madison is not what it was when Madison Paper was humming,” said Assessor Jack Ducharme. “They’ve done a really good job of recognizing that we just don’t have the money.”

Russ Drechsel, president and CEO of Madison Paper, said last week that the company is continuing to go through the sales process and would not comment when asked whether a specific buyer had been identified for the mill.

The mill’s valuation has dropped by about $8 million since the closure was announced, and it is currently valued at $72,362,681. Specialty Minerals Inc., a company that produces chemicals for the paper-making process and was located at the site of Madison Paper, also has seen a loss in value of about 82 percent, from more than $2 million down to $524,233. The facility was not re-assessed at the time that Madison Paper was in 2014 but requested a revaluation after the mill closed.

At the same time, a statewide expansion of Maine’s homestead exemption program, which allows homeowners to claim $15,000 of property value as tax-exempt, has also contributed to an overall loss of valuation in Madison, but officials said Monday it will also help some homeowners weather the tax increase. The program previously allowed homeowners to claim up to $10,000 as exempt and is scheduled to increase to $20,000 in 2017.

Assessor Paul Fortin said during the meeting that he was “concerned about someone not paying their taxes,” but would not say when asked afterward if he was referring to Madison Paper.

Fortin and Chairman of the Board of Assessors Al Veneziano did say that it “is always a concern” that the mill will either not pay taxes or will request an abatement.

Without knowing whether the mill will be sold and re-developed or scrapped, assessors said Monday that it is hard to tell what the long-term effect of the closure will be on taxpayers, Veneziano said.

“It’s always stressful coming up with a tax rate,” he said. “Our real concern is for the former employees who are trying to get back on their feet. When it comes to setting the tax rate, it’s something we just have to deal with as we go.”

After the value of Madison Paper dropped by about $150 million in 2014, the town established a $2.5 million line of credit. The credit line has not been used to date, and Veneziano said Monday that’s a good thing.

Other assessors also stressed that they want to refrain from borrowing money if possible, and it would be better to set a slightly higher tax rate than to have to come back to taxpayers asking for money to pay off the line of credit.

Charlie Potratz, a property owner in Madison and the sole attendee of Monday’s meeting who was not a town official, said after the meeting that he felt the new tax rate was “decent based on the situation of the town.”

In the two years since the tax value of Madison Paper declined by $150 million, the town also has reduced its budget from over $3 million annually to $2.64 million.

“I don’t think anybody is happy (about a tax increase),” Fortin said. “But imagine where we’d be if we were still running the town on a $3 million budget as opposed to $2.6 (million).”

Rachel Ohm — 612-2368

[email protected]

Twitter: @rachel_ohm

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