SKOWHEGAN — Skowhegan taxpayers, especially older residents on fixed incomes, will enjoy a drop in taxes this year, the town manager said Friday.

The town’s tax rate has dropped 9 percent in the new assessment because Skowhegan’s shares in school spending and Somerset County taxes are lower. The drop also is a result of a reimbursement of sheltered taxes under the state’s Business Equipment Tax Exemption program from the $200 million paper machine rebuild at the Sappi North America paper mill unveiled just this week.

Town Manager Christine Almand said Friday the new tax rate is $18.20 for every $1,000 in property valuation, down from $20 last year.

The new tax rate means that a home valued at $150,000 would be taxed $2,730. Last year the same home was taxed $3,000.

Tax bills are scheduled to go out next week.

“It’s a 9 percent reduction in the mil rate, and I would say that’s attributed to multiple factors,” Almand said Friday afternoon. “Going into Town Meeting, I knew we were going to see a drop based on the fact that our share of the school and county bills has gone down.”

The county tax share dropped by $140,000 for the year and the school share is down about $255,000.

“A lower mil rate is good news for Skowhegan taxpayers,” Almand said. “Certainly there are segments of our citizens that are living on a fixed income, and I think that this is good news for them.”

The town lowered the value of the Sappi mill three years ago in a negotiated settlement with the owners, which led to the lower county and school bills.

“That’s finally filtering into the formulas,” Almand said. “It takes a long time for a large change like that to impact our share of the schools and county.”

The agreement with the paper company states that the value for taxation cannot exceed $380 million. Given depreciation at the mill last year, the property was assessed at $371 million.

This year Sappi is assessed at $344 million and will pay $6.26 million in taxes.

The tax rate in Skowhegan increased in 2017 from $19.04 for every $1,000 of assessed property value to $20.

Almand said another part of the reason that the tax rate went down is the BETE program as it relates to most of the new personal property valued at $200 million at Sappi, which is exempt from taxation under state law. The BETE program is a 100 percent property tax exemption program for eligible property that would have been first subject to tax in Maine on or after April 1, 2008.

“Sappi does not cut us a check for taxes on that value,” Almand said. “What happens is, because that is exempt through the BETE program, the state has to reimburse us for some of that value.”

The increased BETE reimbursement to the town as revenue is about $1.63 million because of the investments at the Sappi mill. The total BETE payment to the town this year is $3.667 million, according to Almand.

She said Skowhegan taxpayers are invited to join the town’s tax club, which breaks tax payments down from two payments a year to eight payments. The deadline for joining the tax club is Oct. 29.

Doug Harlow — 612-2367

[email protected]

Twitter:@Doug_Harlow

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