JAY — A legislative bill that would reimburse the town $600,000 it lost in state revenue-sharing due to a drop in valuation of the Androscoggin paper mill has been approved by the House of Representatives and the Senate.

It will move to the Legislature’s Appropriations Committee to be considered for funding, Town Manager Shiloh LaFreniere said.

LaFreniere said she was told by an aide to state Rep. Sheila Lyman of Livermore Falls, who represents Jay, that the bill was approved by the lawmakers in the House and Senate this week.

After a digester explosion at the mill in 2020, town leaders used $2.25 million in undesignated funds in 2021 to keep the property tax rate from rising by $8.80 per $1,000 of assessed value. However, they didn’t realize it would mean a $600,000 reduction in state revenue-sharing this year.

The tax rate still increased by $3 per $1,000 of valuation in 2021.

“We learned that making use of the undesignated balance — the town’s savings — to help stabilize the tax rate for residents in years when there were big valuation losses actually hurt the town financially,” LaFreniere previously said.

Lyman sponsored the bill to reimburse Jay for the property tax loss.

Sen. Lisa Keim, R-Dixfield, who also represents Jay, sponsored a bill that will fix the state Adjustment for Sudden and Severe Disruption of Valuation law for the long term. The latter bill has been carried over to the next session, LaFreniere said.

The town has filed for the state’s Adjustment for Sudden and Severe Disruption in Valuation four times. The last time was in 2021, and it will again because the mill closed permanently this year.

One of two wood pulp digesters in the mill exploded April 15, 2020, leading Pixelle Specialty Solutions to permanently idle one paper machine, lay off workers and cease making wood pulp. Pixelle had continued to operate two specialty paper machines using purchased pulp until March when it shut down permanently.

The valuation program, if a town qualifies, affects the amount of money the town receives in state aid to education and state revenue-sharing.

When state revenue-sharing projections were made earlier this year, Jay officials and an assessing agent were surprised to see that its projected amount had dropped from last year, she said.

LaFreniere and the town’s assessing agent, Paul Binette, asked several questions of Maine Revenue Services and the state treasurer’s office about how the formula works and what numbers play into it.

Last year, the town was projected to receive $1.4 million in revenue-sharing, she said. This year it is projected to be $1.1 million.

Had town officials not used the money from the undesignated fund balance in the 2021-22 tax commitment, the town’s projected revenue-sharing would be $1.7 million, she previously said.

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