Maine is trying to cope with the challenges posed by decreased property tax revenues in the aftermath of five paper mill closures in just two years.
One major challenge for affected communities is keeping property taxes in check. But some communities choose to see the loss of a paper mill as an opportunity to reinvent themselves.
Earlier this week, members of the Old Town City Council started to grapple with a problem familiar to papermaking towns these days: What do you do when a big industrial taxpayer like Expera Specialty Solutions shutters its doors and hundreds of thousands of dollars in local tax revenue disappear?
“Whenever a mill closes a big company like that everybody does get a little nervous and to see what’s going to happen in the future,” says Old Town Mayor David Mahan.
Mahan says the closure of the former Old Town Fuel and Fiber pulp mill will result in a property tax increase of around three percent this year after some of the town’s contingency funds are applied to offset the loss of revenue. By applying those funds and incorporating a little belt-tightening, he says the town’s mill rate of about $21 per $1,000 of valuation should remain relatively stable.
But then again, Mahan says Old Town is a little different than other former papermaking towns.
“We have a lot of big businesses that are here in Old Town, so we’ve been down this road before with the mill and we’ve always been able to stay above water just because we are very diverse in the tax area and I feel very comfortable that we’re going to be fine going forward,” he says.
At the Maine Municipal Association, Geoff Herman has become well-versed in the problems facing communities such as Bucksport, Lincoln, Millinocket, East Millinocket and most recently Madison, which have experienced huge tax revenue losses when the mills shut down. He says having some lead time and a plan to prepare for such a contingency are key factors in recovering a more stable tax base, but he says all Maine towns are different and that most of them have to play the cards they’re dealt.
“I do think you’re going to see differences in the starkness of the impact,” Herman said. “Bucksport’s a good example. It has more dimensions to it with respect to its commercial base and its commercial potential than maybe a Millinocket has.”
And in Millinocket, a community that may be Maine’s ground zero experience for weathering a mill closure, Richard Angotti says his town remains locked in a struggle for survival. Since Great Northern Paper collapsed in 2014, he says the town has been doing everything possible to hold the mill rate below $30 per $1,000. It’s currently $29.87, more than double the state average.
“Last year we took and we defunded the library, we got rid of one half-time employee in the town office and that was the only way we could keep the mill rate under $30,” Angotti says.
“The obvious point to come out of this is that this is what happens when you put all your eggs in one basket,” says Mark Scally, first selectman in neighboring East Millinocket.
Scally says there was also a fair amount of anxiety when Great Northern closed, but he says his community had tried to prepare by cutting municipal costs through personnel reductions and expanding a regional ambulance service that now generates enough revenue to help offset most of the costs of the town’s fire department.