Amended state law helps municipalities with sudden and severe drop in valuation
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Apr. 30—JAY — Gov. Janet Mills signed an emergency bill last month that will not cut state revenue-sharing for towns and cities that use undesignated funds to cover a reduction in state valuation.
The measure creates a long-term fix for the Sudden and Severe Disruption of Municipal Valuation law.
Jay used $2.25 million from its undesignated fund in 2021-22 to stabilize taxes after a digester blew up April 15, 2020, at the former Pixelle Specialty Solutions Androscoggin Mill.
In 2022-23 the town was projected to receive $1.4 million in state revenue-sharing, Jay Town Manager Shiloh LaFreniere said.
Revenue-sharing for 2023-24 was projected at $1.1 million.
Had the town not used its undesignated fund balance in the 2021-22 tax commitment, the town's projected revenue-sharing would have been $1.7 million. The tax rate went up by $3 per $1,000.
LD 2006, which was carried over from last year, provides that the "amount of money that a municipality that qualifies for an adjustment for sudden and severe disruption of valuation uses from undesignated fund balances does not reduce the amount of money that a municipality receives in state municipal revenue-sharing."
Town leaders applied in 2023-24 for its fifth reduction in valuation through the state program. The state notified the town in November that Jay's valuation would be lowered because of the Androscoggin Mill closing.
"This amendment to the law will assure that when the state looks back on this year to figure revenue-sharing the town of Jay will not be penalized the way it was previously," LaFreniere said.
Rep. Sheila Wyman, R-Livermore Falls, and other legislators submitted a bill last year that would have given Jay its $600,000 property tax loss. It failed and Jay did not recoup its money.
The town used $1.5 million from its undesignated fund in August 2023 to stabilize the tax rate.
Sen. Lisa Keim, R-Dixfield sponsored LD 2006 with other legislators to make the adjustment so towns that fall into the same circumstances of a municipal valuation disruption will not be penalized.
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