April 07, 2020

Dragon tax case on back burner > CMP dispute halts Thomaston review

THOMASTON — The effort to settle the $1 million tax assessment question between the town and Dragon Cement Co. has been derailed by the biggest tax dispute in state history, with an assist from the biggest ice storm in state history.

Hearings to settle the tax assessment of the cement plant were scheduled for Tuesday and Wednesday before the Maine Board of Property Tax Review. Town Attorney Paul Gibbons announced Monday that the hearings have been postponed, probably for several months.

The state assessment board is tied up with a major problem between the town of Yarmouth and Central Maine Power Co., regarding the oil-burning Wyman Power Station at Cousins Island. The town values the plant at $451 million and CMP has argued that the plant is worth only $118 million. State officials said the disparity is the largest ever faced by the board.

CMP officials said massive storm damage will be the highest priority for the next few months, possibly postponing the Yarmouth decision further, Gibbons said.

Because Yarmouth gets 44 percent of its total budget from the 40-year-old plant, the decision on the matter will be vital to local taxpayers, who would lose revenue of $3.4 million a year and face a tax rate increase of as much as 60 percent.

The Yarmouth case was expected to be settled last fall after about 20 days of testimony. Now the board has heard 25 days of testimony with no end in sight. The case could stretch out to April, further complicating matters in Thomaston.

Compared with Yarmouth, the Thomaston case may be considered a minor problem, with the Dragon Cement plant now valued at $42 million and the owners seeking an abatement based on a valuation of $23.5 million. But don’t tell Thomaston Town Manager Valmore Blastow Jr. that the Thomaston case is “minor.”

The four-year tax abatement sought by owners of the cement plant would mean a loss of tax revenue in excess of $1 million, a staggering loss in a community with an annual tax commitment of $3 million. The cement plant pays one-quarter of the municipal budget.

Blastow is now starting planning the annual budget for the town meeting in June. Once again, that budget will contain a $300,000 contribution to the cement plant sinking fund, now at $750,000. The fund would absorb much of the damage from a loss on the tax battle.

“It would be nice to know the decision now. We certainly expected it all to be settled by now. We will make no drastic changes to the budget. But I don’t know if we can hold the line again after three years of bare bones budgets,” Blastow said. Some of the capital expense items postponed for the last few years are starting to catch up with the town, he said.

Since the abatement request was filed in 1994, the Thomaston tax rate has jumped from $18.50 to $22.20. But much of the increase can be traced to school and county budget increases, which have jumped at a percentage rate far higher than that of the town, the manager said. “The municipal budget is now $6,000 under that of 1994, excluding the $300,000 for the sinking fund,” the manager said.

But he has no idea how long the town can continue to make $300,000 annual contributions while holding the line on taxes. “Sooner or later we are going to hit the wall,” he said.

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