JAY — Taxpayers will have to dig deeper into their pockets to pay their taxes for 2016-17. The tax rate is expected to rise at least $3 per $1,000 of valuation.

Selectpersons will hold a special meeting at 4 p.m. Tuesday, Aug. 30, at the Town Office to set the rate, Town Manager Shiloh LaFreniere said Thursday.

The declining value of the Verso Androscoggin paper mill and associated properties, along with the settlement agreement that was reached between Verso and the town in April, are contributing factors to the higher rate.

In the April agreement, selectpersons agreed to give Verso a credit of $4 million over the next three tax years in six credits to settle the tax disputes for 2013, 2014 and 2015. Verso claimed Jay had overvalued its property for those years.

Although the town reduced its net municipal budget by nearly 10 percent this year and is receiving additional funding through education subsidies and state revenue-sharing, the decrease in the mill valuation will result in a significant increase in the tax rate, LaFreniere said.

The current rate is $17.25 per $1,000 of valuation. LaFreniere expects it to increase to the low $20s.

If the rate increases by $3 to $20.25, a property owner of a $100,000 home would have a tax bill of $2,025, an increase of $300, not factoring in any exemptions.

The state has increased the Homestead Exemption amount this year for eligible properties by $5,000 to make it a $15,000 exemption.

With this change, a property owner of a $100,000 home would see an increase of $168 after factoring in the Homestead Exemption, LaFreniere said.

According to www.maine.gov, the Homestead Exemption is a program that provides property tax relief for people who have owned property in Maine for at least 12 months and who make the property they occupy on April 1 their permanent residence.

Once the Board of Selectpersons commit taxes, LaFreniere said, she will apply to the state for another sudden and severe adjustment to the town’s state valuation.

If approved, the adjustment will provide increased education subsidy and state revenue-sharing to help offset next year’s tax rate.

Next year, the Franklin County tax will reflect the town’s reduction in value, she said.

In June, the state approved the town’s application for a sudden and severe loss of valuation, and effectively reduced the town’s state valuation by $142.35 million for each of 2013, 2014, 2015 and 2016.

The town lost valuation when the paper mill and associated properties declined in value. Verso shut down its No. 2 paper machine and a pulp dryer in the fall of 2015 at the Jay mill. It also permanently eliminated 300 jobs at the site.

The town just had another revaluation done on the mill and properties and the value has declined again.

This adjustment affects how much money the town of Jay will receive for education subsidies and Maine revenue-sharing.

dperry@sunmediagroup.net