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Many towns across Washington County are set to meet in the coming weeks to vote on plans to prepay their share of the county’s outstanding 2025 debt to avoid higher taxes in 2026. Others are refusing to do so.
Cynthia Gay, who is the treasurer, tax collector, registrar, road commissioner, town clerk, bureau of motor vehicles agent and assistant to the select boards in Beddington and Deblois, said, “I’m not going to do a damn thing until I get a bill” next year.
Voters in both towns were nearly unanimous in rejecting the county’s bond referendum in November.
“I asked the selectmen if they were going to bring it before the people, and they said ‘no.’ They already voted on it,” Gay said.
The Nov. 4 bond referendum, proposed by the Washington County Commission, sought voter approval to borrow up to $11 million to pay off an $8 million tax anticipation note owed to Machias Savings Bank by Dec. 31, as required by state law.
Officials said the shortfall stems from years of poor financial management, including underbilling municipalities. The county has drained its reserve account to cover part of the debt, but is projected to be $8 million short by the end of 2025.
County commissioners held several meetings in the fall to discuss ways to reduce the debt and consider cuts, fully aware of voters’ frustration with the county’s financial management.
On Oct. 9, commissioners David Burns, Billy Howard and Courtney Hammond signed a letter to every municipality, explaining that in June they discovered the county lacked the “carry-forward funds” it typically uses to pay off its routine annual tax anticipation note, or TAN.
In the letter, they asked each town to consider prepaying its share of the tax anticipation note by year’s end. In exchange, towns would not be required to pay interest on any bond the county may borrow to cover the $8 million debt.
The letter noted that “some towns may prefer this approach over accumulating interest over several years, maintaining lower tax rates for their citizens.”
The payoff amounts provided to municipalities are based on a percentage of 2025 valuations, meaning communities with higher valuations — including Addison, Calais, Milbridge, Eastport, Jonesport, Lubec, Machiasport, Steuben and Whiting — will pay a larger share of the debt.
Baileyville faces the highest percentage, at 7.2%, and its payoff amount is the highest, at $572,742. Because Baileyville has a larger population than many Washington County towns, however, its per capita cost is $439, which is less than some communities.
In Beddington, the third-smallest organized town in Maine, Select Board Chair Jean Kaye said residents are coming into the Town Office unable to pay their current taxes.
“They literally come into my Town Office in tears,” she said, asking, if taxes increase, “how do I pay for my electric and heating, my prescriptions and food?”
Many Beddington residents are already on tax payment plans, she added.
Like Gay, Kaye is steadfast in her refusal to make any decision until 2026. But she said once the bill comes in from the county, “the best thing I can think of is we’ll send letters with our tax bills and let more people go on payment plans.”
Kaye said her biggest concern is the town’s seniors, followed by lobstermen and blueberry workers, all of whom had a difficult 2025.
Washington County is Maine’s poorest county, with a median income of $52,237 and a median home value of $147,100, according to U.S. Census Bureau figures. An estimated 17.8% of residents live below the poverty line.
“People are in dire straits and can’t pay their taxes, and I still have to run a town,” Kaye said.
She noted that the lack of storefront businesses contributing to the tax base does not help.
“We don’t have any of that. We have land,” she said, adding that the bill will fall entirely on property owners.
Beddington’s tax anticipation note payoff is $97,766. With a population of 62, that amounts to $1,577 per person — the highest per capita payoff in the county.
“We shouldn’t have to tax everybody to death to do this,” Gay said. “The people who live there year-round live there year-round for a reason. It’s just like Deblois. It absolutely kills me.”
Deblois faces the second-highest payoff per person at $850, with its 76 residents owing a total of $64,612.
Acknowledging that higher-value properties will help ease the burden on some lower-valued properties, Kaye said some summer homeowners also live in Washington County, “so they’re going to be hit in both places. Some of the homes, some of these people have lived here forever,” bringing their families up to camp.
“They’re older people. They’re retired people,” she said, and they will likely find the increased taxes difficult.
Washington County Manager Renée Gray said she recognizes there will be pain, and if towns are not able to make prepayments this year, the county has no option but to roll their share into 2026 taxes.
“There’s no choice for county tax,” she said. “It’s time to put the pitchforks away. This is the situation we’re in. We just need to figure out how to move forward out of this together.”
The county has been negotiating with the bank, but there is little room to maneuver in meeting the 2025 debt obligation.
Asked whether any towns will take the prepayment option, Gray said there has been a fairly good response, including from her hometown of Addison, where voters unanimously approved a $325,321 prepayment plan.
Harrington has also voted to prepay, and Columbia Falls, Jonesboro and Steuben are expected to do the same, she said.
“It’s up to the municipality to figure out a way to ease the burden on the taxpayer,” Gray said, suggesting options, such as selling municipal property or using surplus funds set aside for a capital project, to prepay county taxes.
Gray pointed to Jonesport’s proposal to borrow from its own funds rather than seek a bank loan.
Harry Fish Jr., chair of the Jonesport Board of Selectmen and a member of the county’s Budget Advisory Committee, said town officials have proposed borrowing their $375,088 share from municipal surplus and repaying it to that account at 1% interest over five years.
“It’s the same process we use if we have a major road construction project,” he said. “We borrow from our surplus, and then set a payback schedule, usually around 1%.”
Repaying its own surplus fund would cost Jonesport about $10,000 in interest over five years, Fish said, far less than the town would pay a bank.
“We always pay ourselves back, with a little interest,” he said. “It’s the cheapest way out.”
Jonesport is set to vote on the plan this week, Fish said, but he is less confident of the outcome than with other borrowing proposals for major projects because “Jonesport defeated the bond issue by more than 30 votes.”
As a county official, Fish urged municipalities to consider the prepayment option, noting: “They’ll still have to pay their share plus interest next year. They’re not going to escape paying their share.”
Fish said he has spoken to many people who “think that if you don’t agree to pay the debt, it goes away. It doesn’t work that way.”
He said he has also been frustrated by talk of excessive cuts to county services to meet the debt, arguing the reductions would make it impossible to sustain adequate staffing for emergency dispatch, the Washington County Sheriff’s Office and prosecutors — services residents often do not realize they need until they do.
As a member of the county’s Budget Advisory Committee, which is close to finalizing the 2026 budget, Fish said he is “hoping it’s going to wind up being at least in the vicinity of at least $1 million less than what was proposed.”
Fish said he would like voters to see the current debt as “water under the bridge. It’s gone. We’ve got to deal with the water that’s coming, not the water that’s gone by. That’s where we are.”
Lubec Town Administrator Suzette Francis told Monitor Local she believes voters will approve a prepayment plan at a special town meeting scheduled for Wednesday.
A public hearing is planned for 6 p.m. that night, to present the plan to cash a $500,000 certificate of deposit in which the town invested in a few years ago. Lubec’s debt portion is $423,512, and Francis said the bank has already offered to waive the early withdrawal fee.
Once the details of cashing the CD rather than borrowing to pay the town’s share of the debt are explained to voters, Francis said she believes a majority will agree to pay it “because either way, we’re going to be made to pay it.”
Machias held a public hearing Nov. 19, and is scheduled to convene a special town meeting at 5 p.m. Wednesday to consider two options: a five-year loan at 4.2% interest, with annual payments of about $70,964 and total interest of $40,668, or a 10-year loan at 5.6% interest that would reduce annual payments to about $41,878, but increase total interest to $104,628.
Other municipalities are not budging. Like Beddington and Deblois, Milbridge has voted against prepayment. The Calais City Council declined to discuss the issue at its last meeting, and Gray expects more towns will follow suit.
She urged those acting in anger to consider the county’s prepay option, even if they lack surplus funds and would have to borrow. If they do not, she said, they will face the bills “on top of their 2026 tax,” and time is running out because towns must meet the state’s seven-day requirement to post special town meetings needed for voters to approve prepayment.
Kaye in Beddington said she is not willing to spend the town’s reserves to prepay the debt because she does not know how the town’s 2026 operating budget will look.
“This is going to be hard on the town, and I never think a town should take a loan that they’re not responsible for,” she said. “They didn’t create this situation. If my town was in this kind of financial situation, is the county going to help me out?”
