Old Town residents are facing a 38 percent property tax increase if the state doesn’t help fill a gap in the city’s budget caused by the closure of a paper mill.
The city is navigating a $1.5 million revenue loss in its July 2025 to June 2026 budget following the closure of the ND Paper mill in June 2023. The pulp mill closed because of the rising cost of fiber and energy, the company previously told the Bangor Daily News.
In the aftermath of the closure, the city filed for an adjustment in the amount of money it receives from the state because of the “sudden and severe” disruption to its tax base, Old Town City Manager Bill Mayo said. An answer from the state is expected in the coming weeks.
If the state does not provide extra funding, Old Town will have to increase its property taxes by 38 percent to make up the difference, Mayo said. Officials discussed one alternative at a city council meeting on Monday in which they could eliminate 17 jobs, or 20 percent of the city’s staff, to help close the budget gap. In that scenario, property taxes would only go up 21 percent.
The proposed budget discussed at the city council meeting was just for “illustration purposes” until the state issues its decision on the extra funding, Mayo said.
Six firefighters are part of the proposed cuts, which would bring the department below the legal minimum staffing threshold for two of the four shifts, firefighter Matthew Webber said at the meeting. The second ambulance the department runs would not be staffed.
Other cuts in the proposed budget include two full-time and one part-time police officers; one full-time and one part-time public works employees; and one full-time and one part-time city hall employees. Overall, 12 full-time and five part-time positions would be cut.
The city council doesn’t typically take action on the budget until June so there is time to address the issues, Mayo said. The budget will change a lot before the council votes.
City staff have met with department managers to discuss what they need in the budget, so now it’s just waiting to hear what aid the city receives from the state.
Mayo is hopeful the state funding will make a big difference in the budget but he doesn’t really know what it will provide.
“There’s a lot of major factors that unfortunately are coming together not in our favor all at the same time,” Mayo said.
