SKOWHEGAN — Selectmen Wednesday night approved a court affidavit to appeal the town’s state valuation for 2015 in light of a $100 million decrease in the value of the Sappi Fine Paper mill.

The appeal, to be filed with the state Board of Property Tax Review, hopes to reflect an adjustment by the town’s Board of Assessors in April that cut the tax value of the mill by more than $100 million. The town is requesting that the state valuation of the town reflect the same reduction in value because of its impact on school funding, state revenue sharing and the town’s share of county taxes.

Madison selectmen last month agreed to do a similar thing after the valuation of Madison Paper Industries mill was reduced by $150 million. The two towns’ boards are meeting Nov. 24 to discuss the move further.

The state valuation of $1.1 billion by the Maine Revenue Service is excessive and should be reduced, the appeal, signed by all five Skowhegan selectmen, reads.

The document states that the state valuation is set without regard to the drop in demand for and the value of paper made at the U.S. Route 201 mill.

Consideration of the trends in the North American paper market must be made on the income producing ability and the value of the paper mill itself, according to the document.

Board of Assessors assistant Bill Van Tuinen said there is ample precedent in the state for such a reduction in town valuation because of decreases in value of other mills and hydro plants, and he is “cautiously optimistic” that such an effort will be approved by the Legislature.

The appeal affidavit first was presented to the board two weeks ago, but action was postponed until the town attorney could have another look at it.

The motion to table Oct. 28 was made by Selectman Donald Skillings, who worried that appealing the state valuation and requesting the reduction in valuation would weaken and jeopardize the town’s ability to defend the town’s valuation of the Sappi mill if it appeals its 2014 taxes.

William Dale, of Portland, who is representing the town in its appeal, said the action would not weaken the town and in fact could strengthen its position.

“On the contrary, we can stand tall and say we’ve done the right thing and stand behind that generally,” Dale wrote in an email to Town Manager Christine Almand. “Indeed, not to have reduced the mill’s valuation would have shown we weren’t (being) honest and acting properly regarding assessments in Skowhegan.”

Van Tuinen,who represented the town in talks that led to an adjustment that cut the tax value of the mill by more than $100 million, said there is hope that the town could see some relief from the state.

The state valuation is the basis of the determination of school subsidies from the state and the amount of county taxes to be paid, and it is a big part of the formula for allocating state revenue sharing, Van Tuinen said in a letter to the town manager and the Board of Selectmen.

A higher state valuation means that more funding for education comes from local taxpayers and less from education subsidy from the state, he said. The town also would contribute a higher percentage of the county tax with a higher valuation and receive less in state municipal revenue sharing.

Van Tuinen said there are examples of the Legislature granting such relief to specific towns with such losses if town officials can prove they have examined other available avenues of relief, including an appeal to Maine Revenue Services.

“So I am cautiously optimistic that such efforts might be approved by the Legislature,” Van Tuinen said in the letter.

The Board of Assessors in September set the value of the mill on U.S. Route 201 at slightly more than $463 million — down from the previous assessment of $567 million.

State valuation generally lags two years behind the local valuation, Van Tuinen said, meaning that the state valuation for Skowhegan for 2015 would be based on 2013 property assessments.

If the town’s valuation is not appealed, Skowhegan taxpayers would pay county taxes and receive school funding and revenue sharing funds based on the proposed state valuation, which doesn’t take into account the loss in value of the Sappi mill.

Any appeal filed with the state would not affect taxes until 2015 at the earliest, but it could provide tax relief in the future, especially for school funding, which is determined by the average state valuation over the last three years, Van Tuinen said.

Doug Harlow — 612-2367

dharlow@centralmaine.com

Twitter: @Doug_Harlow