MILLSFIELD – Due to a decrease in timber-tax revenues, property owners here and in two other unincorporated places will soon see something they haven’t for almost a decade: a tax bill from Coos County.
Jennifer Fish, who is the Coos County administrator, said once the New Hampshire Department of Revenue Administration sets the tax rates in the unincorporated places, property tax bills will go out to owners of both land and buildings in Millsfield, Odell and Success.
Those sparsely populated communities, she said, have traditionally paid little or no property taxes to the county, mostly because timber-tax revenues have offset any tax liability.
Fish and Paul Grenier, who is vice chairman of the Coos County Commission, stressed that in Millsfield the tax bills have nothing to do with the ongoing dispute between the county and 11 property owners who in 2009 struck a confidential deal with Granite Reliable Power, which owns and operates a wind farm there and in neighboring Dixville.
In 2008, GRP, whose corporate parent is Brookfield Renewable Power, inked a 10-year, payment-in-lieu-of-taxes (PILOT) agreement with the Coos County Commission that annually pays the county about $500,000. The PILOT payment, combined with timber-tax money, has meant that Millsfield property owners have not received a tax bill from the county since 2007, Fish and Grenier said.
Under the agreement between GRP and the Millsfield property owners, GRP annually pays the owners a minimum of $2,500 and up to $5,000 for any tax increases attributable to the wind farm, as long as the PILOT remains in place.
The agreement only came to light last week and immediately upset some members of the County Commission and Coos delegation who had been unaware of it and had worked for the better part of two years to successfully introduce legislation that fixed the valuation of the wind farm at $113 million for the life of the PILOT.
In 2012, when the GRP wind farm became operational, the state assessed it at $228 million, an amount that the Millsfield property owners said would cause their tax bills to spike into the tens of thousands of dollars and which would render their properties unsalable. Reacting to that threat, Coos County lawmakers introduced House Bill 1590, which Gov. Maggie Hassan signed into law last July and which keeps the value of the wind farm at the figure in the PILOT.
Grenier, who has been an outspoken critic of the secret deal the Millsfield property owners have with GRP, said last Wednesday that the deal won’t spare the owners from the pending tax increase. While GRP, and to a much greater extent, timber companies, own big chunks of Millsfield, the latter won’t be paying any additional taxes to the county, Grenier said. But their tenants will.
Bayroot LLC and Wagner Forest Management, Grenier explained, have historically allowed recreational public access to their timber lands and have also permitted the construction of numerous camps and cabins on lands that they have leased.
Clauses in the lease contracts provide that even though the companies own the land, taxation for improvements upon it are the responsibility of the party who put them there.
Braced for tax bill
Ron Baillargeon of Franconia has a lease with Bayroot for a piece of property on Millsfield Pond on which he has a 1,200-square-foot cabin that he has owned for some four years. When he bought the cabin, the previous owners told him they hadn’t had to pay any taxes “in years.”
Now, according to a letter sent to him and his neighbors on Millsfield Pond from Coos County, Baillargeon is bracing for the likelihood of paying taxes, although on Thursday, he said he didn’t fully understand why. He thinks it’s because of a change in the valuation of the wind farm.
Baillargeon questioned the decrease in timber-tax revenue from Millsfield because of the continued logging that he continues to see there.
If there is a tax bill with his name on it, Baillargeon hopes that the justification for it is clear.
“I suspect that the county is looking at the gold mine” that he and other building owners can provide it, said Baillargeon. Grenier had another term to describe Millsfield and the other incorporated places in Coos County, calling them the county’s “breadbasket.”
Keeping taxes low or non-existent in the unincorporated places helps preserve the integrity of huge swaths of land which otherwise might be developed, said Grenier. Owned by timber companies, that land also generates tax revenue when its trees are harvested.
Grenier said county taxpayers are not subsidizing property or building owners in any of the unincorporated places.
As to Millsfield specifically, Fish said the county received $43,445 in timber taxes in 2013 and for the current tax year, budgeted about $47,000. For 2014, Millsfield, she said, has a cumulative tax liability to the county of around $130,000. Currently, the tax rate there is zero.
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