All Bath taxpayers have the right to request an abatement (an adjustment in their valuation) within 185 days of the date each year that the valuations are finalized and tax bills are prepared. Bath Iron Works asked for their valuation to be reduced to $287 million in both 2019 and 2020 (a $257 million reduction in taxable value each year).
The Assessor reviewed BIW’s abatement requests, consulted with nationally-known experts, and investigated BIW’s valuation details closely, including the over 10,000 items on BIW’s annual declaration of assets. Maine’s constitution and laws require that all property be assessed in accordance with its just (fair and market-based) value. The Assessor concluded that an adjustment in Bath Iron Works' property value was warranted.
The final valuation adjustment for 2020 reduces BIW’s valuation from $640 million to $509 million, a change of $131 million. In a significant result of our settlement discussions, Bath Iron Works agreed to drop their request for an abatement for Tax Year (TY) 2019.
Bath Iron Works and the City agreed to mediation on BIW’s request for abatements in order to avoid the many years of financial uncertainty and risk that a lengthy legal battle over the valuation of Bath Iron Works’ property would cause. Most importantly to the City, the settlement agreement that resulted from our mediation allowed us to minimize the impact of the BIW valuation adjustment on other Bath taxpayers.
With approval of a three-year, interest free payment plan, and the negotiated application of the valuation adjustments, the impact on all Bath taxpayers in TY 2021 should be limited to less than $60 per $100,000 of valuation (approximately a 3% increase in the tax rate).
The actual tax implications of the adjusted valuation for Bath property owners may be significantly less than $60 per $100,000 of valuation once all property values are updated for the year. As is true every year, the final tax rate for TY 2021 cannot be calculated until the end of August, when valuations are finalized and tax bills are prepared.
The City and BIW negotiated to delay repayment of the balance due for the 2020 abatement for two years. Repayment begins in TY 2023, which is also the year that the 1997 TIF agreement with BIW for the Land Level Transfer Facility expires. The City will use a portion of the tax revenue that will no longer be returned to BIW under the 1997 TIF to instead pay the 2020 tax abatement over a three year period. The City and BIW agreed no interest would be charged to the City for the delayed repayment. This agreement means that no tax increases for Bath property owners should be required in order to pay the 2020 abatement amount due to Bath Iron Works (a total of $921,797.04).
Updated 24 Jun 2021