MACHIAS — Last October, Washington County sent out letters asking municipalities to prepay their portion of a projected $8 million debt to avoid defaulting on its 2025 tax anticipation note.
In the months following, as more than half of the municipalities prepaid their portions and the debt became more defined, the $8 million figure dropped down to just under $7 million by the time the TAN came due in mid-February.
But, because towns prepaid against the higher figure, most of the towns that prepaid now have an unexpected credit with the county reflected in their tax bills.
Credits for towns that prepaid range from $1,586 in tiny Talmadge to $58,813 in Lubec, a figure the towns can either apply against 2026 taxes or ask to have refunded.
The credit for Machias is $43,553. In Jonesport, it’s $51,696; Addison, $45,177; Eastport, $44,573; Machiasport, $43,270; Calais, $52,617; Roque Bluffs, $23,329; Beals, $25,550; Cherryfield, $29,889.
According to Washington County Manager Renée Gray, commissioners aimed high in setting the $8 million figure to make sure the debt would be covered because there were so many factors at play. Now, if towns that have credit after prepaying their portion of the 2025 TAN want refunds, they just need to ask, Gray said.
“Some towns may want that money back. They have that option,” Gray said, although she added that so far most towns have asked for credits to be applied to 2026 county taxes.
The more the towns pay in advance on their 2026 taxes, the less the county will have to borrow in 2026.
In 2025, Gray said the county — which really means its municipalities and unorganized territories — paid $246,000 in interest on the TAN. If towns let their credits stand and if they start making monthly payments on their tax bills (instead of waiting until the Sept. 1 deadline to pay in full) the less the county will have to borrow and the less interest it will have to pay in 2026.
Borrowing and interest payments could be avoided, she explained, if the towns paid early, saving everyone money. “Nobody wants to pay on interest,” she said.
Machias Town Manager Sarah Craighead Dedmon said she was bracing for a 20 to 25 percent increase in the town’s share of the county budget for 2026, but with the credit it now has with the county, Machias will pay less in county taxes in 2026 than it did in 2025.
Washington County towns that did not prepay their share of the TAN still owe that amount, plus interest. Those towns include Baileyville, Beddington, Danforth, Deblois, Pembroke, Princeton, Robbinston, Vanceboro and Waite.
Some towns that prepaid their 2025 share are not receiving credits based on shifts in valuation and other factors. Those towns include Baring Plantation, Cutler, Meddybemps, Milbridge, Perry, Steuben and Whiting.
The unorganized territories, which did not prepay on the 2025 TAN, still owe Washington County $640,670.
On Thursday, L.D. 2222, An Act to Establish the Municipal Cost Components for Unorganized Territory Services to be Rendered in Fiscal Year 2026-27, came before the Legislature’s Committee on Taxation for a public hearing.
The bill, which is a recurring bill, routinely calculates what territories would pay for municipal services like education in each county.
This year the bill includes a special one-time payment of $640,671 for Washington County, rounded up to cover the UT portion of the 2025 debt, plus interest.
Gray said that more than 50 percent of Washington County’s geography falls in the UT, making it an important portion of the tax base. If passed, the payment would be made to Washington County by June 30 out of the ARP State Fiscal Recovery Fund.
Correction: This story has been updated to correct an error referencing the Passamaquoddy Nation. The Passamaquoddy Nation prepaid its portion of the Washington County 2025 tax anticipation note and has a $1,512 credit on its 2026 tax bill.
