Following months of discussion, the Newcastle Board of Selectmen granted Lincoln Academy’s request for an abatement for its staff apartments Monday, Feb. 15.
The board voted 3-1 to grant the abatement following discussion in closed session. Selectman Chris Doherty cast the dissenting vote, and Selectman Carolyn Hatch was absent.
“We are pleased to learn of the board’s decision regarding our request for an abatement for taxes assessed on our dormitory parents’ apartments,” Lincoln Academy Head of School David Sturdevant said in a statement. “While we understand and appreciate the practice of taxing free-standing faculty and staff houses on a (nonprofit) school’s campus, we consider the apartments within a dormitory integral and essential to the operation of our educational mission, putting them in a different situation.
“That being said, with our mission and focus to serve our community, to be a focal point for education and growth of all types, and our desire to be good neighbors, the academy board will be considering including voluntary (payment in lieu of tax) funds in subsequent budgets,” Sturdevant said.
The decision follows months of discussion between the board, Newcastle Assessors’ Agent Jim Murphy, and Sturdevant about whether the staff apartments in the dormitory are tax-exempt.
In June 2015, Murphy assessed the apartments at $726,900 and taxed the school $13,120.55. Murphy determined the staff apartments in the new dormitory, which opened in February 2015, and pre-existing staff housing in Hall House were taxable, even though the majority of the campus is tax-exempt.
Sturdevant filed an abatement request on behalf of the school Dec. 21, 2015.
The board heard the abatement request Jan. 11. Murphy and Sturdevant were present at the meeting. Much of the discussion revolved around possible interpretations of the state taxation statute.
According to the statute, property owned and occupied solely for educational purposes is exempt from taxation. If a building or part of the building is primarily used for employee housing, that building, or the part of the building used for employee housing, is not tax-exempt.
Sturdevant said the staff apartments are not primarily used for employee housing, but rather for supervising the dormitory and the students living there.
Selectman Ben Frey said both Murphy and Sturdevant’s arguments hinged on the interpretation of the word “primarily” in the statute.
“Neither one of them is wrong,” Frey said during the Jan. 11 meeting. “The language of the statute is just ambiguous. The meaning changes depending on how you emphasize the word ‘primarily.’”
Town attorney Peter Drum examined the statue and made a recommendation to the board during an executive session Jan. 25.
The board had 60 days after Sturdevant filed the request Dec. 21, 2015 to make a decision about the request. Had the deadline passed, the request would have automatically been denied, Murphy said.
Murphy said he is “greatly disappointed in the decision.”
“This decision was clearly not based on Maine Assessment Law and the abatement and exemption argument presented by Lincoln Academy,” Murphy said. “This situation brings forth that rare occasion where elected lay board members, while well meaning, have differing conclusions from their professional assessor agents who are obligated to follow Maine Law.”
