MILLINOCKET – A group of residents is challenging a tax break the Town Council approved last week for Great Northern Paper Co.

On Tuesday, six residents initiated a petition asking that the council’s approval of a tax increment financing district for the paper company be overturned and that the issue be voted on in a special referendum.

Last week, the council voted to give Great Northern a tax break by creating a TIF program for the new investments the company makes in its Millinocket paper mill modernization project. In exchange, Great Northern will drop its pending tax abatements of $4.7 million. The company will not dispute its tax bills during the term of the 17-year agreement.

Under the agreement, the town would receive 15 percent of the tax revenues from the company’s new investments. GNP will retain 85 percent of the new tax revenues from its investments for 12 years, but only if the company, its subsidiaries and the new paper filler plant continue to employ 630 full-time people. Current employment levels are about 730. If employment levels drop below 630, the percentage of GNP’s TIF will drop by 2 percent for every 10 jobs that are lost down to 50 percent.

James DiCentes, Bruce Leavitt, John DiCentes, Wayne Brooker and Joel Neal Sr. initiated the petition drive Tuesday afternoon.

The group expressed a number of concerns about Great Northern’s TIF. Petitioners say language in the TIF does not go far enough to protect the union contracts should the company be sold in the future and they said the company should not be allowed to cut 100 jobs at the mill before losing some of its tax break from the town. Both issues have been hotly debated in recent weeks.

“I think the employees of Inexcon/Great Northern, who live in Millinocket, have contributed enough,” said James DiCentes.

He said employees will receive no pay increases for five years, are paying much higher health care rates and have given a number of other concessions to help the company. “I don’t think it’s fair for them to come back to us and want us to pay their taxes,” said DiCentes. “They have taken enough out of us.”

Leavitt echoed many of those concerns. “We gave up enough,” he said. “I don’t think this TIF will help anybody.” Leavitt said the TIF should be decided by all of the voters.

John DiCentes, a resident and member of the Katahdin Area Retirees Association, said Great Northern’s TIF was not fair to the town and the employees in the mill.

“Jobs need to be secured so these people [employees] will stay in town,” he said. “That is nothing to ask from the company … to give the language protection the unions need. If they don’t want to do that, they are not doing justice to the town of Millinocket and they have something else up their sleeve.”

The TIF includes a provision allowing it to be transferred to another company with Town Council approval should the company be sold. Although the council revised the language twice, petitioners say it is not adequate.

Petitioners said the company should be penalized for all jobs cut at the paper mill.

In the meantime, petitioners must obtain the signatures of at least 433 registered voters and return them to Town Clerk Diane Lombard by Monday, Nov. 19.

A provision in Millinocket’s charter allows residents to overrule action of the Town Council within 10 days of a council vote. The council voted on Nov. 8, but because the 10th day falls on a Sunday, the deadline is Nov. 19.

Once the petitions are returned, the clerk must certify there are sufficient signatures. Within 14 days of the petitions being filed, the council must set a public hearing date. Within 14 days of the hearing, the council must set the date for a referendum vote.

Town Manager Gene Conlogue said if petitioners were successful in meeting the requirements, a special council meeting could be held Nov. 20 to set a public hearing date. He said a hearing likely would be held Nov. 29 and the council would set a referendum date. He said the referendum likely would be held in January.

Although the town has not set a new tax rate and won’t until the TIF issue is resolved, Conlogue is asking taxpayers to pay one-half of last year’s bill before Dec. 31. He said it would allow taxpayers to claim it on their income tax and would help the town’s cash flow.