Proposal from Sen. Bailey that will help seniors stay in their homes becomes law

Posted: July 21, 2021 | Senator Bailey

AUGUSTA – On Monday, July 19, the Legislature passed and Gov. Janet Mills signed into law a bill that makes a once-in-a-lifetime investment in Maine children, workers, families, businesses and communities. L.D. 1733, “An Act To Provide Allocations for the Distribution of State Fiscal Recovery Funds,” uses unallocated federal funds directed to Maine through the American Rescue Plan and includes a proposal from Sen. Bailey that will provide seniors with property tax relief and help them to stay in their homes.

“I hear too many stories of seniors who simply cannot afford food, medicine and property taxes, which means they end up having to choose one over the other and then go without necessities,” said Sen. Bailey. “Seniors worked hard for their entire lives to pay off their mortgages and earn a quiet retirement inside their homes. But the reality is, they are struggling to pay ever-increasing property taxes. Property tax relief for seniors was one of my earliest top priorities since I first became a legislator, and I’m so proud to finally see this become a reality.”

L.D. 1638, “An Act To Help Seniors and Certain Persons with Disabilities Remain in Their Homes by Providing for the Deferral of Property Taxes,” was sponsored by Sen. Bailey and was based upon her previous efforts in the 128th and 129th Legislatures. It would reinstate the state’s property tax deferral program, which was in place from 1989 through 1991, allowing the state to pay the property taxes for those who qualify, and obtain a lien on the real estate for reimbursement after the property owner or owners passes away, from their estate. The property taxes paid by the state are repaid when the property is sold or the participant (or spouse) passes away.

Since 2020, property taxes have been rising sharply as a result of a pandemic-fueled home-buying spree. These higher property taxes hit seniors especially hard because they often live on the fixed incomes of retirement savings and Social Security, which are not going to rise at the same rate as escalating home valuations. Additionally, 29 percent of Maine seniors live in families with low income, and the 56.4 percent of Maine seniors who receive Social Security payments get on average just $11,964 annually.

“Seniors are facing numerous challenges as it is, especially burdensome property taxes. Many seniors have lived in their homes for decades while contributing to the growth and prosperity of their community,” said Sen. Rafferty, D-Kennebunk, who cosponsored the bill. “This property tax relief for seniors is designed to ensure they can continue to live without the worry of being displaced.”

LD 1733 allocates $3.2 million in Federal American Rescue Plan funds to establish the Senior Tax Deferral Revolving Account, and fund a limited period position to oversee it, through fiscal year 2023. After fiscal year 2023, default funding will come from the HOME Fund, through the Maine State Housing Authority.

LD 1733, which includes the funding for LD 1638, goes into effect 90 days after the Legislature adjourns sine die.