Senate Democrats focused on reining in out-of-control property taxes

Posted: February 02, 2017 | Appropriations and Financial Affairs, Taxation

AUGUSTA — Senate Democrats in the Maine Legislature will stand with Maine’s property taxpayers who risk being priced out of their homes because of Augusta’s failure to address skyrocketing property tax rates.

The Appropriations and Financial Affairs Committee and the Taxation Committee held a joint public hearing Monday on portions of Gov. Paul LePage’s budget proposal that would affect property taxes. The governor’s budget would cause sharp property tax increases for hundreds of thousands of Mainers, all while giving huge tax cuts to the top 1 percent.

“Tax relief for the most wealthy Mainers shouldn’t come at the expense of low-income and elderly Mainers, who could be forced out of their homes if their property taxes continue to rise,” said Senate Democratic Leader Troy Jackson. “Nonstop increases in property taxes aren’t just threatening to price low-income families and seniors out of their homes. They are literally tearing communities apart. Augusta’s failure to pay its bills has driven property taxes so high in Aroostook County that a group of residents of Caribou are trying to secede and form a new town just to get some relief.”

A report released Monday by the Maine Center for Economic Policy reveals that just one piece of the governor’s budget — his plan to eliminate the Homestead Property Tax Exemption for anyone under 65 years old — would cause an average $313 property tax increase for more than half of Maine’s homeowners. The totality of the governor’s budget would cause even more property tax increases.

The state has a legal obligation to remit 5 percent of income tax revenue to municipalities to cover the cost of important local services such as public safety and road maintenance. But for years, Maine has failed to pay this bill. Currently, the state is funding only 40 percent of municipal revenue sharing.

Failure to fund municipal revenue sharing is just one way that Augusta has failed local property taxpayers. The state has also consistently failed to meet its legal obligation to cover 55 percent of essential programs and services at public schools. These failures have shifted the tax burden onto property taxpayer. Meanwhile, state programs that provide direct property tax relief have been cut.

Cuts to revenue sharing, public schools and property tax relief have paid for huge income tax cuts. Gov. Paul LePage’s proposed budget would continue this shift, giving an average $23,000 back to the top 1 percent of earners while increasing property taxes on more than half of Maine’s families.

Senate Democrats have introduced several bills to address increasing property taxes by meeting its funding obligations to municipalities and public schools, and by providing direct relief to property taxpayers.

For example, Sen. Shenna Bellows, D-Manchester, has introduced LD 133, “An Act To Support Lower Property Taxes by Restoring State-Municipal Revenue Sharing,” would ramp up state payments for municipalities, increasing property tax relief every year until the state is finally paying its bills, in full..

“In my district, I’ve met with dozens of families struggling under the weight of rising property taxes,” said Sen. Bellows. “I’ve met a retirement-age farming couple forced to work part jobs, long after they thought they’d retire, just to pay the property tax bill so they can stay in their home,” said Sen. Bellows. “Seniors deserve better than to live in fear of losing their homes and independence. We need to do right by our elderly, and that means lowering property taxes, not raising them as the governor’s budget proposes.”

Additional bills submitted by Senate Democrats would create a state fund to match local spending on local infrastructure; increase direct property tax relief to Maine residents; and provide additional relief to disabled Maine veterans.