Sen. Tepler introduces bill to help municipalities recover more money, reduce property taxes

AUGUSTA – On Wednesday, Sen. Denise Tepler, D-Topsham, introduced a bill that would increase the amount municipalities can recover from the State through the Business Equipment Tax Exemption (BETE) program. LD 1206, “An Act to Control Property Taxes by Increasing the Percentage of the Business Equipment Tax Exemption That Municipalities May Recover,” was the subject of a public hearing before the Legislature’s Committee on Taxation.

“I am proud to sponsor this legislation because it’s the best of both worlds — if passed, it will not hurt businesses in my district and it will help municipal taxpayers,” said Sen. Tepler. “In the City of Bath, BETE-eligible personal property has surpassed taxable personal property. Although the tax value lies in Bath, the city cannot benefit from it and use recovered money to reduce property taxes. We must ensure that the BETE program continues to support business investment while restoring fairness to local taxpayers.”

LD 1206 would amend the BETE program to gradually increase the amount municipalities may recover from the State. The reimbursement increase will provide indirect property tax relief for Maine taxpayers.

“LD 1206 aims to relieve the burden on residential property taxpayers in Bath and other municipalities by gradually increasing the state’s reimbursement rate to 80% by 2030,” said Bath City Manager Marc Meyers. “Since the BETE program was created, additions to exemptions remove $21,132,900 in taxable value from Bath. That is the equivalent of removing 70 single-family homes from the City’s tax rolls.”

“The taxpayers of Bath have seen a disproportionate and negative impact from the Business Equipment Tax Exemption as it is written and administered today,” said Bath City Council President Miriam Johnson. “We pride ourselves on being the City of Ships, but BETE in its current iteration punishes Bath residents for our shipbuilding heritage.”

Since 2012, BETE-eligible property has grown in Bath from $28.2 million to $251.2 million in 2024, an almost nine-fold increase in 12 years. In 2020, the Office of Program Evaluation & Government Accountability (OPEGA) published a report to the Legislature on whether Business Exemption Tax Redemption and BETE programs were achieving their stated objectives. It concluded that the programs were failing and that “municipalities are not adequately reimbursed for mandated expenses”.

LD 1206 faces a work session and further action in committee.