AUGUSTA, Maine — A sweeping new program that goals to freeze property taxes for Maine seniors faces huge questions from the native officers who must implement it about two weeks earlier than it takes impact.
The under-the-radar measure may have a significant impact within the nation’s oldest state by median age and the one with the second-highest homeownership charge. Practically 80 % of Mainers aged 65 and older owned houses in 2017, based on census information. It signifies that greater than 200,000 folks may see property tax funds frozen underneath this system, with the state making up the distinction to the municipalities seeing diminished tax funds.
However cities and cities have no idea what number of residents shall be eligible for a program that Mainers must choose into at municipal workplaces every year. It would develop dearer over the subsequent a number of years because the inhabitants ages and as extra folks join a brand new program that comes with no revenue limits and few different restrictions.
The state has solely devoted a scant quantity of funding that shall be wanted thus far, which is simply one of many causes some native officers are fearful about implementing it.
“We may get between 500 and 1,000 functions, and we’re a really small workplace and produce other issues to do,” stated Kerry Leichtman, the tax assessor for Camden and Rockport. “So it’s going to influence us administratively for fairly some time.”
The property tax, which largely funds native governments, has lengthy been focused by policymakers partly as a result of it’s the one which falls hardest on low-income folks. No less than six states have tax freezes for seniors or others, based on the Nationwide Convention of State Legislatures.
This program, which was sponsored within the Legislature by Sen. Trey Stewart, R-Presque Isle, is a novel one. Eligible Mainers should be 65 or older and have certified for the Homestead Exemption for a minimum of the previous 10 years. There are not any revenue limits and Mainers should apply by Dec. 1 of every yr to have tax obligations frozen on the earlier yr’s degree.
It additionally permits frozen funds to be transferred between cities and cities. If a senior strikes from a house in a single city to a higher-value dwelling in a second city, they’d pay the quantity on their former dwelling. The second city would invoice the state for the distinction between that decrease fee and what the conventional one could be for the senior’s property in that city.
When the measure was launched in 2021, each the administration of Gov. Janet Mills and the Maine Municipal Affiliation stated the measure could violate the Maine Structure, which says property taxes should be “assessed equally.” Stewart stated the measure was impressed by a 70-year-old constituent who couldn’t bear growing taxes on a household camp.
A legislative committee opposed the invoice, however it stalled for almost a yr. Then, legislative Republicans revived it as a part of a $1.2 billion spending invoice handed in June. Lawmakers rapidly despatched it to the Democratic governor, who allowed it to go with out her signature in a yr when she faces a reelection problem from former Gov. Paul LePage.
Lawmakers solely had to offer $315,000 initially for the state to implement this system. Subsequent yr, they must start overlaying reimbursement prices for it to function. The Legislature’s fiscal workplace expects whole program prices to rise from $2.2 million within the first yr to $14 million within the third yr as tax assessments change or others be part of this system.
This system goes into impact on Aug. 8. Simply earlier than that, the state’s finances division plans to launch functions and guidelines, spokesperson Sharon Huntley stated.
Talks are already underneath manner on the municipal affiliation to push lawmakers to overtake the regulation, stated Kate Dufour, the group’s lobbyist. That could possibly be a troublesome dialog because the program is so beneficiant.
Stewart downplayed the considerations of some native officers, noting that assessors he has talked to see the regulation positively. He downplayed considerations of beneficiant advantages being given to individuals who transfer throughout city strains, saying Maine seniors are way more more likely to downsize and that the Legislature may repair any issues developing early subsequent yr.
“Let’s see what the info says,” he stated. “We’ll get via this for a yr.”
Leichtman stated his cities will take steps to ensure each eligible particular person is conscious of this system. Nonetheless, he fears that it is going to be “inconceivable” to implement resulting from rigid tax software program and potential cash-flow issues. Whereas first property tax installments are normally due Oct. 15, the regulation permits the state to reimburse cities and cities as late as Jan. 15.
“That is what occurs when choices are made in haste,” Dufour stated.