Massive adjustments floated to beneficiant tax-freeze program for older Mainers
The Maine Legislature usually does issues slowly. From time to time, one thing occurs rapidly. One in all them was a program handed final 12 months that freezes property tax funds for all Mainers 65 and older.
Now, the state must pay the invoice. It’s resulting in a raft of reform proposals in Augusta. The principle one could possibly be a troublesome promote, as a result of it would carve many seniors out.
The way it handed: This concept started as a Republican invoice launched in 2021 that received little consideration from anybody in Augusta. However it was revived final 12 months on the very finish of price range talks when legislative Republicans used their share of cash left over in a bipartisan price range deal to fund start-up prices for this system. Democrats and Gov. Janet Mills, in the midst of campaigns, allowed it to enter legislation.
What it does: The sweeping legislation applies to all Mainers 65 and older who’ve gotten a homestead exemption for the previous 10 years or extra. They will apply yearly to have property taxes frozen on the degree of the earlier 12 months. The state pays cities and cities for the distinction, that means the scale of this system rises annually. No limits are positioned on this system and your taxes will be frozen even in case you transfer right into a higher-priced neighborhood.
Rising prices: The actual invoice for this system is coming due. The Mills administration expects the fee to leap from $15 million within the first 12 months to $31 million within the second 12 months. The design of this system, which has been roundly criticized by the Maine Municipal Affiliation and lots of native planners, has prompted a bunch of reform proposals.
The proposals: The affiliation’s key measure is led by Home Majority Chief Maureen Terry, D-Gorham. The invoice would change this system with an additional homestead exemption of $25,000 for seniors making lower than 80 % of the regional median revenue and $15,000 for these between 80 % and one hundred pc, inserting strict means testing right into a program with none.
Terry’s case for the measure provides as much as a legislative apology for the measure. She mentioned it shouldn’t have handed with such little legislative consideration and mentioned the present model pits “neighbor in opposition to neighbor.” The change would give extra help to seniors who want it most, she mentioned.
“I feel all of us, like, get into actuality slightly bit and know it would explode upon itself within the subsequent few years as a result of will probably be too costly to maintain,” Terry mentioned.
Terry shouldn’t be the one one proposing reforms. Sen. Rick Bennett, R-Oxford, desires a fair bigger homestead exemption to exchange this system, whereas the municipal affiliation is backing a invoice from Sen. Matt Pouliot, R-Augusta, to get rid of the requirement for individuals to use annually.
However, however, however: Reining in this system may include political dangers. Lawmakers not often wish to be clawing again advantages from a large swath of Mainers.
Mills funded the tax-freeze program in her two-year price range proposal, however she appears to be open to adjustments. Ben Goodman, her spokesperson, mentioned she thinks it’s acceptable for lawmakers to think about whether or not the objective of retaining seniors of their properties is being completed in essentially the most fiscally and administratively accountable method.
Senate Minority Chief Trey Stewart, R-Presque Isle, backs tweaks to the system, together with one clarifying that {couples} with just one senior within the family qualify. Nonetheless, he mentioned the state ought to implement this system and see the way it works earlier than smothering it.
“Let’s see what the issues actually are and never what persons are speculating they is perhaps and poking holes in issues as a result of it’s a brand new factor they don’t wish to strive,” he mentioned. “That’s what it boils right down to.”
