This is the story of a property tax “sleeper bill” that was expected to die on the table last year because of widely held concerns about cost, administration and applicability.
Sleep, it did not. The legislation was carried over this spring. It’s here, it’s poorly provided for and it’s now abundantly clear why many thought it would never come to pass.
The program allows Maine homeowners to freeze their annual tax bills at the previous year’s amount, on four conditions: They must be permanent residents of Maine; have owned a homestead or primary dwelling in the state for 10 years; be eligible for the Homestead Exemption on the property, and be at least 65 years old. In theory, the legislation is supposed to defend besieged seniors on fixed incomes. In practice, its surprise passage has left municipal officials racing to make the necessary arrangements.
The argument against means testing or the imposition of an income limit – or a property value threshold – was that the vetting of homeowners’ income and assets would be challenging for municipalities; that municipalities shouldn’t have been charged with that level of administration.
The decision not to means-test applicants leaves the program wide open to including homeowners who do not need the relief. Maine Municipal Association spokesperson Kate Dufour, who doesn’t believe the program was adequately studied, put it in bald terms last month: “You could be the wealthiest resident of Maine and qualify for this.”
Our reporting has shown that, even having been spared that layer of responsibility, guidelines from Maine Revenue Services have bamboozled municipalities and heaped additional work onto assessors. The state will reimburse municipalities for the tax (property tax is the No. 1 source of revenue for local governments in the U.S.), but not for the administration carried out by town and city halls. In a deeply strained labor market, that’s audacious.
Certain corner-cutting seems to indicate an understanding of the extent of the work created for municipal workers – and maybe a desire to limit it. The application for the program – which must be filled out before Dec. 1 this year and again every subsequent year – somehow features no requirement of proof of age. Rather than freeing municipalities up, the form’s surprisingly few requirements have created headaches for officers who are attempting to determine eligibility.
On top of that, a slack approach to supporting application materials risks making what’s supposed to be a highly targeted form of relief not nearly targeted enough.
Maine is not the first state to implement such a program. Nearly all states have some form of homestead exemption for seniors and other qualifying applicants, where the assessed value of a home is lowered for tax purposes. Some states – including Connecticut, New Jersey, Rhode Island and Texas – have successfully brought in the type of tax freeze program that Maine is trying to get off the ground. A cursory glance at the information available to residents of these states online shows a level of county-by-county buy-in that Maine simply has not taken the steps to secure.
“The net effect will be zero to the town, but a huge benefit for senior citizens across Maine,” Sen. Trey Stewart, R-Presque Isle, who introduced the bill, told News Center Maine earlier this summer.
Already we see that the first part isn’t altogether true. With changes that sharpen the program’s focus while taking the administrative reality into account, there’s still a chance the second part can be.
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