A popular property tax relief program created last year for Mainers 65 and older may be in for big changes, and could be scrapped entirely and replaced with something else.

The property tax stabilization program allows residents who meet the age requirement and have owned a home for at least 10 years to indefinitely freeze their property tax bills so that they would no longer have to pay annual increases resulting from rising tax rates.

It was immediately a hit with older home owners. Cities and towns were flooded with an estimated 100,000 applications in the first year.

The intent of the program, said its sponsor Sen. Trey Stewart, R-Presque Isle, is to provide Maine’s retirees, and especially those living on modest fixed incomes, with some certainty about their annual expenses. That would allow them to budget appropriately and shield them from unaffordable cost of living increases that could push some out of their homes.

That objective is well-supported across the political spectrum. But the property tax stabilization program did not get a lot of discussion before it was proposed and passed, and a long list of unintended consequences is forcing the Legislature to reconsider the program.

Chief among the criticisms is ballooning cost – estimated at $47 million for the next two years – and the fact that wealthy taxpayers can qualify for the same relief as those struggling to keep their homes. In fact, the owners of the state’s most expensive homes with the highest tax bills stand to get the biggest subsidies.

While the program provides property tax relief, the cost will likely shift to those who pay state income and sales taxes. That’s because it calls for the state to reimburse towns and cities for the lost property tax revenues.

The program also has created a significant workload for municipalities tasked with reviewing program applications, which must be filed every year to avoid tax increases. And it allows Mainers to carry a stabilized property tax bill from one town to another regardless of local tax rates, something critics say could lead to more inequities.

The Maine Legislature is considering at least eight separate bills to tweak, overhaul or eliminate the program. The menu of options includes limiting eligibility to individuals earning less than $60,000 and couples less than $120,000, and simply eliminating and replacing the program. Some lawmakers want to scrap the idea and instead help older residents by expanding the homestead exemption, a well-established program that exempts part of a home’s value from property taxes.

The heavy lifting is falling to the members of the Legislature’s Taxation Committee, which is scheduled to discuss four of the bills Tuesday. Four other bills have not yet been scheduled for a public hearing and it’s possible more proposals could emerge.

There is no way to know how many Mainers over 65 have owned a home for 10 years and are therefore eligible. But about one-third of Maine’s roughly 300,000 citizens age 65 and older applied, according to a state estimate.

The program’s enormous popularity could complicate efforts to limit or replace it.

On Thursday afternoon, a small group of women gathered at the Westbrook community center for a game of  Mahjong, a tile-based game that originated in China but is now popular throughout the world. Seven of the eight women said they are property owners, and all seven signed up for property tax stabilization. The women said they are big fans of the law and find it frustrating when their property taxes go up. They said they would like to use the money they save from property tax stabilization to either travel, save money for their grandchildren or buy gifts for their grandchildren.

In South Portland, lifelong Maine resident Patricia Fucciani said she didn’t apply for the program before the December deadline for this year, but plans to for next year.

Fucciani, 86, has lived in her South Portland home for 13 years and has been a Maine homeowner for 50 years. She and her husband have lived off an annual fixed income of $50,000 to $60,000 for the past 25 years and pay $6,000 a year in property taxes, she said. Before retirement, Fucciani owned a small gift shop in Cape Elizabeth with her sister and her husband worked as a pipefitter.

She’s not worried about losing her home because of the property tax bill, but said it’s challenging to budget when cost of living keeps going up. Noting the rapidly increasing costs of oil, electricity and food, she said, it would be nice if her property taxes were consistent.

“We saved a lot because we knew we wanted to retire and be comfortable,” Fucciani said. “It’s not right for our property taxes to keep going up.”

But some, including Gov. Janet Mills, say that while they want to support Maine’s senior citizens, they worry that keeping the law will become prohibitively expensive.

“While the Governor supports the aim of program, which is to ensure that older, low-income Maine residents are not displaced from their long-term homes by increasing property taxes, she believes it would be appropriate for the Legislature to examine whether that goal is being accomplished in a fiscally-sustainable and administratively-feasible way or whether other options to achieve that goal are better,” said spokesperson Ben Goodman.

And those costs to the state are expected to balloon over time as property tax rates rise and residents using the program keep paying the same dollar amount.

The state budget signed by Mills on Friday includes $15 million to reimburse municipalities for lost revenue in the coming fiscal year and $31 million in the following year, a one-year increase of 107 percent. It also provides a little more than $1 million over the next two years for towns and cities to administer the program.

When the law was first passed, the costs were expected to be far lower: $2.6 million in fiscal 2024, $7 million in fiscal 2025 and $14 million the next year.

The Maine Municipal Association’s director of state and federal relations, Kate Dufour, said she worries about the ability of the Legislature to fund the program long term.

“There is nothing to prevent the Legislature, if this gets too costly, to revert back to only reimbursing 50 percent.” The Maine Constitution requires the state to reimburse 50 percent of property taxes lost due to statutory property tax exemptions or credits.

Dufour said she worries that if that happens, it will be up to the municipalities to figure out how to make up for lost revenue by either raising taxes on everyone else, decreasing services, or both.

“The municipalities would shoulder the burden, blame and public outcry,” said Dufour.

Municipal tax assessors who have been inundated with hundreds of applications are among the most vocal critics of the law.

“While the intent of the new law certainly has merit, the requirements, logistics, delivery, reimbursement and equitability of the program raises serious questions,” Amanda Campbell, Georgetown town administrator, said in written testimony to the Legislature’s Taxation Committee. “The administrative burden of this program already placed on municipal offices equates to nothing other than yet another unfunded mandate and the 100 applications received in Georgetown have already resulted in multiple hours of paperwork.”

Dufour said that while the $1 million dollars over two years to pay the administrative cost of implementing the law is a step in the right direction, it’s not enough. The $500,000 per year, assuming around 100,000 people apply annually, assumes it costs municipalities $5 per application. Dufour said it can often take many hours to go through an application and confirm that someone has owned a home in Maine for 10 years and otherwise qualifies for the program.

Bill sponsor Stewart said Friday he is not concerned about the potential costs.

“We just approved $10 billion in spending with no tax relief,” Stewart said, referring to the budget bill passed by Democrats last week. “My concern is getting as much tax relief out the door as we can. Some people are more interested in social programming than giving money back to the people, but that is their money, they paid it in so we should be doing everything we possibly can to get that money back to them.”

Fellow Republicans are among those proposing major changes to the law, however.

Sen. Richard Bennett, R-Oxford, sponsored one of the bills calling for eliminating the program. His bill would replace it by increasing the state’s homestead exemption to $75,000 of a home’s value for people over 65 who have owned the home for 10 years. Current law allows an exemption of up to $25,000 of a home’s value.

In testimony he presented to the Taxation Committee two weeks ago, Bennett said the nearly $50 million budgeted for the next two years “will balloon in the out years.

“And worse, I believe the Property Tax Stabilization Program will create unintended consequences and many inequities going forward,” he said. “It will be gamed by people who have ample means to pay property taxes to pass their costs to others. It will allow those who get windfalls such as large inheritances to move their residences to homes with high property taxes and avoid paying them. If this program is allowed to continue, I believe we will come to regret it.”