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LD 290, “An Act To Stabilize Property Taxes for Individuals 65 Years of Age or Older Who Own a Homestead for at Least 10 Years” is poorly crafted legislation and should be repealed by the next Legislature.
As enacted, this law grants property tax limitation to any taxpayer over age 65, regardless of financial means, who has owned a taxable homestead in Maine for at least 10 years. Conversely, this tax relief legislation does not apply to the sizable population of Maine residents over age 65 who rent homes or are shareholders in senior housing cooperative corporations and who do not have individual property tax accounts with a municipality.
Beyond its indiscriminate application within the generic class of senior citizen taxpayers, this legislation places an undue and costly administrative burden upon municipalities. Under LD 290, a municipality will have to pay for an additional step in its annual budget process. Property tax bills for qualifying seniors will be capped and the lost revenue will have to be accounted for and made up by some means until the state gets around to reimbursing the municipality. Such reimbursement is at the annual whim of the Legislature. Recall that the Legislature has been laggard for years in fully funding previously mandated revenue sharing payments to municipalities.
There are residents of Maine for whom property taxes are a genuine financial hardship, not merely a financial inconvenience. It is a worthy goal for the Legislature to provide property tax relief for such hardship cases, and not just to the subset of such cases who happen to be senior citizens. It is also a worthy goal for the Legislature to provide full and prompt reimbursement of lost tax revenue to municipalities from progressive state income tax revenues. With these objectives in mind, and with careful deliberation, the next Legislature can come up with a worthy replacement for LD 290.
Paul Smith
Orono
