State revenue officials are asking the legislature for extra funding to cover reimbursements for a property tax relief program that has run well over over its estimated costs.
The program was passed by the legislature two years ago, and froze property taxes for certain Maine seniors, reimbursing municipalities for lost tax revenue.
But in a letter sent to cities and towns earlier this month, Maine Revenue Services said that reimbursement requests have reached $26.5 million so far - much higher than the $15 million that lawmakers budgeted.
"Due to the shortfall in funding, Maine Revenue Services is in the process of issuing partial payments to each municipality that submitted a claim for reimbursement, and they will initially receive 56% of the amount requested," the agency said in the notice.
In an email, a spokesperson for the Maine Division of Administrative and Financial Services said, "Maine Revenue Services is requesting an additional $15,000,000 in the Supplemental Budget bill, which the Governor intends to include in her forthcoming supplemental budget request to the Legislature, with the expectation that, if and once approved by the Legislature, the balance of the reimbursement payments to the municipalities would be made this spring."
Kate Dufour, with the Maine Municipal Association, said that local officials have been worried about the program's potential costs. "And despite the proponents of the approach dismissing our concerns, it seems to have come to the light," Dufour said.
Dufour said that the situation will create uncertain budget situations until the legislature takes action.
"Until the appropriation is made, the bill is signed by the governor, it's still up in the air whether we'll be reimbursed for that particular expense," Dufour said.
The legislature repealed the property tax relief program last year, but property taxes for those in the program are frozen through this spring.
