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Saco Considers Property Tax Deferral for Seniors

Tonight, city councilors in Saco will consider adopting a plan that would let seniors defer property tax payments.  The idea is to help long-time residents stay in their homes as they struggle to keep up with climbing taxes.  But as Patty Wight reports, critics say the plan merely moves the financial burden to the next generation.
The idea to bring the property tax deferral to Saco is Don Pilon's.  He's the mayor and a former state lawmaker who co-sponsored a bill back in 2009 that makes the program possible.  

Pilon says the deferral is intended for residents who tell him they can't afford to stay in the town they've lived in most or all of their lives, "to protect our generational people -  what I call the fabric of Maine."

The program would allow Saco residents who are at least 70 years old, earning less than 300 percent of the poverty level and who have lived in their home for at least 10 years, to defer their property tax payments until they move or pass away. It's needed, says Pilon, because people from away are buying modest homes along the coast that have been there for generations.  

They tear them down "and they build what I refer to as 'McMansions' next door to our generational people," Pilon says. "And then the assessor comes into the area and reevaluates these properties. And my residents that have been there forever also experience the reevaluation" - sending their tax bills skyward.

"Oh, they go up every year," says Bob Stewart, 74.  He's lived in Saco for 17 years. "Two years ago, they went up 18 percent for me.  I mean - I think when I moved here, my property taxes were about $1,400 a year. Currently, my property taxes are over $3,400 a year."

Stewart says he can still pay his taxes, but he supports the plan that would allow struggling seniors to defer their payments.  But 72-year-old Saco City Councilor Arthur Tardif balks at the idea - because when those property taxes are finally due, so is an 8 percent interest rate that potentially falls on the next generation.

"Are their relatives going to be able to pay off all those taxes and interest rates to get the property back?  Because the city will own it," Tardif says. "And then if we get it, is it going to be worth as much as it was before?  Because they've let it go - it's not their home anymore - they let it go. If they don't have the money to pay their taxes, they're not going to have the money to keep it up."  

Another councilor, Eric Cote, says residents should pay at least a portion of their taxes, and the city already offers payment plans for those who can't keep up. "No, I think what we already do works well," Cote says. "I've never heard anyone complain about it."

Saco Finance Director Cheryl Fournier says at any given time about a dozen people use the city's payment plan.  If Saco were to adopt the property tax deferral, she suspects only one or two residents would use it, as is the case in other Maine towns, such as Wells and Winthrop, that offer the program.  

"I am really on the fence about it," Fournier says. "I think the idea of being able to defer the taxes is great.  It concerns me a little bit on the cash flow piece, but it really concerns me about the kids who get left at the end and have to deal with all of it."

The 8 percent interest rate is a concern for the Maine AARP.  Spokesman John Hennessy says cities like Boston with similar programs have just a 4 percent interest rate.  But overall, he says the plan is a good idea.

"As Maine being the oldest state in the country, we've got to start thinking innovatively how to keep people living independently in their own homes," Hennessy says.

Saco resident Bob Stewart says as the City Council debates whether to adopt the property tax deferral for seniors, he hopes they consider another option that would lower taxes altogether: reduce spending.