WESTBROOK, Maine - Tonight in Westbrook, Gov. Paul LePage will kick off the first of at least two town hall meetings, and the conversation will center around proposed tax changes in his two-year budget. One proposal would allow municipalities to collect property taxes from some non-profits. It's no surprise that many non-profits are opposed to the idea, particularly those that say they're operating on a shoe string, including domestic violence and community health organizations.
The governor is proposing that local municipalities be allowed to collect property taxes on any non-profit with more than $500,000 worth of assessed property value. When Mary Haynes-Rodgers first heard about the idea, she thought she'd misunderstood.
"It was like, 'Oh my God, $500,000 of property is nothing, especially if you run residential facilities,' " she says.
Haynes-Rodgers is executive director of Portland-based Shalom House, which provides case management and housing services for individuals with mental illness. Shalom House owns 27 properties worth more than $11 million. Housing Director Norman Maze estimates Shalom House could be on the hook for up to $90,000 a year in property taxes. And the agency can't even sell any of the properties to raise money.
"We have an agreement with Maine Housing," Maze says. "We have covenants - deeded covenants - upon this property to use it as a certain public good. And if we're not able to continue to use it as that public good, they're not going to say, 'Go ahead and sell it, and you take the profit off of it.' They're going to say, 'Wait a minute - we're going to need to find another non-profit who can use it for a public good."
Shalom House is, in effect, stuck, says Mary Haynes-Rodgers, as it needs staff to run its residential programs, and revenues come mostly from the state's Medicaid program, MaineCare, which are fixed.
Rodgers says the tax proposal would ultimately put Shalom House out of business. "Our clients have nowhere to go," she says. "That impacts their quality of life, it impacts their families, it impacts communities, because you're going to increase homelessness."
Some domestic violence organizations that provide housing would also be subject to property taxes. The executive director of Family Crisis Services in Portland, Lois Reckitt, estimates a $12,000 property tax bill.
"Trust me, we have found every way we could save money in this world," Reckitt says. "If you looked at our administration, it's very tiny for an agency our size. There's really only part of me and part of an administrative assistant, and we're managing a little over $1 million a year, so it's really a little crazy."
As it is, domestic violence organizations can't keep up with current needs, says Julie Colpitts, the executive director of the Maine Coalition to End Domestic Violence. "Last year for example, 901 requests for shelter were unmet due to service limitations," Colpitts says.
Colpitts say one rationale for the tax proposal is that municipalities could funnel tax revenue back to non-profits. But she says there's no guarantee, and domestic violence organizations can't afford extra costs.
"There's no fat left in our systems," she says. "If, in fact, we have to come up with contributions or taxes, there will be fewer services available to people who are at the highest risk of safety needs."
The CEO of the Maine Primary Care Association, Vanessa Santarelli, is also worried about fewer services at community health centers. She says about half of the state's 19 health centers would be subject to property taxes.
"We serve anyone, so that puts some financial pressure on our health centers in order to be able to keep their doors open for all of their patients and to meet the increased demand on services for new patients coming in," Santarelli says.
Federally qualified health centers are required to serve patients, regardless of ability to pay, and Santarelli says they're already absorbing more patients who are no longer eligible for MaineCare. She says paying property taxes would add to the existing financial strain that has already caused layoffs.
A spokesperson for the LePage administration did not respond to requests for comment.
The governor's town hall budget forum is scheduled for 6 p.m. at the Westbrook Performing Arts Center.
In the interest of full disclosure, MPBN, which is a non-profit, would also be subject to the property tax proposal.
