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New Maine law allowing seniors to freeze property taxes takes effect

The state has only dedicated a scant amount of funding that will be needed so far, which is just one of the reasons some local officials are worried about implementing it.
Micky Bedell
The state has only dedicated a scant amount of funding that will be needed so far, which is just one of the reasons some local officials are worried about implementing it.

A new state law takes effect Monday that allows Maine seniors to put a freeze on their property taxes, but it's drawn concern from municipal officials about the program's potential cost and scope.

The original law's sponsor, Sen. Trey Stewart, R-Aroostook, said he can't take full credit for the original idea behind the property tax stabilization program.

A woman in Aroostook County approached him and suggested that Mainers, once they reach a certain age, should have their property taxes frozen.

The property tax stabilization program, which the state legislature quietly provided initial start-up funding for this year, does exactly that.

To qualify, permanent Maine residents must be 65 or older and have owned a home for at least 10 years. There are no income restrictions, in part, because Stewart said it would have been too complicated.

"The goal is to make it simple, quick, painless," he said.

Mainers have until Dec. 1 this year — and each year after — to apply through their towns for stabilization. Those approved this fall, for example, will have next year's tax bill frozen at this year's levels.

Seniors who move will be allowed to transfer the fixed tax bill to their new property, even if it's in a town with higher taxes. The state will reimburse municipalities for lost revenue.

"Any time that we can provide more stability for seniors and help them age well in place in the home that they're comfortable with and have lived in for the vast majority of their life, that's a good thing," Stewart said. "That's a role that I think state government can and ought to be doing more to secure."

But Kate Dufour, director of advocacy and communications for the Maine Municipal Association, said some towns and cities are worried about the program.

"There are two broad categories of concerns," she said. "The first is a public relations nightmare."

Dufour worries the annual application requirement will place an administrative burden on municipalities, who are already crunched for time and resources. And she said it puts more pressure on municipal officials to provide a service that she believes the state could handle instead.

"If somebody forgets to apply, they're not going to yell at a state legislator. They're not going to yell at Maine Revenue Services; they're going to yell at their community," Dufour said. "It's frustrating that we're being put in that position."

It's unclear exactly how many Maine seniors will be eligible and how many will apply. A spokesperson for Maine Revenue Services, which released the application and guidance for the program last week, said it doesn't have an estimate for the number of people who may be eligible.

But according to 2020 census data, a little more than 238,000 Maine homeowners are 65 or older.

The Aroostook Agency on Aging estimates some 11,000 people in the county could be eligible for the new program. It, along with other similar agencies, are fielding phone calls from older Mainers and are preparing to help them apply for the program, said Rick Bragg, community outreach and education manager for the organization.

In Bangor, there could be as many as 500-to-800 people who are eligible, Phil Drew, the city's assessor, said. He agrees the program could be beneficial for eligible seniors, though he said assessors around the state "gasped" when they heard it had become law.

Drew said he and his existing staff will do their best to implement the new program and remind residents each year to apply again. He expects to meet with city councilors later this month to discuss whether they'll actively advertise the program to residents and mail out applications.

But the program could get expensive, he added.

"The amount that the state will pick up could be huge, it could be a huge amount," Drew said. "And whether the state is going to set aside enough money to fund that...?"

According to the new law, the state may reimburse municipalities for the full costs of freezing property taxes. And while Stewart said he's optimistic the legislature will prioritize funding for the program in the future, some municipalities aren't so sure.

The Maine constitution only requires the state reimburse towns for half of lost revenue costs, Dufour said.

State appropriators set aside $315,242 to launch the program this fiscal year. They estimate it'll cost at least $2.2 million next year and more than $7 million the year after.

"If the state finds this to be far too expensive to reimburse municipalities for that 100% loss, then we're going to get to the 50% level," Dufour said. "And all we're going to do is shift additional burdens onto young families and businesses."

But Stewart said the state is committed to making the program work, and there is no reason to believe the tax burden will be unfairly shifted to others.

"The state has said and supported our decision to prioritize those folks and set funds aside for them," he said. "Let's see how this thing goes, rather than freaking out and basically making up doomsday scenarios about things that have never happened."

Dufour said the Maine Municipal Association is gathering a list of concerns about the new law and possible solutions to address them. She believes there is still time to change the program, because eligible seniors won't see the benefits until later next year.

Applications for the senior property tax stabilization program are now available. Municipalities can begin accepting them Sept. 1.