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Slew of new bills revives debate over popular property tax relief program for older Mainers

The Maine State House is seen Monday, Nov. 12, 2018, in Augusta, Maine.
Robert F. Bukaty
The Maine State House is seen Monday, Nov. 12, 2018, in Augusta, Maine.

State lawmakers are sponsoring several bills this session that would alter a popular property tax relief program for Mainers over the age of 65. Municipalities say the new program, which became law last year, is difficult to implement and too expensive for the state to sustain, prompting a debate over how best to keep older Mainers in their homes.

Thousands of applications poured into Maine municipalities this winter for the senior property tax stabilization program, which allows homeowners age 65 and older to have their property taxes frozen at the previous year's levels.

Applicants must have owned their homes for at least 10 years. But there are no income restrictions, and they must reapply annually.

"It's very important to our seniors that they don't have to do this every year," said state Rep. Jennifer Poirier, R-Skowhegan. "A lot of the people I talk to, the folks are scared that they're either going to miss the deadline or not have somebody there to help them get the paperwork or remember to get the paperwork. It's not something you put on your calendar."

Poirier is the sponsor of one of two bills that would eliminate the annual application requirement. Many municipal assessors and others agree: The annual deadline has created some anxiety among older homeowners.

And with hundreds of applications to process, supporters of the bill say the Legislature should, at the very least, eliminate the annual requirement.

But they voiced several other concerns about the program, worries that have been echoed by the taxation committee as the Legislature discusses the upcoming budget.

Gov. Janet Mills included $46 million in her biennial budget to pay for the program over the next two years.

But should the state choose not to set aside those funds, or if budgets tighten in the future, municipalities say they worry they won't be reimbursed for the full costs of freezing property taxes for older Mainers. Brewer assessor Valerie Moon said towns would be forced to raise property taxes on those who are not eligible for stabilization.

"If you make everyone stabilized, our schools aren't going to get funded. Our municipal services aren't going to get funded. Our youth are going to leave our state and go to another state, and we're going to be in a crisis situation," she told the taxation committee. "There has to be a point where these things stop."

And Kerry Leichtman, an assessor serving multiple midcoast towns, says he sees examples of how the program could be abused, even though it was well-intentioned.

"Somebody who came into my office said she was going to put a house for her son on her property," he said. "That wasn't going to be taxed. When I mentioned it was going to be easy to scam, that's one of the scams."

Another bill, sponsored by state Sen. Rick Bennett, R-Oxford, would eliminate the property tax program after this year. Instead, he's proposing changes to the homestead exemption, which currently reduces the value of a home by $25,000 for property tax purposes and applies to permanent Maine residents who have owned their home for at least 12 months.

Bennett said his bill would raise the homestead exemption to $75,000 for Mainers 65 and older who have owned their home for at least a decade.

"Helping our seniors age in place in their own homes is a worthy investment," he said. "With this bill I'm seeking to streamline government by expanding a program that Mainers understand and have used for years that lowers property taxes while eliminating another that's been confusing for many."

Though Bennett's proposal received more positive feedback than the others, many municipal officers urged the Legislature to establish some kind of income restriction, so relief could be targeted to those who need it most.

Another bill, sponsored by state Rep. Maureen Terry, D-Gorham, and co-written by the Maine Municipal Association, would create a tiered homestead exemption for Mainers over 65 depending on their income, but it wasn't printed in time for this week's hearing. Other bills are in the works.