Lawmakers in Augusta are set to consider a bill that would provide additional funding to reimburse municipalities for the short-lived Property Tax Stabilization for Senior Citizens program.
LD 646 — sponsored by Rep. Melanie F. Sachs (D-Freeport) — was a “placeholder” concept draft carried over from the first legislative session, according to an email sent over the Appropriations and Financial Affairs Committee’s public listserv Wednesday.
An amendment has been proposed that would retitle LD 646 from “An Act to Provide Appropriations and Allocations for the Operations of State Government” to “An Act to Fully Reimburse Municipalities for Lost Revenue Under the Property Tax Stabilization for Senior Citizens Program.”
Under the proposed amendment, the emergency bill would allocate $15 million from the unappropriated General Fund surplus to cover the cost of required municipal reimbursements for lost property tax revenue associated with the stabilization program.
The Property Tax Stabilization for Senior Citizens program — originally passed in August of 2022 — was repealed by lawmakers last summer and was only be applicable to the property tax year that began on April 1, 2023.
Intended to stabilize property tax bills for full-time Mainers age 65 and older, the program was expected to cost state taxpayers millions annually, increasing substantially with each passing year.
Although municipalities were to be fully reimbursed for revenue lost as a result of this program, critics pointed out that the design simply shifted costs to taxpayers statewide.
The fiscal note attached to the final version of the Stabilization Program indicated that roughly $2 million were allocated from the General Fund to cover the cost of municipal reimbursements for fiscal year 2023-24.
The newly-proposed amendment to LD 646, if approved, would appropriate additional funds to allow the state to distribute the remainder of the required reimbursements to municipalities across the state.
Based on the claims made in the emergency preamble to the amendment, “certain municipalities have not been fully reimbursed for lost revenue resulting from underfunding of the property tax stabilization program.”
Because “the lost revenue may have an immediate and material effect on municipalities,” the proposed amendment would transfer $15 million from the unappropriated General Fund surplus to cover the additional municipal reimbursements.
This, however, is not the only property tax legislation currently under consideration by lawmakers this year.
Also carried over last the previous legislative session was LD 1737 — An Act to Provide Up to $5,000 in Property Tax Relief to Veterans — was introduced by Rep. Benjamin C. Hymes (R-Waldo) and aims to provide more substantial property tax relief for Maine’s veterans.
According to testimony provided by Rep. Hymes before the Committee on Taxation, state law as written results in veterans receiving only a few dollars worth of relief.
The way the law is currently constructed, Hymes explains, is that $6,000 is subtracted from the property’s assessed value — meaning that if an eligible veteran owns a home assessed at $300,000, he would pay property taxes on $294,0000.
LD 1737 would change this such that eligible veterans would receive up to $5,000 off their final property tax bill.
On January 23, the Taxation Committee voted on the bill but has not yet reported out its results.
Prior to the start of this session, the Legislative Council approved consideration of a handful of bills concerning issues relating to property taxes, including: An Act Regarding the Homestead Property Tax Exemption and the Property Value Reassessment Process (LD 2162), An Act to Accelerate the Production of Affordable Housing and Strengthen the Historic Property Rehabilitation Tax Credit (LD 2106), and An Act to Provide Property Tax Relief by Increasing the Availability of the Property Tax Fairness Credit (LD 2144).
A public hearing for LD 646 has been scheduled for February 13, 2024 at 2pm in State House Room 228.
The hearing can also be streamed live online here.