Lawmakers in Augusta have approved the allocation of more than $15 million to reimburse municipalities for the cost associated with the short-lived Property Tax Stabilization for Senior Citizens program.
After the appropriation was unanimously approved in committee, both chambers of the legislature voted without a roll call in favor of adopting the measure.
LD 646 — sponsored by Rep. Melanie F. Sachs (D-Freeport) — was originally a “placeholder” concept draft carried over from the first legislative session.
Earlier this month, the Appropriations and Financial Affairs Committee unanimously accepted an amendment adding substance to the bill and re-titling it to “An Act to Fully Reimburse Municipalities for Lost Revenue Under the Property Tax Stabilization for Senior Citizens Program.”
Under this amendment, the emergency bill allocates $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.
It also designates an additional $50,000 for the “implementation and administrative” costs associated with the Stabilization Program’s establishment.
The Property Tax Stabilization for Senior Citizens program — originally passed in August of 2022 — was repealed by lawmakers last summer and was only be applicable to the property tax year that began on April 1, 2023.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 from municipalities to taxpayers statewide.
The fiscal note attached to the final version of the Stabilization Program indicated that roughly $2 million were initially allocated from the General Fund to cover the cost of municipal reimbursements for fiscal year 2023-24.
Based on the claims made in the emergency preamble to the bill, “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.
Click Here to Read the Full Text of LD 646 As Amended
In her testimony introducing the bill, Rep. Sachs explained that the costs associated with the now-defunct Stabilization Program are “double what was estimated,” and consequently, current appropriations have “only met 56 percent of the actual cost.”
“Municipalities were sent notices that they would be reimbursed the rest if and when the supplemental budget was enacted,” Sachs said. “I am committed to meeting 100 percent of our financial obligations under this current program to our municipalities right now.”
Click Here to Read Rep. Sachs’ Full Testimony
Lawmakers in the House engrossed this legislation on Wednesday, February 21, and the Senate followed suit on Tuesday, February 27.
Representatives in the House unanimously voted Wednesday to enact the bill. Eleven lawmakers were absent at the time of the vote.
Should the requisite two-thirds of Senate also vote to enact LD 646, the bill will then be sent to Gov. Janet Mills (D) for her signature.
According to the bill, the State Controller will be required “to transfer funds in March and June of 2024.”
The $15 million appropriation must be transferred by March 1, and the $50,000 portion of the funds must be transferred by June 30.
