Republican Lawmakers Express Staunch Opposition to Repeal of 2005 Limit on Municipal Property Tax Increases

Lawmakers in Augusta are considering the repeal of a 2005 law placing limits on the degree to which municipalities can increase the amount of property taxes they raise in a given year.

Brought forward by Sen. Teresa Pierce (D-Cumberland), LD 2102 seeks to roll back laws that have been in place for nearly twenty years and were designed to curb government spending and reduce Mainers’ tax burden.

Last November, Democrat members of the Legislative Council unanimously approved the bill’s introduction, while the Republicans were united in their opposition.

[RELATED: Maine Democrats Attempting to Repeal Limit on Municipal Spending in Place Since 2005]

The law that Democrats are now seeking to repeal — referred to as LD 1 — was originally implemented in January 2005 after “countless hours” of consideration by the Legislature’s Joint Select Committee on Property Tax Reform” and was ultimately passed “by wide margins in both houses,” according to a 2006 report on the law.

“LD 1 limits growth of each municipality’s property tax levy to the growth rate of Maine’s average personal income (adjusted for inflation) plus the municipality’s property growth factor,” the report explains. “The property growth factor is different for each town; it is a measure of the new development occurring within the municipality’s borders.”

Click Here to Read the Full 2006 Report on LD 1

The law contains a number of exceptions to this limit — such as natural disasters — and residents can vote to voluntarily exceed this limit if they so desire.

Sen. Pierce suggested in her testimony introducing LD 2102 that the municipal property tax levy cap established by LD 1 “has served its purpose.”

“I’m sure, at the time of putting this law to be into place nearly 20 years ago, this cap seemed necessary,” Pierce testified. “However, this statute has proven outdated and confusing for towns and their residents.”

“While the current levy limit procedure can certainly act as an internal ‘check and balance’ for municipalities,” the Maine Municipal Association (MMA) testified, “it is often confusing to calculate; is difficult to explain to town meeting voters, often resulting in occurrences of accidental disapproval of a complete municipal budget; and is inequitably applied as communities whose budgets are approved by a council, rather than town meeting, can facilitate the procedure much more easily.”

“Municipal officials should be trusted to present budgets that accurately reflect the needs of their communities without the concerns of voters unintentionally underfunding services or of potentially spending additional, unbudgeted, tax dollars to hold a special town meeting to correct a voting error,” the MMA said.

“Internal controls already exist at the municipal level with the working relationships between treasurers, finance directors and board or council members,” said the MMA. “This additional mandated limit on local spending only ties the hands of local leaders, preventing optimum service delivery to their communities.”

During a press briefing held Tuesday, Republican lawmakers strongly spoke out against LD 2102, arguing that it would “limit [Mainers’] voice” and create “mistrust in public officials.”

“Unfortunately, Democrats think that its a good idea to lift the cap on local property taxes,” said Rep. Billy Bob Faulkingham (R-Winter Harbor).

“We support keeping the property tax levy limit because the government should respect taxpayers and keep its promises,” said Rep. Amy Bradstreet Arata (R-New Gloucester).

“[This limit] makes sense because taxes should not increase faster than your income does,” Rep. Arata said. “Unfortunately LD 2102 is currently pending in the Senate and would remove the property tax levy limit and take power away from local voters and give it to the local governments.”

“Local officials have responsibility to budget within the limits given to them, and if they can’t do so, they owe clear explanation to the voters about why they should vote to override that limit,” said Arata. “Voters should have the right to force the municipality to honor the tax levy limit.”

“It has been said that this property tax limit is old fashioned,” Arata concluded, “but there is nothing old fashioned about keeping your promises.”

Sen. Peter Lyford (R-Penobscot) noted in his remarks that he understands “the challenges faced when balancing complex municipal budgets,” having served as a council member himself in the past.

“But public officials have a responsibility to create budgets within the limits provided by the voters,” Sen. Lyford said. “If they are unable to do so, they owe a clear explanation to their voters. Voters have the right to compel their municipalities to honor the property tax levy limit.”

“Passage of 2102 would strip away this important right and limit the voices of the voters and residents,” Lyford said. “Doing away with the municipal property tax levy limitation would potential result in uncontrolled spending at the municipal level with the corresponding property tax increases on Mainers, including seniors on fixed incomes [and] families struggling to make ends meet.”

Lawmakers also pointed out at the press briefing that back in 2005, the implementation of this limit was supported by current Senate President and then representative Troy Jackson (D) and Sen. Peggy Rotundo (D-Androscoggin), as well as current governor and then representative Janet Mills (D).

Click Here for More Information on LD 2102

Although both chambers of the Legislature have yet to vote on LD 2102, the Committee on State and Local Government released its divided report on the bill this past Wednesday.

Committee members were split along partisan lines concerning this legislation with unanimous opposition from Republicans and united support from the Democrats. The one Independent member of the committee joined the Democrats in support of this bill.

Voting in support of repealing the municipal property tax levy limit were Sen. Tim Nangle (D-Cumberland), Rep. Holly B. Stover (D-Boothbay), Rep. Mana H. Abdi (D-Lewiston), Sen. Joe Baldacci (D-Penobscot), Rep. Lynn H. Copeland (D-Saco), Rep. Deqa Dhalac (D-South Portland), Rep. Walter N. Riseman (I-Harrison), and Rep. David A. Sinclair (D-Bath).

Opposing LD 2102 were Rep. Jeffrey Sean Adams (R-Lebanon), Rep. Randall Adam Greenwood (R-Wales), Lyford, Rep. Kimberly J. Pomerleau (R-Standish), and Rep. Joseph F. Underwood (R-Presque Isle).

This bill has currently been tabled in the Senate as unfinished business, so it is not yet clear when lawmakers will again be considering this legislation.