Democrat lawmakers in Augusta have introduced a bill that would impose a three percent sales tax on hotel rentals in order to increase the amount of state funding available for public schools.
If approved, an additional three percent sales tax would levied on the cost of renting a room in a hotel or other lodging place beginning on January 1, 2026. Under current law, hotel rentals are already subject to a nine percent sales tax, also known as a lodging tax.
The supporters of the proposal intend for the additional funds to be “credited directly” to the Maine Department of Education to fund school construction, as well as K-12 public education more generally.
Nothing, however, would prevent future legislatures from re-purposing the funds raised by the tax, as state revenue streams cannot be permanently earmarked.
The new hotel tax would be collected in addition to the 9 percent sales tax already imposed on the rental of lodging in Maine, raising the total tax on a hotel rental to a total of 12 percent.
LD 225 — An Act to Reduce Property Taxes and Finance Public School Construction and Education Through a 3 Percent Sales Tax on Hotel and Lodging Place Rentals — was sponsored by Rep. Michael F. Brennan (D-Portland).
Cosponsoring this bill are Sen. Joe Rafferty (D-York), Rep. Daniel J. Ankeles (D-Brunswick), Rep. W. Edward Crockett (D-Portland), Rep. Janice S. Dodge (D-Belfast), Rep. Lori K. Gramlich (D-Old Orchard Beach), Rep. Marc G. Malon II (D-Biddeford), Rep. Anne-Marie Mastraccio (D-Sanford), Rep. Matt Moonen (D-Portland), and Rep. Kelly Noonan Murphy (D-Scarborough).
Click Here to Read the Full Text of LD 225
Public education in Maine is funded in part by local property taxes and in part by the state government. In 2004, Maine voters approved a ballot referendum requiring the state to pay 55 percent of the cost of local schools.
But that funding level was never met — and was a perennial source of political strife in Augusta — until Gov. Janet Mills’ (D) administration was able to use federal COVID-19 assistance to meet the goal as part of her 2022-2023 budget proposal.
The exact amount of funding received by each school administrative unit is determined by the Essential Programs and Services (EPS) model, which helps to calculate how much funding each district needs from the state in order to ensure that students have access to certain necessary educational services.
To cover the remaining costs of public education, school districts turn to local property tax revenue.
In addition to education, property taxes also allow municipalities to pay for services such as police and firefighters, as well as any other programs and projects that are not funded by the state.
Local schools are, however, the far largest component of property tax expenditures. According to the Maine Municipal Association, the average locality in Maine used around 68 percent of its property tax revenue for education-related expenses as of 2016.
[RELATED: New Report Analyzes the Decades-Long Decline of Maine K-12 Education]
Over the past year, voters throughout the state began more closely scrutinizing their local school budgets. Some municipalities even saw their budget proposals rejected two or three times by voters, forcing them to take additional cost cutting measures.
For example, Westbrook voters sent local lawmakers back to the drawing board last year for the first time in town history.
[RELATED: Westbrook Voters Reject School Budget with Nearly 16 Percent Property Tax Hike]
Legislators in Augusta have already introduced a number of other bills aimed at providing property tax relief to Maine homeowners, including a bipartisan bill that would nearly quadruple the homestead exemption over the next few years.
[RELATED: Lawmakers Propose Nearly Quadrupling the Value of This Maine Property Tax Relief Program by 2033]
Currently, the homestead exemption allows Mainers to take $25,000 off the total tax-assessed value of their homes. Under the proposed legislation, this would increase by $10,000 annually beginning in 2026 until it reaches a total of $95,000 in 2033.
At this point, the homestead exemption would continue to increase annually in accordance with the cost of living.
[RELATED: Maine Lawmakers to Consider Additional Property Tax Relief for Senior Homeowners]
A separate Republican-led proposal would provided targeted property tax relief to seniors, immediately increasing the homestead exemption to $75,000 for Mainers 65 and up.
If approved, this increased exemption would be applicable for the tax year beginning on April 1, 2025.
LD 225 has been referred to the Legislature’s Taxation Committee and will be the subject of a public hearing at some point in the weeks and months to come.
[RELATED: Maine Students Continue to Struggle Academically Post-Pandemic — 2024 Nation’s Report Card…]
The new proposed hotel tax may encounter more obstacles than would otherwise be expected as a result of resistance to higher taxes.
Although Maine taxpayers have made unprecedented increases to the amount of funding given to Maine’s public schools, these higher levels of spending have not translated into better performance among students.
The 2024 Nation’s Report Card revealed that Maine students are continuing to struggle academically post-pandemic.
The National Assessment of Educational Progress (NAEP) — commonly known as the Nation’s Report Card — has been used to gauge students’ level of academic achievement since 1969.
NAEP describes itself as “the largest nationally representative, continuing evaluation of the condition of education in the United States.”
According to Edunomics, a project of Georgetown University’s McCourt School of Public Policy, Maine’s public education funding has increased 71 percent since 2013 — far outpacing inflation — while NAEP test scores have decline precipitously.

In other words, despite Mainers spend more money on public schools, students continue to fall further behind their peers in other states.
Maine’s fourth graders are currently having an especially hard time in both reading and math, performing worse in comparison to both prior years’ scores and their counterparts nationwide.
Eighth graders in Maine also had a poor showing on the 2024 Nation’s Report Card, their scores remaining largely unchanged from last year and falling into the middle of the pack in comparison to similar students across the country.
Watch Maine Wire’s Alicia Farmer Interview Maine Policy Institute Research Fellow Jonah Davids on the NAEP Results:
Record spending –> Negative results.
— The Maine Wire (@TheMaineWire) January 30, 2025
The Mills administration's disastrous focus on "social-emotional learning" is failing Maine's kids. @AliciaMaeFarmer interviews @jonahdavids1 on what recent test scores reveal for Maine's floundering education system: pic.twitter.com/7kVWnsRvi1
The Dept of Ed. Is more concerned about Trump policy than student learning.
That is the wok polices of the Democratic leadership in Augusta and DC.
From the questions ask at cabinet level appointees’ hearings, to the cold hard declining test scores of our students reflect the leadership in our government.
Well, the streets will be less full this summer and our students will still have low test scores. Keep sending Trogons to the middle east.
wierd how alot of the hotels are full of illegals being paid for by tax dollars. now they want to tax the hotels for more tax dollars? i wonder if they emptied the hotels if it would somehow lower school costs…. weird idea huh?.
Democrats plan to dumb down American children for easy indoctrination of their twisted ideologies
and weaken our communities, states and nation. Early 1990’s Maine kiddos ranked 1st and 2nd nationally in math and reading. 2022 Maine was 36th!
Stupid spending on education does not improve the students outcome. Stop the stupid spending Janet and figure this out.
Printing money does not cure poverty and printing diplomas does not cure stupidity.
I say why not 20 fold. Maine is for mainers. Screw the tourists, not like we need their money, oh wait…
Oh I get it. mills fills hotels with immigrants, state raises taxes on hotels, taxpayers foot the cost, mills use taxes to bring more immigrants to maine. Do you get it yet?
Welcome to Vacationland where you can stay for 5 days and pay for 6!
An additional benefit of mass felon deportations is hotel nightly room rates decreasing as the government pays the top nightly per room rate to house illegals which has inflated the price citizens pay per night. – These damned Democrats skillfully try to offset savings citizens might encounter. There is absolutely no relation between increased spending education spending and better education.
And look who becomes governor and who becomes education commissioner in 2019: Mills and Makin. A ship’s as good as what’s at the helm:
Take away cell phones and start teaching math like they used to, make kids read like they used to. In 20 years as a shop foreman I’ve had to teach people to use tape measuresrs, do basic math and read.
The problem is parent and teachers accountability. And keeping a kid back a grade that wasnt ready was normal when i was young. Now they worry more about esteem than ecucation.
Accountability is the issue not money.
They never learn. They must be products of the public school system.
Politicians have been throwing more and more money at schools for decades claiming it will make things better.
Has it worked?
Obviously not.
When DOE commissioner Makin publicly proclaims that social and emotional education is the state’s priority in our schools, it’s no wonder the rankings stink. But wait, throw more of OPM at it for the SOP fix. You can’t pile stupid any higher.
FIRST – Reduce the cost of EDUCATION and direct funds to EDUCATION, NOT so much on sports. I am 100% positive that we could reduce the cost of education by at least 25%. What are we offering that is not being used after graduation? How do we reduce the energy costs at the schools (FYI – It ain’t solar – The ROI on that is at least 15 years)? Get back to the basics, reduce admin costs, reduce transportation costs, stop feeding every kid for free and so much more – small gains here and there add up. You need to hire outside consultants to guide the process using staff knowledge to find the savings – A little up front $$$ can save $$$$$$$$$ in the future.
Recall Janet….if we should get rid of anything…
Tax the NEA to pay for the sub par education/teachers. And then maybe tie any increases in education to a better ROI., like the real world.
So, schools have, on average, budgets that are 23% over EPS. Let’s start with eliminating that across the board for 5 years. Give taxpayers a break and re-focus Education, on educating young people in Reading, writing, arithmatic, thinking critically, and the trades.
Get rid of “counselors” and add more STEM teachers. If your kid has an issue consult your mom & dad, your pastor or rabbi. .gov is not required.
Gobankrates.com lists maine as having the 5th highest living wage requirement for a family of four in the US. Hawaii, Alaska, NY and Mass were the highest. Be sure to thank janet and her stooges running this state during the next election.