GOP lawmakers are looking to reinstate the property tax stabilization program for Maine’s older homeowners that previously had been repealed after just one year.
Referred to the Taxation Committee Tuesday, LD 1144 was sponsored by Sen. Jim Libby (R-Cumberland) and cosponsored by Sen. Bruce Bickford (R-Androscoggin) and Sen. Trey Stewart (R-Aroostook).
Originally introduced in 2022, this program allows eligible seniors to stop their property tax bills from increasing year over year, locking in the cost as of the preceding tax year.
Should this law be approved, seniors would be able to apply for the program starting with the 2026 property tax year, meaning that their taxes would be frozen at 2025 levels.
In addition to simply reviving the program, the language proposed by Sen. Libby also introduces two key changes to the law.
This new bill would limit the stabilized value of a senior’s home to $900,000, meaning that for homes assessed above this threshold would only receive stabilization benefits on the value up to $900,000.
It also specifies that municipalities may recover administrative costs from the state, in addition to the lost revenue accrued as a result of the stabilization.
A public hearing has not yet been scheduled for this bill, but one can be expected at some point in the near future.
Click Here for More Information on LD 1144
When this program was first introduced, it was estimated that stabilization would cost taxpayers statewide millions of dollars, with costs 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 was initially allocated from the General Fund to cover the cost of municipal reimbursements for fiscal year 2023-24.
Democrats in Augusta have also sought this year to bring back a version of the defunct property tax stabilization program for Maine’s senior citizens, albeit with significant changes.
Unlike LD 1144, their bill would allow municipalities to impose a one percent sales tax on prepared food and living quarter rentals to offset the cost of stabilization.
To adopt this tax, local residents would first need to approve of it at the ballot box.
Independent of this, local legislative bodies would be able to decide whether or not to adopt a property tax stabilization program in line with the parameters laid out in the proposed law.
Municipalities would not be required to adopt either of these programs.
These aren’t the only property tax relief bills that have been introduced so far this session, as a number of other proposals have been brought forward that would increase Mainers access to a greater degree of property tax reductions.
This comes in the wake of many homeowners experiencing sticker shock when opening their annual property tax bills, with many finding double-digit increases over previous years.
From higher rates and higher valuations to decreased exemptions and stretched household budgets, Maine residents — especially those with fixed-incomes or lower incomes — are getting squeezed.
Considering Maine already has the fourth highest tax burden in the country — and the highest property tax burden of any state — Mainers are feeling the property tax pinch more than ever.
The Maine Wire received numerous messages from Maine taxpayers in towns from Gray to Newcastle to Carthage reporting dramatic property tax hikes reflected in their FY25 bills.
While rising budget costs are often to blame for more expensive property tax bills, many of these increases appear to be the direct result of revaluations that have been conducted in response to the changes that have taken place in Maine’s housing market.
[RELATED: Sticker Shock — Maine Homeowners Burdened by Property Tax Hikes Following Recent Revaluations]
Many of the Democrat-led bills that look to address this problem by directly lowering the amount of property taxes owed by homeowners do so by increasing the homestead exemption.
Currently, the homestead exemption allows eligible homeowners to take $25,000 off the tax assessed value of their home.
While some legislation looks to increase the exemption only for particular groups — such as seniors or low-income homeowners — others would raise its value across the board.
One proposal, for example, would nearly quadruple the value of the homestead exemption by 2033, bringing it to a total value of $95,000.
After that point, its value would continue to increase annually in accordance with the cost of living.
[RELATED: Lawmakers Propose Nearly Quadrupling the Value of This Maine Property Tax Relief Program by 2033]
Another proposal sought to eliminate the requirement that someone be a homeowner for at least twelve months prior to being eligible to claim the homestead exemption.
Sponsored by Rep. Allison Hepler (D-Woolwich), this bill would allow taxpayers in Maine to benefit from the exemption regardless of how recently they became a homeowner.
Lawmakers in the Taxation Committee, however, can be expected to be divided with respect to this proposal, meaning that it will likely be up to legislators on the chamber floor to decide whether or not advance this bill.
That said, the Committee’s vote has not yet been finalized, so this could theoretically change in the coming days.
A bill introduced by Sen. Joe Baldacci (D-Penobscot) would have allow properties held in non-revocable living trusts to be eligible for the homestead exemption, whereas current law only allows homes owned by the applicant or a revocable living trust to qualify.
The Taxation Committee voted unanimously Tuesday, however, to recommend that this legislation Ought Not to Pass, meaning that unless extraordinary and bipartisan action is taken by lawmakers, this bill will not be considered further this session.
Republicans have also introduced legislation this session aimed at amending the homestead exemption, albeit in a less dramatic manner.
LD 658 — sponsored by House Minority Leader Billy Bob Faulkingham (R-Winter Harbor) — would immediately double the value of the homestead exemption to $50,000, effective for the tax year beginning on April 1, 2025.
A public hearing for LD 658 has now been scheduled for Wednesday, March 19 at 9:30am in State House Room 127. Testimony may also be submitted online at www.mainelegislature.org/testimony.
Of course Maine has to do something! Taxing someone that has paid their property faithfully for 60 years out of their home is wrong, coastal communities should be first, C’mon man!
And then there is the decision of Portland to have taxpayers outside of Portland to pay 30% of their Homles illegal population in shelters costs. Lowering the illegal population would lower the burden for all of the State’s taxed population. Why is this not being discussed?
Correction, it is 70% of Portland costs the rest of us taxpayers pick up!
All destined for failure. The legislature has already passed tax reforms increasing maximum property tax fairness credit another $500 this year to a maximum $2000. That alone is enough to break the bank of Mills without tax increases on all of is.
Problem is – Case 1 – Your mortgage company has a lien on your property and so does the local taxing authority using bond debt, primarily issued by the school district. This is double dipping on one asset and falls into the definition of racketeering. You never own anything. Case 2 – Your house is paid for but you are taxed on the “fair market value” which is unrealized income. They cannot tax “unrealized income” – federal constitution – again racketeering. They can only tax once at the time of sale and actual money changes hands. In either case YOU NEVER OWN YOUR LAND – thus you never own anything. Case 3 – If your mortgage is sold – and they all are – into a securitized investment – ONLY your equity remains attached to the land. The amount securitized is attached to a performing investment that is sold to investors (thousands of people in pools own your debt) – your property can’t be attached to both land and a security. Again, double dipping on the value of the asset – again racketeering.
“critics pointed out that the design simply shifted costs from municipalities to taxpayers statewide”, check out Portland’s illegal alien shelter and get back to us.
Any bets if AARP will support this?
All these solutions proposed are not natural economic solution and as such will fail.
natural solutions require inflow to match out flow. Money available needs to costs. To balance the the money in has to match the to the owner to run their life. So the government must accept the natural flow or control the the money people make and control the money people spend. their only choice they can really control is the out flow. and at this point they need to cut it.
I don’t know how they are getting away with these tax increases. If a town/county/school district needs a certain amount of money to function, they take the assessed valuation of all of the property in the town and multiply it times the mill rate to arrive at the amount of tax money that will be brought in in a given year. This should be equal to or slightly higher than the budgeted amount of expenditures.
If it is not enough, the mill rate is increased. And on a periodic basis, the properties in a town are re-evaluated which changes the tax income because the valuations go up (they rarely go down). And when these new assessments are increased by 10%, 20%, etc – these towns/counties/school districts get a windfall in tax revenue if they don’t adjust the mill rate down to equalize the tax revenue with the before re-assessment amounts needed to pay the budgeted costs. That is what they are supposed to do and not just take in all of the extra money that increases in property assessments created. They are not suppose to tax property owners for more than the town/county/school district budgets require. And budgets in most Maine towns are supposed to be approved by the voters before they go into effect. For any increases or decreases.
So how are all of these towns getting away with re-evaluating property values (upwards) and keeping the excess tax money they now collect without equalizing it to the actual budget? This is wrong but this is what is happening.
Recover administrative costs from the state? And lost revenue from the plan?
AYFKM?
Property Taxes are the twin of Adjustable Rate Mortgages. The applicable tax rate is calculated every year once the town calculates how much it wants to take from rate payers. The administrative costs and lost revenue terms are meaningless; they are just part of the revenue demand, and will be captured in the new mil rate computation.
We have no right to demand additional revenue sharing from the state for this purpose. And the Statehouse idiots should be clear on how these things work.
The state now gets involved in Dog License requirements. Are the towns now going to look to recover the admin costs for Dog Licenses from the state?
BTW, if I recall correctly, Senators Libby and Bennett were the two turncoats that put forward the bill to repeal the stabilization after one year, because it “cost towns too much to administer.”
That alone added them to the top 10 in Augusta Legislature BS’ers and back stabbers.