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are looking to reinstate the property tax stabilization program for Maine’s older homeowners that previously had been repealed after just one year.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.
