Lawmakers on the Taxation Committee have unanimously rejected a Democrat-led bill that would have revitalized a now-defunct property tax stabilization for senior homeowners in Maine.
LD 559 — sponsored by Sen. Donna Bailey (D-York) — would have allowed municipalities to impose a one percent sales tax on prepared food and living quarter rentals and use the revenue to offset the cost of stabilizing the property tax bills for eligible homeowners who are 62 years of age and older.
Cosponsoring this legislation are Sen. Chip Curry (D-Waldo), Sen. Tim Nangle (D-Cumberland), Sen. Joe Rafferty (D-York), Sen. Cameron Reny (D-Lincoln), Rep. Victoria W. Doudera (D-Camden), and Rep. Holly B. Stover (D-Boothbay).
Municipalities would have had the option of adopting a higher age requirement, but they would not have been permitted to offer stabilization to anyone younger than 62.
Because this would inevitably result in a loss of revenue to municipalities, the measure would have granted them the authority to establish a one percent local option sales tax on lodging and prepared food.
The Taxation Committee unanimously recommended that this proposal be rejected by the full Legislature.
The bill was officially placed in the legislative files as “dead” on April 10.
Click Here for More Information on LD 559
Originally passed in August of 2022, the Property Tax Stabilization for Senior Citizens program was quickly repealed by lawmakers only a year later.
Intended to stabilize property tax bills for full-time Mainers aged 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 was initially allocated from the General Fund to cover the cost of municipal reimbursements for fiscal year 2023-24.
The now-rejected LD 559 was not the only effort in Augusta this year to bring back a form of this Stabilization Program.
Two Republican-led proposals concerning the program are still up for consideration as of this article’s publication.
For example, LD 1481 — introduced by Rep. Wayne R. Parry (R-Arundel) — looks to bring back the program with an income limit, making stabilization available only to households making less than $75,000 annually.
To qualify for the program, homeowners must be over the age of 65 and have owned a home in the state for at least twenty years, up from the ten-year threshold included in the original language.
Also, Parry’s bill looks to simplify the process for annually renewing the stabilization, allowing seniors to submit a written form indicating that the homestead is still eligible for stabilization.
Previously, seniors were required to fully reapply for stabilization every year.
The proposed legislation would also do away with the ability to transfer stabilization from one home to another. Instead, seniors would be able to receive a fresh stabilization for their new property.
Another group of Republican lawmakers — including Sen. Jim Libby (R-Cumberland), Sen. Bruce Bickford (R-Androscoggin), and Sen. Trey Stewart (R-Aroostook) — have also made a push to bring back the now-defunct stabilization program.
Under that bill, LD 1144, seniors would be able to apply for the program starting with the 2026 property tax year so that their taxes would be frozen at 2025 levels.
It would also amend the original program by limiting 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.
Public hearings have now been held for both of these proposals, but the Taxation Committee has not yet issued a recommendation for either bill.
<span class="dsq-postid" data-dsqidentifier="37991 https://www.themainewire.com/?p=37991">3 Comments
An upper cap limit on the value of a property would be much fairer than using one’s income as a go/no go gauge. This way, everyone over 62 or 65, who has owned a home in Maine for at least 20 years, would at least get some benefit out of it. Also, it is very difficult to believe that a benefit like this could have that much impact on the towns, cities and State budgets seeing as how, for my wife and I anyway, the benefit would only equal approximately what two tires for my car would cost. I mean, it isn’t as if I’m going out and buying a new Lexus with my prospect-fully new found money. The real answer to this taxation problem is to CUT BACK ON SPENDING you freaking idiots ! If in doubt, vote em out !!! Let’s make it happen starting in 2025.
How about no school tax portion for those over 65. Easy to administer, no income verification required.
The income limit of 75k is too high.A husband and wife on Social Security make more than this.