New property tax freeze for Maine seniors will cost millions
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AUGUSTA, Maine — A sweeping new software that aims to freeze property taxes for Maine seniors faces large queries from the regional officials who will have to implement it about two weeks right before it requires result.
The below-the-radar measure could have a big influence in the nation’s oldest state by median age and the one particular with the next-best homeownership charge. Practically 80 percent of Mainers aged 65 and older owned homes in 2017, according to census facts. It signifies that much more than 200,000 people could see assets tax payments frozen under the software, with the state building up the difference to the municipalities seeing minimized tax payments.
But towns and towns do not know how lots of citizens will be eligible for a program that Mainers will have to opt into at municipal places of work each individual year. It will develop more pricey more than the upcoming quite a few years as the population ages and as extra men and women signal up for a new plan that arrives with no cash flow boundaries and few other restrictions.
The condition has only focused a scant volume of funding that will be necessary so considerably, which is just just one of the motives some nearby officials are apprehensive about implementing it.
“We could get among 500 and 1,000 purposes, and we’re a pretty tiny business and have other items to do,” claimed Kerry Leichtman, the tax assessor for Camden and Rockport. “So it’s likely to impression us administratively for pretty a whilst.”
The home tax, which mainly funds neighborhood governments, has extensive been targeted by policymakers in element for the reason that it is just one that falls hardest on lower-profits men and women. At the very least 6 states have tax freezes for seniors or other people, according to the Countrywide Convention of Condition Legislatures.
This application, which was sponsored in the Legislature by Sen. Trey Stewart, R-Presque Isle, is a novel a single. Qualified Mainers will have to be 65 or older and have skilled for the Homestead Exemption for at least the previous 10 many years. There are no money restrictions and Mainers ought to implement by Dec. 1 of every calendar year to have tax obligations frozen at the past year’s level.
It also allows frozen payments to be transferred between cities and cities. If a senior moves from a household in a person city to a increased-price house in a next town, they would spend the amount of money on their previous house. The 2nd town would bill the state for the big difference amongst that decreased payment and what the regular 1 would be for the senior’s property in that city.
When the evaluate was released in 2021, equally the administration of Gov. Janet Mills and the Maine Municipal Association said the measure could violate the Maine Constitution, which claims assets taxes need to be “assessed similarly.” Stewart stated the measure was encouraged by a 70-yr-aged constituent who could not bear raising taxes on a household camp.
A legislative committee opposed the invoice, but it stalled for virtually a calendar year. Then, legislative Republicans revived it as component of a $1.2 billion paying out bill passed in June. Lawmakers promptly despatched it to the Democratic governor, who allowed it to pass without her signature in a 12 months when she faces a reelection challenge from former Gov. Paul LePage.
Lawmakers only had to present $315,000 originally for the condition to employ the program. Next calendar year, they would have to get started masking reimbursement expenditures for it to run. The Legislature’s fiscal office expects complete application charges to increase from $2.2 million in the first yr to $14 million in the 3rd 12 months as tax assessments transform or others be a part of the system.
The program goes into outcome on Aug. 8. Just in advance of that, the state’s price range office designs to release apps and rules, spokesperson Sharon Huntley reported.
Talks are previously below way at the municipal association to force lawmakers to overhaul the law, stated Kate Dufour, the group’s lobbyist. That could be a tricky dialogue due to the fact the plan is so generous.
Stewart downplayed the problems of some nearby officials, noting that assessors he has talked to see the law positively. He downplayed considerations of generous rewards getting offered to folks who transfer across town strains, declaring Maine seniors are much more probable to downsize and that the Legislature could correct any difficulties coming up early next 12 months.
“Let’s see what the info says,” he claimed. “We’ll get by means of this for a calendar year.”
Leichtman reported his towns will consider measures to make guaranteed just about every qualified particular person is knowledgeable of the software. However, he fears that it will be “impossible” to put into action owing to inflexible tax computer software and possible money-circulation troubles. When initially residence tax installments are usually because of Oct. 15, the legislation enables the condition to reimburse towns and cities as late as Jan. 15.
“This is what takes place when decisions are produced in haste,” Dufour claimed.
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