2017-02-16 / Editorial

What is the Homestead Exemption and why is it important?

Legislative Lowdown
by Rep. Martin Grohman

Under the Gov. Paul LePage administration, there has been a general reduction of key state revenues that your city council and school board have used to reduce the property tax burden on residents. This has forced an increase in property taxes. In an attempt to reverse this trend, a coalition of centrist Democrats and Republicans (including myself) in 2015 voted to increase the Homestead Exemption, which reduces the assessed value of your home and thus property taxes.

However, the governor has proposed in his latest budget to eliminate the Homestead Exemption for those younger than 65. I do not support this approach as property taxes are already too high for Maine people of all ages. I spoke to the governor about this personally last week and I think I was able to convey to him how harmful his proposal is to the hard working people in Biddeford. However, if you too are concerned about the shift away from state revenue sharing, I encourage you to share your thoughts by contacting the governor’s office at 287- 3531 or via the contact form at www.maine.gov.

If there is a silver lining in all of this, it is that it gives me a chance to talk about not just the Homestead Exemption, but also the Property Tax Fairness Credit and the Earned Income Tax Credit. The Property Tax Fairness Credit is a property tax abatement that even renters can apply for (based on income limits); and the Earned Income Tax Credit is a refundable tax credit for lower-income workers. In some cases, this credit, new at the state level in 2015, can reduce or completely eliminate the state and federal income taxes you owe. Also, the Earned Income Tax Credit is a “refundable” credit. This means that if you qualify and your credit is more than the taxes you owe, the IRS pays you money. I strongly suggest you determine if you qualify.

There are restrictions and exceptions to all of these programs and important details I have had to leave out to save space. None of these programs will find you, either – you have to apply for them. I am happy to help connect you with resources to do just that, including the free tax preparation assistance available from York County Community Action Center on York Street. That’s right – if you, or your household, made $54,000 or less in 2016, you can get your income taxes prepared for free by IRS-certified volunteer tax preparers. You can find out more about that program at www.cashmaine.org or by contacting me directly.

Rep. Martin Grohman (D-Biddeford) is serving his second term in the Maine Legislature. Outside the legislature, he is chairman of the Solid Waste Commission in Biddeford, and the owner of a small company called Hellocycle which does alkaline battery recycling by mail.

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