2017-04-06 / Editorial

Reducing the tax burden is on the minds of many

Beyond the Headlines
by Rep. Justin Chenette

The number one issue I heard throughout the last campaign was the rising burden of property taxes and the need for relief. Increasing property taxes is the most regressive way to raise revenue to pay for essential programs and services. Simply put, it impacts hardworking families and those on fixed incomes the hardest. It can literally tax people out of house and home.

While property taxes are determined by a particular municipality, a town or city government, the state impacts it by creating what I would call a manufactured crisis for towns and cities driving them to raise either fees associated with local services or raise property taxes. Those are the only tools municipalities have. They could also make cuts, reduce their budgets, including schools, but many across our state have already cut down to bare bones. Increasingly, there isn’t much left to cut before you start impacting the quality of service.

The state continues to pass unfunded mandates and additional requirements on towns and cities that places more of the cost of government on the local level. This is on top of the state deciding not to pay for previously paid for items; a direct cost shift. An example would be the governor’s proposal to eliminate superintendent expenses, which totals $40 million. Guess who pays if the state refuses to cover it? You guessed it. Property tax payers.

Education funding is another example. We have yet to reach the magic number of 55 percent, a percentage of what the state is supposed to cover for the overall cost of education. We’ve been hovering around 47 percent, but keep in mind this gap represents more than $150 million. The more the state picks up, the less local school districts have to. We’ve seen this play out in our own district with talk of cuts to staffing.

Let’s not forget municipal revenue sharing. The promise to municipalities was 5 percent of the total revenue the state collects in sales, corporate and personal income taxes would be sent back to their communities to pay for things like the fire and police departments. Only 2 percent is distributed back. All of this compounds the situation of crafting local budgets and figuring out how to pay for what we expect local government to pay for.

As the Senate Democratic lead on the Taxation Committee, I am fighting every day to ensure we have a more progressive tax policy and a more responsible state budget.

While generally speaking, the nature of formulating tax policy lends itself to more partisan debate, there are some positive movements on this front in relation to the issue. Recently, my committee voted unanimously to reject the governor’s proposed cuts to the Homestead Exemption.

The proposal called for cutting off the eligibility of the exemption for anyone younger than 65. This would have been a direct property tax hike for many families across the state. The Homestead Exemption provides a reduction of up to $20,000 in the value of your home for property tax purposes. To qualify, you must be a permanent resident of Maine, the home must be your permanent residence, you must have owned a home in Maine for the 12 months prior to applying and an application must be filed on or before April 1 with the municipality where the property is located.

Many might not even realize that they already receive the exemption. It is something you apply for just once and then it is automatically calculated and directly applied to your local property tax bill if you qualify. At the bottom of your tax bill you should see a little blurb about its inclusion.

On the other side of the coin, we unanimously endorsed the governor’s proposal to triple the Property Tax Fairness Credit.

The Property Tax Fairness Credit is the latest incarnation of the Circuit Breaker program, which is needs based and an application is required. It is based on your ability to pay based on the percentage of your property taxes as it relates to your income. I have a bill to help fund a further expansion of the amount and the eligibility of this tax credit by syphoning off at least 1 percent of any state budget surplus dollars.

It’s important to note that there are also many exemptions for specific populations. Some communities like Saco have their own programs to help reduce the burden. The city of Saco has the Senior Citizen Tax Workoff Program. Individuals must be 60 years old, must own their own home and reside at that property. Income limits for the program are $38,300 for one person households and $43,800 for two person households. Upon completion of 100 hours, participants will receive a credit of $750 toward their Saco property taxes. A little goes a long way.

We are in the process of debating many new exemptions pertaining to certain groups of people including veterans and seniors. I think supporting vulnerable populations is something that should transcend party affiliation and so far, we’ve been moving in the right direction. Hopefully that goodwill will continue as we head into the more controversial parts of the governor’s budget, like providing income tax breaks for the very top of the income scale and a raising of sales tax on items not previously taxed such as haircuts, gym memberships and snowplowing. Tax cuts for the wealthy are not top priorities for our community and is not why I was sent to the state Senate. Instead, protecting seniors from losing their homes and keeping young middle class families here to live and work are my top goals when it comes to crafting better tax solutions.

Justin Chenette is serving his first term as the youngest senator in the Maine Senate representing Saco, Old Orchard Beach, Hollis, Limington and Buxton. He previously served two terms in the Maine House of Representatives. Outside the Legislature, he is owner of Chenette Media LLC, a multimedia public relations company, and is the president/ CEO of the Saco Bay Center of Civic Engagement, a 501c3 nonprofit service organization.

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