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Service Charge Proposals Have Got Our Goat

by Jennifer Gray

There’s a lot of buzz about high property taxes and some have the misguided idea that taxing nonprofits is the solution. Details on the Governor’s service charge proposal are now available, and the Maine Municipal Association’s related bill isn’t printed yet, but is expected soon. We are gearing up to vigorously defend the nonprofit sector!

Service Charge Proposals That Have Got Our Goat

Photo Credit: Peace Ridge Sanctuary, Member Since 2015

The Governor’s service charge bill–LD 1521, An Act to Amend the Property Tax Laws–is now printed. It’s sponsored by Rep. Gary Hilliard and cosponsored by Rep. Bruce Bickford (MANP opposes). Both of them serve on the Taxation Committee.

  • Part A specifies that holding land primarily for conservation or public access purposes is not a benevolent and charitable purpose, which is a condition necessary to obtaining an exemption from property tax. This Part allows a land trust organization to enroll land owned by it in the open space tax law program, which would provide up to a 95% reduction in the assessed value of that land as long as certain conditions are met. This Part also removes the 15,000-acre limit on the size of land that may be enrolled in the open space tax law program.
  • Part B expands the authorization for municipal assessment of service charges for certain municipal costs against certain property exempt from property tax to remove the exemption for student housing and parsonages and to remove the limit on application of the charge to residential property used for rental income. The service charges may be levied only against an owner that has total real estate assets in the municipality with an assessed value of $10,000,000 or more. The existing cap of 2% of the gross annual revenues of the institution or organization is retained.
  • Part C reduces the rate of the excise tax imposed on motor vehicles for the first and 2nd year from 24 mills to 18 mills and 17 1/2 to 16 mills, respectively; and increases the excise tax for the 3rd, 4th, 5th and 6th year from 13 1/2 mills to 14 mills, 10 mills to 11.5 mills, 6 1/2 mills to 10 mills and 4 mills to 6 mills, respectively. After the 6th year, the mill rate reverts to 4 mills.

Property Taxes

LD 727,  An Act to Protect the Tax Base of Municipalities by Removing the Property Tax Exemption for Land Held for Conservation or Public Access Purposes (Stetkis) (removes exemption for land trusts)(MANP opposes)

  • Committee voted 8-1 ONTP/OTP* with Rep. Bickford voting in support.

LD 1121, An Act Regarding the Exclusive Use of Tax Exempt Property (J. Kinney) (incidental use)(MANP opposes)

  • Committee voted 7-1 ONTP/OTP with Rep. Pouliot voting in support of the bill.

LD 1076, An Act To Replace Municipal Property Tax Revenue Lost Due to Land Acquisitions under the Land for Maine’s Future Fund (Hanington) (state reimburse communities for loss of property taxes for new Land for Maine’s Future projects)(MANP opposes)

  • Committee voted UONTP

Transparency

LD 1435, An Act to Ensure Transparency in the Distribution of Federal Block Grant Funds (Jorgensen)(MANP supports) has been printed and referred to the Health and Human Services Committee.  It would require the Department of Health and Human Services to create a clear federal block grant fund spending plan that would need to be approved by the Appropriations and Financial Affairs Committee.

This week

  • LD 1289, An Act to Allow Voluntary Payments in Lieu of Taxes in the Unorganized Territory (Dill)(MANP supports) is scheduled for hearing Tues. at 1 before the Taxation Committee.
  • LD 1246 (property tax exemption for land with trails)(Stanley)(MANP is watching) work session Wed. at 10 before the Taxation Committee.

 

ONTP = Ought Not to Pass; OTP = Ought to Pass; UONTP = Unanimous Ought Not to Pass

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