For at least the third successive year, Governor Baldacci and several legislators are pushing to exempt much of the personal property tax that municipalities throughout the state rely on to support local services. Generally, personal property is classified as property with value but not considered real estate.
Creating exemptions to eligible businesses means different things to different communities. If you live in a community that is only moderately affected by this measure, the losses will be moderate. If you live in a community with a heavy industrial or commercial base, the losses will be catastrophic.
The exclusion of this tax is being perceived by the governor and some legislative leaders as being the salvation of Maine’s economy, the cost of which will be placed on the backs of Maine citizens. While businesses like this idea, their real concerns are focused on energy and regulatory stability.
What bothers many municipal officials is that we have been left out of discussions on this issue from the start of this ill-conceived idea. Offers were made to jointly study this issue only to have them rejected. A few weeks ago, at the last minute, the Maine Municipal Association was asked to assemble a working group of local officials to offer input concerning this issue. We look at this 11th hour invitation as a cursory attempt to pacify municipal officials.
Additional negative impacts will result if this bill is passed. Besides the direct tax losses Westbrook and others will experience, the base cumulative property value of these towns will gradually decrease.
Contributions to school districts and county government are predicated on a state established base property value of each community. When one community loses value, a shift occurs in the other communities to compensate for that loss. The same applies at the county level where smaller rural communities will pay a greater share of county government costs.
Facing a recently approved and expensive bond issue to replace a century-old jail, residents of Somerset County will not look favorably upon yet another tax burden or the state leaders who are responsible for bringing it about.
LD 1660 is not a municipal issue. cities and towns do not pay taxes. Cities and towns collect taxes to support services for their citizens. This bill affects real people – families, single people, the young and the elderly will all bear some of the burden of this exemption. There is no way around this fact and we know that we cannot stake our future on a promise of full reimbursement by the state.
Philip M. Tarr
Skowhegan Town Manager
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