Portland is Maine’s biggest city, with a population of 67,000 people. But that doesn’t count everyone who uses the city’s services.
It’s estimated that with all the people who come to work in the city every weekday, the population is more than 97,000. And the tourism industry says the city hosts 5.4 million visitors over the course of a year, adding an average of 15,000 more people a day. Tens of thousands come to Portland, and while there, they drive on the city’s roads, park on its streets, maybe throw away a sandwich wrapper or use a restroom, all while enjoying the protection of police and emergency services.
But the bill for those services is almost entirely the responsibility of the property owners of Portland and their tenants, resulting in some of the highest tax rates in Maine.
Every cent of sales, meals and lodging taxes collected in the city is sent to Augusta, with the hope that the Legislature will send some of it back in the form of revenue sharing. That expectation has not always been met, resulting in cuts to school programs, even in years when state education spending increased.
It’s time that Maine joined the majority of states that allow local governments to collect a sales tax to cover their expenses. A bill to allow municipalities to charge a local-option tax of as much as 1 percent will be before the Legislature when it convenes next month.
The bill is sponsored by Rep. Mike Sylvester, D-Portland, but Portland is not alone. Other service center cities such as Augusta, Lewiston and Bangor have to maintain infrastructure for a much larger number of people than the ones who pay taxes.
They are likely to be hosts to churches and government buildings that are tax exempt, and the more taxable property they have on the books, the less they receive from the state in school subsidy.
A small, local sales tax is a way to bring more money to the service centers without taking anything away from outlying communities.
Unfortunately, the tax has been considered a political impossibility in the State House because it’s unpopular with members of both parties who represent rural districts.
The argument usually gets bogged down because people who have to go to a service center to shop or do business will end up paying the tax without getting any of the benefit. But there are ways to stop that from happening.
For instance, Maine residents could be eligible for a credit on their state tax return to refund locally collected sales taxes.
Sylvester’s bill would require communities that collect the tax to distribute 15 percent of what they collect to outlying communities.
For the state to thrive economically, it needs its cities to be healthy. Most states get resources to the place they are needed with a local-option sales tax. Maine should too.
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