The Maine State Legislature recently passed a bill
dealing with predatory mortgage lending, but has deftly side-stepped
the more devastating problem of predatory real estate taxation, which
continues to plague all homeowners in Maine. Residential property tax
reform is a human rights issue. It affects every homeowner in the
state– Republican, Independent, Democrat, rich and poor. This is one
issue where party politics should not drive the debate. Let’s unite as
a caring people of Maine and get on with the job!

    The predatory property tax of this state, through
constant revaluations, has taxed many people far beyond their ability
to pay, forcing them to sell and lose the sacred space of their homes.
It has been unfair to all, but mostly to people who live on or near the
water. Many fishermen who have lived on the water for many years have
been forced to move away from their base of operation. Others who have
lived in family homes for generations have been forced to sell, and
islanders have sought secession to become independent and escape the
trap of inordinate taxation.

    While we appreciate the attempts to provide the
circuit-breaker program as relief, this program is very inadequate and
in no way compensates for the unfair reassessment of property taxes
when no income is earned.

    Not a wealthy person, I was fortunate enough to buy
property on the water at a price I could afford 27 years ago.
Revaluations have now pushed my property assessment to more than 10
times what I paid for it, resulting in an almost 50 percent of my
income going to property taxes. Needless to say, this is a huge burden
in my retirement years. Many of my neighbors are also gravely impacted.

    The governor is right when he calls for an amendment
to the state constitution (LD 276) to freeze our unjust revaluations.
Some amendments to this bill need to be made on a number of counts to
make it fair for all residential and business property owners, so let’s
unite as a caring people of Maine to get on with the job!

    The governor’s plan deals only with the land that is
purchased, and does not include the building. This should be changed to
make the entire parcel subject to the freeze. If a homeowner needs to
expand his house to accommodate a growing family or to make an in-law
apartment or improve his living facility in any way, that should not be
taxed until the property is sold. Such improvements should be
considered an investment in the future and any monetary gain at the
time of sale would be recouped by the state in the transfer tax. In the
meantime, the homeowner is improving his own property, which enhances
his neighborhood. He is giving employment to many construction workers
who pay taxes to the state. He is also paying state taxes on all the
materials used to improve and expand his home– all of which makes the
wheels of the economy turn. The investment in the improvement of his
home will increase the taxable value when he eventually sells and it’s
a win-win situation for all concerned. This is no different than
investing in the stock market, where appreciation is not taxed until
profit is realized at the time of sale. Surely our homes– our sacred
spaces– should be treated as fairly as stock. For most people of low or
moderate income, the safest and best investment they can make for their
retirement years is their home. To hinder that opportunity through an
unjust revaluation tax system is simply not fair.

    The above amendment would also eliminate the cost of
keeping personnel on municipal staff to constantly monitor and reassess
taxes based on whether someone is installing another bath to
accommodate the four children in the family or any other added feature
a family might need. Let’s enhance the life of all our people by
letting them improve their properties to their hearts’ content without
being constantly monitored and taxed for any improvement, knowing that
our neighborhoods are being enhanced and improved, making the State of
Maine an even more wonderful and desirable place to live and own a home.

    Relieving high residential property taxes will
require other tax adjustments. The Brookings Institute report pinpoints
Maine’s unique beauty and sense of place, making the state a jewel in
which to live and to vacation. Maine is a huge state geographically,
with only a small population to develop and support it. Hundreds of
thousands of tourists pour into our state to vacation and partake of
our amenities throughout the year. We are glad to have them come, but
they need to help us pick up the tab on developing and maintaining the
amenities they enjoy. Our lodging and restaurant taxes are far below
other states, many of which are 10 percent. We accept those higher
taxes in those other states when we travel and our tourists would do
the same. The restaurant and lodging industries should not fight this.

    Increasing our state sales tax as it now is to six
percent would generate a lot of revenue. We had a six percent sales tax
before and it was workable. We don’t need to add the frustrating burden
of state taxes on many small service industries that are barely making
it now. “Nickel and diming” people on every little service they get
would be a frustrating burden on the rank-and-file people, especially
low-income people who need hair cuts, having their pets groomed, lawns
mowed and all other categories that have been thrown into that mix of
soup. Many low-income Mainers have to work two or more jobs to make
ends meet. Why should they be taxed on the small services they need?
And why should these service providers, many of whom are also barely
eking out a living, have the headache of assessing and reporting taxes,
when a one percent increase in the general state sales tax would solve
the problem. The one percent increase would generate considerable
income from high-ticket items the wealthy buy and hurt no one. A six
percent sales tax is far below the average sales tax charged by other
states and the general state sales tax can continue to exclude basic
food and other necessities to protect the poor.

    Many states allow municipalities to assess an
additional one percent sales tax in order to stabilize their
infrastructure. This would greatly help our municipalities in rolling
back property valuations to a manageable level for homeowners who have
been severely impacted by the current unfair revaluation system. Some
states have encouraged municipalities to have separate town and school
taxes to more effectively monitor municipal spending.

    Increasing the “sin tax” on cigarettes and alcohol
is appropriate. It helps control disease generated by these products,
reducing costs for our healthcare system. People have a choice whether
or not to buy these products.

    States in the nation that have been able to maintain
balanced budgets in the face of greatly reduced federal funding have
placed a tax on the products of companies exporting a state’s natural
resources, such as minerals, lumber, etc. Maine is not. For example,
taxing an out-of-state corporation that gleans huge profits from
exporting one of Maine’s very special natural resources– Poland Spring
Water. We need to follow the example of other states. If Nestle doesn’t
want to be taxed, let the state take over the operation (we have people
who are trained to run the business) and make Poland Spring Water a
public utility– preserving our control over our valuable aquifers and
having all of the profit for our many necessary programs.

    Regarding Maine’s state income tax laws: why is
there a proposal to reduce the top rate for the wealthiest of our
population when we are desperately trying to develop a workable budget
for Maine? Income taxes are based on one’s ability to pay. We all need
to share the burden according to our means. Tax reform is not an easy
task, but it has never been more necessary than now. The common good
for all needs to be the common denominator in the process. Those who
have more should pay more; those who have less should pay less. This is
the only democratically fair and right thing to do in order to help all
citizens in Maine achieve their fullest potential.

    We also need to take a very critical look at any
excessive government spending, both at the municipal and state levels.
The regionalization of school administrations was one big step in the
right direction.

    I hope our legislature will evolve a new taxation
program that will be fair to all of our citizens and the Brookings
Institute report proposed: expand the tax base to include a significant
contribution by the out-of-state vacationers and visitors who come to
partake of all the wonderful amenities Maine offers.

–Ruth Taylor, South Portland