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