Here’s exactly how much Gov. LePage’s tax cuts for the wealthy would raise your property taxes

Here’s exactly how much Gov. LePage’s tax cuts for the wealthy would raise your property taxes

Governor LePage’s budget proposal offers tax breaks worth $23,000 annually to Maine’s 1%, while asking homeowners to pay an average of $300 more in already historically-high property taxes. The budget proposes elimination of the homestead exemption for Maine homeowners under the age of 65. The exemption provides vital relief from property taxes for more than 300,000 Maine families every year, of whom approximately 213,000 would be affected by the budget proposal.[1] You can examine the impact of the homestead exemption repeal on Maine’s communities in the interactive graphic below.

 

The value of the homestead exemption varies by town, and depends on a town’s property tax rate (also known as the ‘mil rate’). In 2017, those who qualify receive a reduction of $20,000 in the taxable value of their home. According to Maine Revenue Services data, the average property tax rate in 2015 was 15.64 mils ($15.64 per $1,000 of property value), which values the homestead exemption at 15.64 x 20 = $312.80. For residents of a town with a property tax rate of 12 mils, the exemption is worth $240 annually; for the residents of a town with a property tax rate of 20 mils, the exemption is worth $400 annually. Towns with struggling economies tend to have higher tax rates to compensate for the reduced property values and higher demand on services. The highest mil rates in the state can be found in towns like East Millinocket, Waterville, Lewiston and Eastport. The repeal of the homestead exemption would therefore have a greater impact on residents of those communities, where residents already feel pinched.

The governor’s proposal to cut income taxes for wealthy Mainers while raising property taxes for homeowners under the age of 65 is a step in the wrong direction. It shifts more costs onto low- and middle-income families already stretched by rising costs and stagnant wages. It also makes Maine’s tax system even more unfair than it was before. Wealthy families already pay a smaller share of their income in state and local taxes than everyone else. This proposal distorts that picture even more.

Governor LePage’s upside down tax plan is not the recipe for a thriving economy that works for everyone. It undermines our ability to invest in a stronger workforce, help young families succeed, build modern infrastructure, provide services our communities rely on, and address the priorities that benefit all Mainers now and in the future. Mainers, especially those who are working hard to make ends meet, deserve better.

Public hearings on the governor’s proposal to cut the homestead exemption are scheduled for Monday, February 6 at the Maine State House in Augusta. Members of the public are strongly encouraged to testify and share their concerns with lawmakers.

[1] Maine Revenue Services data. Total homestead exemptions claimed in fiscal year 2015.  US Census Bureau data indicates that 69% of householders in owner-occupied housing in Maine are below the age of 65.

Photo via Andi Parkinson.

About author

James Myall
James Myall 15 posts

James is a policy analyst for the Maine Center for Economic Policy. He holds a master’s degree in ancient history and archaeology from the University of St. Andrews in Scotland and is a candidate for a master’s degree in public policy and management from the University of Southern Maine (USM). He has previously served as coordinator of the Franco-American Collection and an adjunct professor of American history and government at USM, Lewiston-Auburn College.

Comments

You might also like

education

Ben is back, impeachment fails, minimum wage referendum succeeds, and lots more

On this episode of the Beacon Podcast, Ben Chin and Mike Tipping discuss the submission of signatures to put a minimum wage increase on the ballot, all the other campaigns

municipal

Mayor Strimling vows to protect subminimum wage increase in Portland

After losing a battle over the minimum wage at the ballot box by double digits in November, Maine Governor Paul LePage is now attempting to roll back parts of the

democracy

Maine Senate Republicans defy Clean Elections referendum, protect offshore tax havens

The Republican-controlled Maine Senate on Wednesday voted along party lines to protect a corporate tax loophole that allows large, multinational corporations to hide millions of dollars in offshore bank accounts,