June 18, 2018
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Stagnant tax bases cause problems for Maine towns

The Associated Press

PORTLAND, Maine — After years of growth, municipal tax bases in Maine’s towns and cities appear to be stagnant at best, forcing local officials to raise taxes or cut spending as they prepare their budgets.

The assessed value of real estate has gone flat because of the economic slump, meaning municipalities can no longer count on growth to generate additional tax revenue.

State tax officials say the total statewide property valuation rose annually by double digits for most of this decade but growth trailed off in 2007.

Preliminary data coming in for 2008 show “small decreases” in town tax bases in the southern part of the state, said Mike Rogers, supervisor of municipal services for Maine Revenue Services, which administers the state’s tax laws. That downward trend seems to be worsening for 2009, based on real estate agents’ reports of slow sales and falling prices, he said.

Valuations also stand to be affected by the slump in commercial real estate, as some retailers go out of business and others abandon plans for new stores.

An even bigger impact could result from the closing of a large industrial plant that makes up a big share of a town’s tax base, said Michael Starn, communications director for the Maine Municipal Association, which offers professional services to local governments.

Some towns and cities may see more property owners appeal their tax bills, which could add to the budget woes.

In South Portland, the Chicago-based real estate investment trust General Growth Properties Inc. is seeking an abatement on the Maine Mall, which it bought in 2003 for $270 million. It claims the property was worth only $190 million three years later.

City Assessor Elizabeth Sawyer says a hearing is scheduled for next month. If the company’s appeal is successful, it would take a big bite out of South Portland’s valuation and its tax revenue.

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