The middle class is getting hit hard by Maine’s regressive property taxes, and this is unfair. Mainers deserve a fair and balanced tax system.
Last winter, Gov. Paul LePage proposed a two-year biennial budget that would have raised taxes on Maine’s middle class. His budget would have shifted more than $425 million dollars of the tax burden to local communities and their property taxpayers.
When his proposal was released, all seven Presque Isle city councilors signed a letter asking me to oppose the governor’s budget proposal on behalf of the property taxpayers they represent.
I gladly opposed the governor’s budget. His budget would have unfairly burdened the middle class, small businesses, the elderly and the poor. The budget would have eliminated revenue sharing for two years, cut excise tax revenues for local roads and shifted teacher retirement costs to local communities. To maintain certain services, towns would have had to raise property taxes to cover the costs.
The governor also proposed the total elimination of the Homestead Exemption and the Circuit Breaker refund for those younger than 65. The Circuit Breaker refund puts money in the pockets of middle-class families. Many people depend on this property tax refund to make ends meet.
Fortunately, Democratic and Republican lawmakers were able to negotiate a better, bipartisan budget that restored many of the proposed cuts. Around two-thirds of revenue sharing was restored and we retained the homestead exemption and increased funding to Maine’s schools.
However, we could not get everything that we wanted. One difficult compromise was the elimination of the Circuit Breaker refund program, also known as the Maine Residents Property Tax and Rent Refund. The program was a refund of up to $1,600 available to single-person households earning up to $67,300 annually and multi-person households with incomes up to $89,700.
This refund will be partially replaced by a smaller, refundable Property Tax Fairness Credit of up to $300, or $400 for those 70 and older. In addition, those who have applied each year for the Circuit Breaker refund will need to wait until January, rather than applying any time after August.
A resident with income of $40,000 or less who paid property taxes on a home in Maine during the tax year that added up to more than 10 percent of Maine adjusted gross income, or paid rent to live in a home or apartment in Maine during the tax year that was more than 40 percent of Maine adjusted gross income, will be eligible for the credit.
Beginning in January, the 2013 Maine Individual Income Tax Form 1040ME will include a worksheet to calculate the Property Tax Fairness Credit.
For more information about the new Property Tax Fairness Credit, please visit maine.gov/revenue/taxrelief. You can also call Maine Revenue Services for help at 626-8475.
Presque Isle citizens and all others who might qualify are encouraged to apply for the Property Tax Fairness Credit. Normally, applications would be available before Aug. 1, but not this year.
The Property Tax Fairness Credit needs work, but it was the best deal that could be negotiated at the time. House Speaker Mark Eves is presenting legislation during the next session to increase funding to the new Tax Fairness program. You can be sure I will support this effort. In the meantime, please do not hesitate to contact me if you have any questions about the new tax credit.
Rep. Robert Saucier, a Democrat, is serving his first term in the Maine House and represents part of Presque Isle.