March 24, 2018
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Property taxes on homes that don’t exist?

George Danby | BDN
George Danby | BDN
By Janice Cooper, Special to the BDN

There’s a lot of talk these days of tax fairness. Are the wealthiest among us paying a fair share of taxes? Or are struggling families shouldering too much?

There is, however, another dimension of tax fairness that is getting short shrift in Augusta. I am fighting what seems to be a losing battle to protect homeowners from having to pay property taxes on homes that no longer exist.

Early on June 25, 2013, there was a massive propane explosion in a quiet neighborhood of condominiums in Yarmouth. One home was nothing but debris; six others were rendered uninhabitable. Insulation rained down like a summer blizzard.

The resident of the obliterated home was killed; miraculously, there was no fire and no one else was seriously injured.

But the survivors still are trying to put their lives back together. Most are elderly and living on fixed incomes. Insurance covers only some of the financial losses, and the emotional toll of losing their lifetime belongings and memorabilia, their relationships with neighbors, and being forced to move from one temporary shelter to another has been devastating. Because the explosion was so powerful, investigators failed to find its cause.

Here’s where tax fairness comes in. A few weeks later, these residents received their tax bills. They were based on the value of the home as of the previous April 1. Full fare.

Surely, they thought, this is an oversight. No, the assessor replied, there is nothing we can do. That’s the law. No reassessment until the next tax year starts, on April 1, 2014.

While some towns have quietly chosen to ignore this absurdity from time to time, the law as written sets assessments as of April 1, and abatements are permitted only in cases of “inability to pay.” To be treated fairly, you not only had to lose your home, but plead destitution.

I put in a bill to allow abatements for homes destroyed by fire, explosion and other natural disasters. The Maine Municipal Association, the group that represents the interests of towns, objected, raising a host of constitutional, legal and practical concerns. At the bill’s public hearing, some members of the Taxation Committee thought it wasn’t fair enough: It should cover all real property. I offered to amend the bill to address those concerns, as well as other issues raised by the Maine Municipal Association. In the end, none of that mattered. Only four committee members voted for the compromise.

Thanks to some legal research, I discovered there’s nothing constitutionally unsound about what I’m trying to do: The section of law I relied on originally provided that assessors could abate taxes for just about any reason at any time during the year. That law was on the books a year after our state’s birth, in 1821. Later, that section was narrowed to cases of poverty.

Still, the Maine Municipal Association continued to voice its opposition — without acknowledging that fairness was a valid concern.

Preserving funds for towns and cities is an inadequate excuse for opposing this common-sense change. In Yarmouth, a high-tax town, the loss of revenue from the seven destroyed homes would amount to no more than about $25,000. Each year, Yarmouth, along with other towns, sets aside some percentage of its expected property tax revenue to cover uncollected taxes and other shortfalls. This year, that fund is about $173,000. Use that fund, I urged, or a set a percentage limit on it, so all property taxpayers will chip in.

Well, what if a town lost most of its property value, as the Quebec town of Lac-Megantic did last summer after a deadly railway explosion? I suggested ways to limit the exposure of municipalities.

The Maine Municipal Association and the committee were not interested. Members from both parties and both houses had little to say about fairness, as if it were an alien concept in the law or our responsibilities.

Yet when I tell ordinary folks about this bill, they invariably are dumbfounded that the bill is even needed. They cannot imagine that government can be so blind to what’s fair and just. I was about to lose heart when I received a telephone message from the other end of the state, a resident of Houlton: Keep up the good work. Mainers get it.

I hope the Legislature will, too.

Janice Cooper represents Yarmouth in the Maine House of Representatives.


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