House rejects bid to make tax-exempt nonprofits pay service fees to municipalities

Posted March 28, 2014, at 5:07 p.m.
Rep. Adam Goode
Rep. Adam Goode

AUGUSTA, Maine — An effort to force high-value, tax-exempt nonprofits such as hospitals and private colleges to fork out payments for municipal services was rejected by the House of Representatives on Friday.

The bill, LD 936, was defeated in an 80-57 vote. Proponents of the measure said it was a fair way to make nonprofits pitch in for plowing, trash removal and other services provided by the cities and towns in which they reside.

The bill was sponsored by Rep. Kathy Chase, R-Wells, the lead Republican on the budget-writing Appropriations Committee, who said large nonprofits eat up a sizable amount of a given town’s taxable property base.

“It is only fair for properties, if they are going to be tax exempt, that they pay for the services a town does for them,” Chase said.

She and other supporters pitched the bill as a way to help municipalities that are struggling for income.

The bill would have allowed municipalities to approve service fees for nonprofits with property value worth more than $1 million, except for nursing homes. Churches and veterans associations also would continue to be exempt.

That would leave hospitals, private colleges and universities, and research institutions such as Bar Harbor’s Jackson Laboratory eligible for the service fee.

Rep. Adam Goode, D-Bangor, the House chairman of the Taxation Committee, said the bill would be largely redundant, as most large nonprofits already pay a voluntary fee to municipalities in an effort to maintain a good working relationship with their host communities.

He also said that because the bill would allow each town and city to decide for itself whether to assess the service fee, it could result in neighboring towns competing in “arms races” to attract big nonprofits, which can provide many jobs and services to a municipality.

The bill faces additional votes in the Senate.

Follow Mario Moretto on Twitter at @riocarmine.

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