Are high property taxes squeezing fixed income seniors in your town? Do you have to pay for an alignment every year for your car due to all the potholes? Is your child in an outdated, over-crowded classroom?
Well, you’re not alone, and we hear these concerns nearly every day. We’re the mayors of Portland and Augusta representing almost 87,000 Mainers.
MOST is just as it sounds. It’s an option for municipalities to decide if they would like to implement a modest sales tax in their municipality. The funds generated from that tax stay in the local community and could then be used to offset property tax increases needed to repair our aging schools, fix our roads or provide property tax relief to seniors (or anyone else your community chooses).
Whatever your town needs “MOST” (see what we did there?)!
Property tax rates are over 20 mils in many Maine communities. Right in Bangor, residents pay $2,295 for every $100,000 of assessed value. In Augusta, it is similar. In Auburn, it is even higher. A local sales tax will shift some of that burden to out-of-state residents visiting Maine using local services.
The current administration has proposed an increase in revenue sharing from 2 percent to 2.5 percent. While this is a step in the right direction, it still doesn’t meet the statutorily mandated 5 percent funding threshold, leaving Mainers to pick up the annual hundred million dollar tab. The same holds true for the 55 percent commitment the state has never met to fund our schools.
These financial shortcomings have left our respective cities with millions of fewer dollars than we are owed.
In fact, had revenue sharing alone been funded over the past five years at the mandated level, neither of our communities would have to raise taxes one cent. And in Portland we could have fully funded universal pre-K and built desperately needed affordable housing.
With a 1 percent municipal option sales tax, municipalities like Auburn would stand to gain $7.6 million, Bangor $13.7 million and Portland more than $16 million annually. How does this translate into property tax relief? An average Portland home would see property taxes offset by more than $500 annually. Augusta would see a similar drop.
But let’s be clear about one thing. MOST isn’t a tax increase, it’s a tax shift. Under MOST, communities export a large portion of the burden we have to tourists. When tourists come to town, they pay the tax and it stays in the community to help ease the burden on the property tax.
In the end, MOST is also about local control, plain and simple. We recognize that what may be a good idea for Portland or Augusta may not be a good idea for Millinocket or Washburn. But that should be our decision.
Legislators should give us the choice by allowing us to vote to decide if a local sales tax is right for our community.
We aren’t re-inventing the wheel here; Maine is one of only 12 states that doesn’t have a local sales tax — red states and blue states alike do. Annually, 5.3 million tourists visit the Pine Tree state. They don’t pay local taxes, but do lend to the need for fire, police and emergency medical services, to name a few. Let’s let our friends visiting our great state contribute to the taxes in our economy, just like you do when you visit theirs.
And let’s finally stop placing an undue burden on the property tax of hardworking Mainers.
Ethan Strimling is the mayor of Portland. David Rollins is the mayor of Augusta.