Tax Fairness: Seniors, homeowners, and landlords

Ben has previously been endorsed by the Maine Alliance for Retired Americans

Ben has previously been endorsed by the Maine Alliance for Retired Americans

Lewiston’s local property taxes have been driven up in recent years because the state gave three major tax breaks for the rich in the last eight years, forcing cuts to municipal revenue sharing, and increasing property taxes. Maine’s wealthy now pay a lower state and local tax rate than anyone else. As a result, property taxpayers have had to pick up the tab. We are paying higher taxes for fewer services, so that rich people can pay less in taxes.

Fortunately, in the last budget passed by the legislature, money was set aside to help municipalities lower property taxes. We should target those resources to those who need it most.

With the roughly $1.5- $2 million in state resources coming to Lewiston in 2018 that can only be used for tax reduction¹, we should direct those resources to these priorities:

  • Tax rebate for seniors. For people in a single-family household, where everyone is over the age of 65, we should create a $200 tax rebate. Seniors are living on fixed incomes and have a hard time absorbing property tax increases. (Cost: about $500k)
  • Exemption from the “rain tax.” Currently, single family homes and duplexes are charged a flat rate for the “rain tax.” While this storm water fee is useful to target large institutions (particularly non-profits that don’t otherwise pay property taxes) that place outsized strain on public water systems, there’s no reason most homeowners should be required to pay for this outside their property taxes. (Cost: $450k)
  • Trash pick up for multi-unit buildings with responsible owners. As described in the housing plan, one of the major costs that downtown landlords face is trash pick up, as it is not included in the property taxes they pay the way it is for single family homes. For good landlords that play by the rules, we should reward them (and help keep downtown clean) by providing this service. We won’t be able to provide this for all landlords initially, but we will be able to do it for most of the good ones, and it will provide an incentive to sign up for the registry. (Cost: about $800k)

While long-term economic growth is the only real solution to expanding our tax base and lowering the property tax rate, we should seize every opportunity we can to make our tax system more fair.

Furthermore, the city of Lewiston should join with all the other great organizations out there—particularly municipal unions like the Maine Education Association—in arguing for a tax policy that is more fair. It’s absurd the wealthy pay such a low tax rate. We must construct a state and local tax system that works together to make sure the wealthy pay more.

1. For those interested in the more technical aspects of how the money moves, here’s how it would work: The additional state aid would initially move to the schools to lower the mil rate for the school system, but the overall mil rate for the city would remain constant, allowing us to have the resources to create these targeted tax assistance programs.