As much as we would like to support and encourage the Maine Land Bank (MLB) system of tax reduction [WWF Dec. 2002], and as much as we empathize with Chebeague Island residents, we don’t think this proposal will work for all islands. Based on our experience, it won’t work for North Haven.
As assessors, we certainly understand the tax burden that has been placed on property owners (which, by the way, includes us). This burden is particularly onerous for island residents who have seen the value of their property escalate out of all proportion to income, and whose homes represent more than simply an investment in real estate. To many of us, our family land is our history and our culture, and losing it is unthinkable. Being forced to sell our land because of property taxes is analogous to selling our heritage, our legacy, our souls. As the MLB’s fact sheet reads, “When people move, willingly or otherwise, the community loses its character and becomes faceless. In the case of small, isolated areas, the very survival of the community is threatened.” We couldn’t agree more. In fact, some of us believe that the very premise of basing taxes so heavily on the value of real estate is untenable, and must be changed statewide.
Basically, the Land Bank depends on towns to recoup lost property taxes when tax penalties are paid when land comes out of the MLB. This is similar to what happens in Maine’s Tree Growth Tax Law, wherein back taxes and interest are assessed for land that is withdrawn from the tax shelter. It is possible that 80 percent of North Haven landowners would join MLB, if it were enacted. Why? Because we believe most residents would not anticipate selling their property, and that is most likely the correct assumption. Some of our year-round families have lived on North Haven for ten or so generations. Some of our summer families are coming into their fifth generation. With few exceptions, land on this island is passed from generation to generation. (This actually makes it difficult to fit into the formula that the state sets to determine whether or not our evaluation is appropriate. With so much property transfer not “at arm’s length,” it is hard to find sales that reflect true current value.) The possibility of a very high percentage of participation in MLB is also based on the fact that 100 percent of those eligible are in Homestead Exemption, and that some of our largest landowners have placed land in Tree Growth or Open Space. Meanwhile, in the past fifteen years, a total of only three partial pieces of property have been withdrawn from Tree Growth, with minimal penalties incurred compared to our overall municipal budget. Because both year-round and summer families tend to hold onto their properties for generations, we cannot foresee enough withdrawal from the Land Bank to support the program.
However, schools and municipalities must have income to function, and implementing the MLB system, for some islands, would therefore unfairly shift a large percentage of the tax burden to a far smaller percentage of the population. Our taxes have already increased due to the fact that North Haven’s school district lost over $100,000 in General Purpose Assistance from the state because of escalating property values. We already know that island schools, per pupil, are disproportionately expensive because many costly school services and programs are needed or mandated no matter how small the school population. We cannot afford to lose more funding, and this could be an only option if taxes for non-MLB members were too onerous.
For North Haven, we believe that a plan such as that proposed by North Haven Community School Principal Barney Hallowell, wherein a local real estate transfer tax would be imposed on the sale of high priced properties, could alleviate the burden of high property taxes. As his recent letter to the Board of Selectmen states, “The logic behind such a tax is that those sales actually have a cost impact upon the towns where they occur. The resulting loss of state funding for education, the impact of new home construction on town roads, the effect on the water table and water consumption, and the increased demands on local fire and police departments to provide equipment and personnel to protect them justify the expectation of some monetary return to the town to offset them.” No single proposal will work for every island or every Maine municipality, but this would appear to work better for towns with a more stable population.
In fact, state government should be trying to help solve this problem before the entire coastline (not just islands) is owned by wealthy non-residents, unless this is what the state foresees as viable and desirable. The property tax strategy is predicated on the basic premise that wealthy people own the valuable property. This simply isn’t true anymore. There must be a way to raise tax dollars from those who can best afford to pay them.
Yes, something has to be done, and the efforts of those who have devised and proposed the Land Bank Trust are admirable. At least they are working on something. Unfortunately, we don’t feel it will work for everyone.
The authors are the members of the North Haven Board of Assessors.