The headline-grabber in Gov. Paul LePage’s initial budget proposal to the Legislature was a two-year freeze on state revenue sharing, meaning cities and towns would lose $98.9 million in revenue in each of the next two years. The headline writers were right: that’s a big deal. In order to compensate, municipalities across the state would have to raise property taxes significantly or cut vital services.
But lost in the resulting spin was another cut that could compound that rise in property taxes: the budget proposed by LePage would do away with the so-called CircuitBbreaker program and Homestead Exemption for all Mainers except those over 65 and veterans.
In coastal communities and on islands, where property taxes are already a significant impediment to living on a modest income, these policies would be disastrous. In Vinalhaven, for example, 379 households took advantage of the Homestead Exemption last year. Combined, they saved more than $33,000 in property taxes. On islands like Peaks, in Casco Bay, which has both high property valuations and a high mil rate, the need is even greater.
And the impact of these programs is not limited to islands; the Property Tax and Rent Refund Circuit Breaker program, which offers middle and low-income taxpayers a rebate of up to $1,600, depending on the percentage of income paid in property taxes, applied to more than 200,000 Mainers in 2011.
Without these programs—which were championed by Democratic and Republican legislators alike, particularly those in the Coastal Caucus—it would be much harder, if not impossible, for working families near the water to stay in their homes. Many island communities are reliant on fishing. But it doesn’t matter much whether the industry thrives if island families can’t afford their property tax bills.
And cuts to education and local services, not to mention higher property taxes, will make the task of attracting more young families to island communities—a significant challenge in the best of times—that much harder.The budget proposal was not without its good points. The additional staffing of the Department of Marine Resources was a particularly good sign for Maine’s coastal communities, and an indication that the governor understands the importance of the fishing industry to the sustainability of the towns along the coast. Regardless of the promising economic development work happening on Maine waterfronts, the fishing industry is still critically important to the future of our year-round island and coastal communities, and is likely to remain so. It is reassuring to see that the governor and his budget writers understand that—and are willing to prioritize it, even in tough economic times.
The governor’s proposal highlights a challenge that’s common to many rural communities: it’s simply more expensive to provide the services on which citizens rely. Because of energy costs, education expenses, and transportation, island communities cost more per capita to operate. Maine has always maintained a commitment to the value of small communities—on the coast and inland—and been willing to prioritize maintaining this way of life, even if it means spending money. If the state is serious about the survival of small towns, it will have to invest in programs like the Circuit Breaker and Homestead Exemption.
The budget is where state government establishes its true priorities. The governor’s laudable commitment to maintaining a strong Department of Marine Resources is in there. Property tax relief should be, too.