Politics & Other Mistakes: The cold facts on the tax freeze

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Maine has a new law that provides real property-tax relief.

For a few people.

But for the rest of you, maybe a tax increase.

Al DiamonHere are some of the lucky folks who benefit from this sweet deal:

Wealthy senior citizens with waterfront mansions. So long as these financially comfortable types have received the state Homestead Exemption (another break that exempts the first $25,000 of valuation on primary residences from property taxes) for at least 10 years.

Here are some of the unlucky folks who won’t benefit from this lucrative tax cut:

People who are under 65, even if they make poverty-level wages and have no idea how they’re going to heat their homes this winter. Oh, and if they somehow neglected to apply for the Homestead Exemption for at least a decade, they don’t qualify, even if they’re 65 and destitute.

To twist the knife a bit more, everybody who doesn’t qualify for this new tax cut – that’s most Mainers – stands an excellent chance soon of facing a larger-than-expected property-tax increase.

Yeah, that seems like the kind of fair and equitable tax relief we can all feel warm and fuzzy about.

This new scheme takes effect Aug. 8, and it works like this: Regardless of income, if you’re at least 65 and have received the Homestead Exemption for 10 consecutive years, you can apply to your city or town to have your property-tax bill frozen at the current level. So long as you file the proper form each year by Dec. 1, your tax bill will never again go up.

If you don’t meet these criteria, you may not immediately notice any negative consequences from this generous giveaway. That’s because the state will reimburse municipalities for the lost revenue – a shortfall that’s estimated to cost a little over $300,000 this fiscal year, rising to about $14 million annually by 2026.

But – and you just knew there was going to be a but – after that, there’s no guarantee the Legislature will continue to fully fund this increasingly expensive tax break. That’s because the state Constitution only requires it to cover half the price tag for any mandates imposed on local governments. If the budget situation is tight in 2027, legislators will be legally freed to cut back on those payments, leaving cities and towns to make up the difference.

Municipalities can do that by either cutting services (fewer cops, more potholes) or raising property taxes on the unfortunate majority of the population who don’t qualify for this tax break.

Who’s to blame for this ill-considered shifting of the tax burden? There are plenty of culprits.

Let’s start with Republican state Sen. Trey Stewart of Presque Isle, the sponsor of the bill that somehow slipped through the legislative process without much scrutiny. Stewart told the Maine Sunday Telegram he crafted the measure to apply to even very rich homeowners because it would have been too complicated to limit the tax freeze to poor people.

“I think this is a better use of money than a lot of other programs that have been funded in recent years,” Stewart told the newspaper.

That’s a pretty low bar.

Stewart isn’t alone in bearing responsibility for this hot mess. The bill slipped through the House and Senate without much notice and was sent back to the Appropriations Committee to see if there was any money to fund it. Almost nobody expected there would be, but somehow the financing turned up.

The committee chairwoman, Democratic state Sen. Cathy Breen of Falmouth, didn’t respond to requests from the Telegram to explain how that happened. And Democratic Gov. Janet Mills didn’t feel like explaining why she allowed this turd to become law without her signature.

So, we’re stuck with a bad law that may help a few impoverished senior citizens, but also may hurt a lot of low-income folks who haven’t yet reached retirement age. And it will certainly provide a nice publicly funded gift to a lot of people who don’t need it.

Like me. I’m applying as soon as the forms become available.

Comments on my hypocrisy can be emailed to [email protected].