GOV. PAUL LEPAGE is proposing eliminating municipal revenue sharing, which his administration has characterized as unstable.

GOV. PAUL LEPAGE is proposing eliminating municipal revenue sharing, which his administration has characterized as unstable.

BRUNSWICK

Local nonprofits are taking a cautious look at Gov. Paul LePage’s budget proposal that would remove their tax-exempt status.

The potential sea change in taxexempt status is part of LePage’s twoyear budget proposal presented to the Legislature earlier this month.

LePage is proposing eliminating municipal revenue sharing, which his administration has characterized as unstable. To make up for the lost income, municipalities would be allowed to tax large nonprofit entities.

The proposal excludes churches and state-owned property, but other local organizations that have property worth more than $500,000 could feel the pinch.

LePage views the overall budget proposal as a way to “improve Maine’s property tax ranking from 40th to 35th,” according to his budget summary.

State Sen. Stan Gerzofsky, D–Brunswick, said there will be “winners and losers” under LePage’s proposal.

Losers will include smaller communities such as Pownal that aren’t considered service communities and don’t have large, nonprofit organizations to draw on for revenue.

“It’s really going to be a blow to some of our smaller communities,” said Gerzofsky.

Winners will include towns such as Freeport, North Yarmouth and Brunswick, he said.

“If they’re allowed to tax nonprofits, we have Bowdoin College, we have Sweetser, we have two hospitals,” said Gerzofsky, adding that Brunswick has “a lot of non-taxable property. I’ve been told that’s why our property taxes are so high.”

Brunswick’s two hospitals, Parkview Adventist Medical Center and Mid Coast Hospital, could conceivably find themselves in the position of having to pay taxes to the town that may be trying to make up for the loss of what has been about $1 million in annual state revenue sharing.

Parkview Chief Financial Officer Bill Gannon said last week that the hospital was in communication with Brunswick’s assessor to find out what the value of the hospital that has not been assessed before would be.

Mid Coast Hospital warned that LePage’s proposal could drive up the cost of health care, and that cost could be borne by those who need it most.

“Mid Coast Hospital does not support taxing nonprofit organizations. Nonprofits have an obligation to provide an essential service for the public and earn their tax exemption through this accountability,” reads a statement issued by Mid Coast through its spokeswoman, Judy Kelsh.

The hospital noted that it provided $13.6 million in free care to those unable pay in 2014, and has been “consistently identified as one of the lowest cost hospitals in the state.”

“While we are a nonprofit hospital, operating costs need to be covered, and therefore any tax imposed on the organization is in fact a tax on our patients,” the statement reads. “At a time when so many are working toward a common goal of decreasing the overall cost of health care, the governor’s proposed plan would directly oppose the forward progress that has been made to date and further drive up costs.”

Sweetser, which provides mental health services in several communities from Sanford to Winterport, including two offices in Brunswick, declined to comment.

Bowdoin College, which may also be affected, also kept mum on the LePage plan.

“The college has no comment on the governor’s proposal,” wrote Bowdoin spokesman Doug Cook.

Even with its nonprofit status, Bowdoin College is the 11th largest taxpayer in Brunswick, having paid $222,970 in property taxes as of June 30, according to the college’s website.

Additionally, Bowdoin makes an annual contribution in lieu of taxes to the town, to the tune of $122,200 in 2014. Also in 2014, the college paid $26,421 in fees to the town.

Brunswick Town Council Chairwoman Sarah Brayman and Town Manager John Eldridge said it was too early to comment on the impacts LePage’s proposal may have to the town.

However, according to a recent article in the Portland Press Herald, Eldridge estimates that Bowdoin’s $150 million valuation could result in $2 million in taxes for the town.

Brunswick’s finance committee will be looking at the long-range implications of LePage’s proposal, said Brayman.

How LePage’s proposal impacts local land trusts such as the Kennebec Estuary Land Trust based in Bath and the Brunswick- Topsham Land Trust isn’t quite clear, yet.

Brunswick-Topsham Land Trust Executive Director Angela Twitchell said her board will be taking a close look at the proposal. The trust has conserved about 2,300 acres in Brunswick, Topsham and Bowdoin, but many of which has been conserved through easements with private landowners.

“I think we are likely below his $500,000 threshold,” Twitchell said. “Our largest holding is Crystal Spring Farm, and we pay taxes on that just like everyone else.”

Topsham-based Maine Coast Heritage Trust works to conserve and protect land up and down the state’s coast. Communications Director Richard Knox said his organization is working hard to fully understand the impact of LePage’s proposal.

As proposed, LePage’s budget “would have a direct and detrimental impact on the health of nonprofit land trusts,” said Knox.

“We are quite concerned,” he said. “We are a charitable organization serving the public. I think sometimes that gets lost, as it does for hospitals and institutes of higher education as well.”

Land trusts, Knox said, aid municipalities in providing public recreation, clean water and land available for harvesting timber and shellfish, among other economic functions. Smaller land trusts with limited funding and staff, but which may hold large parcels, could be severely impacted.

MCHT will be working with the Maine Association of Non Profits, as well as speaking with legislators, to more fully understand the proposal and “propose alternative solutions that can help all parties. We want to try to be as constructive as we can,” Knox said.

LEPAGE’S TAX proposal excludes churches and stateowned property, but other local organizations that have property worth more than $500,000 could feel the pinch.

LEPAGE VIEWS the overall budget proposal as a way to “improve Maine’s property tax ranking from 40th to 35th,” according to his budget summary.


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