Gov. LePage’s proposal to permit Maine municipalities to tax the real estate of nonprofits seems to make sense in this age of multimillion-dollar nonprofits that are run like businesses. Cities and towns with a large proportion of nonprofit-owned real estate would get some badly needed taxable property base to support the growing need for municipal services.

On the other hand, a threshold based solely on property value can impose undue hardship on nonprofits like land trusts, recreational parks and house museums, which have valuable real estate holdings but small revenues.

A revision to the proposal, establishing a threshold based on revenues (say, $1 million of gross revenues per year), would cover those nonprofits that have the ability to bear their fair share of the local tax burden, while continuing to exempt those that are not in a position to do so.

Permitting local taxation of nonprofits is, however, no substitute for a meaningful system of revenue-sharing by which the state redistributes a certain portion of its revenue to cities and towns, based on a formula that takes into account both the local tax base and the services and needs funded by local dollars. Currently, there are wide disparities in both that would continue to exist even with local taxation of nonprofits.

This disparity can be ameliorated only by a sound revenue-sharing scheme.

Peter L. Murray