FRYE ISLAND — The cottage on Leisure Lane, almost directly across from the famed Frye’s Leap rock ledge, has been in Bob Sutherland’s family for 50 years and he hopes to one day turn it over to his adult sons.

But Sutherland sees that vision growing dimmer with each passing year.

“The taxes are a challenge and are becoming more so all the time,” he said last week from the back deck of the shingled cottage, among the first houses built on the 1,000-acre island in Sebago Lake. “It’s got us on the path of non-sustainability.”

Frustration about high property taxes is not unusual among Maine property owners, particularly those with water views, but Frye Island residents are unique.

In the 17 years since residents voted to secede from the town of Standish, property taxes on the island have gone up roughly 200 percent, mostly to support the local school district.

But Frye Island is a seasonal community, open only from May through October, and sends no children to district schools. Its inhabitants are largely people like Sutherland, middle-class retirees who live elsewhere in the winter.

Residents say they don’t mind paying taxes, but they also believe their property tax rate is out of proportion with the rates of other towns in SAD 6 – Buxton, Hollis, Limington and Standish – particularly since they get nothing in return.

State Rep. Susan Austin, who represents Frye Island and several other towns in the Legislature, recently submitted a bill to change how island property owners are taxed for education.

The Education Committee discussed the bill at length this month, but ultimately turned it into a resolution that directs Frye Island officials to sit down with SAD 6 officials to find common ground.

Gary Donahue, who took over as Frye Island’s town manager last July solely to tackle the tax issue, said this might be the island’s best chance to make a change.

“We can’t continue this way,” he said. “The island won’t survive.”

SAD 6 officials, including the superintendent and the chairman of the board of directors, didn’t respond to multiple interview requests, but the school district has resisted Frye Island’s calls for change in the past.

The tax issue stems from when Frye Island seceded from Standish in 1998, partly to keep their tax rate in check. The secession was contingent on the island remaining part of the school district, and, ironically, may have helped cause the current tax problem.

“I think in hindsight, we may have been better off staying with Standish,” said Nancy Fournier, a real estate agent for the island and a seasonal resident. “But who knows?”

UNINTENDED CONSEQUENCES

Frye Island, the only incorporated freshwater island in Maine, was settled in the 1960s after two New England developers, J.A. Bowron and Gould H. Coleman, purchased the land for $130,000.

Many of the island’s roughly 500 cottages were built in the late 1960s and early 1970s.

The island was always part of Standish, even though it is geographically closer to Raymond, where the ferry departs the mainland.

After years of watching their tax dollars pay for services like snowplowing and utility infrastructure that didn’t benefit them, Frye Island residents decided to go it alone.

Standish said it wouldn’t oppose the island’s secession, but required that it stay in SAD 6. Typically, towns may vote to be removed from a school district, though their tax dollars still will be earmarked for education and support another school district.

Frye Island doesn’t have that option.

In 2001, three years after the secession, the Legislature passed a law saying the town couldn’t withdraw from SAD 6 without legislative approval.

Three years after that, the state passed L.D. 1, which overhauled the formula for funding public education to base it largely on enrollment. However, Frye Island was excluded from the new formula because it didn’t have students, and since 2004, island property owners have watched their tax rates rise to support SAD 6’s growing budget.

SAD 6 Superintendent Frank Sherburne gave a brief response to numerous voicemail and email messages for information on the school budget.

“All budget information can be located on the district’s website under the budget area at the top of the page,” he wrote.

The district’s budget for the 2015 fiscal year was about $45 million, 48 percent of it paid by the state, the rest from contributing towns. Frye Island residents paid about $1.5 million, or 6.5 percent of the local share.

Since Frye Island’s tax burden for schools is based on property values, not enrollment, its residents pay a greater share for two main reasons: Property values on the island are higher since many houses have water frontage; and, unlike other towns, the island has no commercial tax revenue to offset the burden on residential taxpayers.

But residents say that despite what others may think, they are not all wealthy out-of-staters. While many islanders come from Florida, Massachusetts or Connecticut, among other places, many also come from Maine.

Most of the taxable property is valued between $200,000 and $350,000, according to the tax rolls. Maine’s median home value is about $175,000.

“We have a few McMansions, but most people here are middle-class retirees on fixed incomes,” said Dave Wagner, who owns the Frye’s Leap General Store and Cafe. Located right off the ferry dock, it’s a place where islanders can stock up on essentials like alcohol and salty snacks.

“The taxes have become a significant burden for many of them,” Wagner said.

IMPACT ON REAL ESTATE

The Frye Island tax rate is about $23 per $1,000 of assessed value and the average tax bill is $3,200, but many homeowners pay in excess of $5,000.

Residents say that’s a significant amount, especially for houses that are occupied for six months or less every year.

By comparison, other towns in SAD 6 have tax rates in the $12 to $14 range per $1,000 of valuation. For significantly less, they also get more public services.

Real estate agent Fournier said the tax rate has begun to affect the island’s real estate market in two ways: More people are looking to sell their homes to get out from under the high taxes, and those houses are staying on the market longer or the owners are slashing their prices to make a sale.

“I don’t know what will happen to the island,” she said. “This is the worst I’ve seen.”

The taxes on her own cottage have more than doubled, from $1,800 to $3,900, since she bought it 16 years ago, Fournier said.

Bev Vaillancourt and her husband bought their cottage on Frye Island in 1992. Their full-time residence is only about 30 miles away in Auburn, but now that they are retired they spend as much time as they can on the island.

“It’s a wonderful mix of people and so family-oriented,” she said. “Every day of the week, there is something for the children to do.”

Like other residents, she said taxes have become a source of frustration.

“I’d certainly like them to be lower,” Vaillancourt said.

Rita and Andy Lapati live in Oxford, Connecticut, have owned a cottage on the island since 1983 and return every spring. They said they can’t help but feel that they are being gouged.

“It’s almost as though they are trying to scalp the tourists, but there are just as many Mainers out here,” Rita Lapati said.

Bob and Margaret Miner, from Bolton, Connecticut, also have seen some animus directed at out-of-staters.

“The truth is, we’re supporting the local economy,” Bob Miner said. “Everything we buy here is in a local store.”

AN UPHILL FIGHT

Although Frye Island residents are united in their opposition to their tax rate, there doesn’t appear to be much sympathy from non-islanders.

Rep. Austin, in her testimony this month, said, “When Frye Island openly approached SAD 6 in an attempt to work on a solution, they were met with laughs and told by the board to go to the Legislature if they wanted anything to change.”

Any change that would benefit Frye Island property owners would certainly affect SAD 6. The school budget would either have to be reduced or other towns would have to contribute more.

Suzan Beaudoin, director of school finance and operations for the Maine Department of Education, testified against Austin’s bill.

“This shifting of the local shares may cause a significant fiscal burden to some of the municipalities,” she said. “Also, if Frye Island did withdraw from SAD 6, this would result in a significant loss of revenue for the school district and may result in cuts to educational programs.”

Sen. Linda Valentino, D-Saco, also testified in opposition, saying the loss of revenue would hurt the other small towns. Based on the school formula, Buxton would have to pay an additional $400,000, Limington an extra $230,000 and Hollis an extra $170,000.

She said her mother, who is 85, owns a second home in Sebago that actually looks out toward Frye Island.

“She doesn’t get a tax break and neither do the hundreds of other people in Maine with second homes – or even primary homes – who also don’t have children in school,” Valentino said.

Island residents don’t see it that way. Frye Island is the only community in Maine that pays into a district without sending any students to school. The residents say they’d be fine with a property tax structure similar to other communities, even other lakefront communities, because it would almost certainly ease their burden.

The only other option would be for Frye Island to rejoin Standish, or perhaps even Raymond, which is in another school district.

Sutherland, who has 50 years of history and family memories on the island, said he supports public education and that other Frye Islanders do as well. They are just looking for equity.

“I think a lot depends on the cooperation of SAD 6,” he said.

Betsy Gleysteen, the only Frye Island representative on SAD 6’s board, is hoping the board takes the tax issue seriously.

“Everybody I talk to has a sense that it’s just not fair,” she said. “Islanders think negotiating with the SAD is a good next step.”


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