Rep. Melanie Sachs, D-Freeport, recently introduced a bill that would appropriate $15 million from the General Fund to fully cover the state’s reimbursement to municipalities for costs associated with the Property Tax Stabilization Program. The Appropriations and Financial Affairs Committee, of which Sachs is the chairperson, will have a public hearing on the bill Tuesday, Feb. 13.
“Our municipalities are still dealing with the financial fallout from the well-intentioned but unsustainable Property Tax Stabilization Program,” Sachs said in a prepared release. “While the Legislature repealed the program last year and strengthened existing tax relief programs instead, we remain committed to meeting 100% of our financial obligations to our municipalities. This bill would ensure we do just that.”
In 2022, the Legislature enacted L.D. 290, which created the Property Tax Stabilization Program that allowed residents 65 and over to freeze their property taxes regardless of income, property value or need if they were a permanent Maine resident, owned a home for 10 years and were eligible for the homestead exemption.
According to Sachs, the program had significant flaws and was not financially sustainable, costing towns double what was anticipated. The program was repealed in 2023’s supplemental budget, and in its place, the Legislature expanded the Property Tax Deferral Program, raising the maximum income from $40,000 to $80,000 and increasing the maximum asset test to $100,000. The Legislature also increased The Property Tax Fairness Credit for Mainers 65 or older from $1,500 to $2,000.
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