SCARBOROUGH — The town’s real estate has increased in value by $6.8 million following a Maine Supreme Judicial Court ruling last week that found the assesor was unlawfully considering abutting parcels one piece of property.
As a result, the final tax rate for fiscal year 2017 is lower than expected, Town Manager Tom Hall announced Monday.
When the budget was adopted by the Town Council earlier this summer, it was estimated that property taxes would increase by about 3.4 percent. With the added value, the increase is 36 cents, or 2.3 percent, for a tax rate of $15.85 per $1,000 of valuation.
“We are particularly pleased with the continued expansion of the commercial and industrial portions of the tax base, as it creates jobs and helps keep the tax rate manageable for residents,” Hall said.
While the additional real estate value is fairly insignificant when considered in the context of a multi-billion dollar tax base, “there’s certainly no detrimental affect,” Hall said Wednesday. “If anything it’s helpful.”
The court, in its Aug. 16 decision in Donald Petrin et al. v. the Town of Scarborough, settled a dispute that dates back to 2012. The unanimous decision found it was unlawful for the town to give tax breaks to beachfront property owners who own adjacent lots of lesser value.
Most of the properties that benefited from tax savings are in the Prouts Neck neighborhood. Plaintiffs in the case live in the Higgins Beach, Pine Point and Pillsbury Shores neighborhoods.
In a 29-page decision, the state’s highest court found that former assessor Paul Lesperance was correct when he revalued some beachfront properties in 2012 to ensure that property sales and real estate assessments complied with legal requirements.
But the court found that his decision not to assess each lot separately and consider adjacent lots “excess land” – resulting in thousands of dollars in tax breaks for some property owners – was “untenable” and illegal.
The Law Court found the 34 appellants were being discriminated against because the tax break “necessarily results in an unequal apportionment of the municipal tax burden, which operates to the Taxpayers’ detriment,” according to the decision.
The appeal was remanded by the Law Court to Cumberland County Superior Court, and will eventually come before the local Board of Assessment Review in order for a monetary remedy to be decided, Hall said.
Hall said the Law Court’s decision is helpful in that it gives the town “absolute clarity” in terms of how to assess similar properties going forward.
The impact on taxpayers benefiting from the former assessment methodology is fairly minor, Hall said. In 2014, the town communicated with 57 property owners who were affected by the lowered assessments; 17 decided to have their lots assessed separately and pay full value.
Of the remaining property owners, 18 will experience no change with the ruling because of the uniqueness of their lots, leaving just over 20 property owners who will be affected by the ruling, Hall said.