Cumberland-based museum association concerned about proposal to tax nonprofits

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CUMBERLAND — Gov. Paul LePage’s proposed fiscal 2016-2017 budget could have a harmful impact on Maine museums, according to the Association of Maine Archives and Museums.

The association, also known as MAM, is based in Cumberland Center and directed by Erin Bishop. It is Maine’s only membership organization for promotion and support of Maine’s so-called “collecting institutions,” of which there are about 1,200, according to a MAM press release.

The statement said LePage’s spending plan calls for elimination of the state’s sharing of revenue with municipalities, but in turn permitting them to tax large nonprofits, such as museums, historical societies, archives and historic sites.

LePage discussed his $6.57 billion biennial budget Feb. 3 during his State of the State address. He tried in 2013 to end revenue sharing, but was blocked by the Legislature. The Maine Municipal Association has said state funding reductions will lead to property tax hikes, as communities attempt to compensate for the funding gap.

“Traditionally, revenue sharing provides roughly $60 million to municipalities to pay for services and reduce property taxes,” according to MAM. “The governor’s proposal allows towns and cities to offset those losses by collecting property taxes from previously exempt nonprofits with $500,000 or more of assessed value. The property/organization would be entitled to a 50 percent exemption (rather than 100 percent) with respect to the aggregate value exceeding $500,000.”

Most MAM members have annual operating budgets less than $25,000, and fewer than 8 percent of their funding tends to come from federal, state or local governmental support, causing many them to rely entirely on volunteer staff and volunteers, the press release said.

But the property holdings of those organizations – such as forts, lighthouses, sea captain’s homes, 19th century mills, historic farmsteads and one-room schoolhouses – push them beyond the $500,000 threshold in LePage’s budget, according to MAM.

“In short, these organizations serve as caretakers to the rich cultural history of Maine, preserving these structures from our collective past for future generations,” MAM said. “The governor’s proposal would end tax exemptions to the stewards of these historic properties.”

The organizations serve about 2.7 million patrons each year, including about 154,000 students, MAM reported.

In a message to state legislators, Amy Lent, executive director of the Maine Maritime Museum in Bath, said LePage’s proposal is not an “effective solution” to Maine’s budget issues.

“For communities without sizable nonprofits it would be a disaster,” she said, adding that “even communities like Bath would be unlikely to come out ahead because the nonprofits that are large enough to fall under this provision still couldn’t make up the lost revenue; those of us who are economic drivers would take such a hard hit that our capacity to attract tourism would be impacted, thereby creating a negative spiral.”

Lent added that nonprofit organizations earn tax exemptions by doing work private companies and the government will not or cannot do.

Her museum is the steward of “a unique historic site and thousands of collections of objects that preserve the important maritime history of this state,” she said. “We educate thousands of children and adults about this valuable heritage and as a tourist destination, we are responsible for nearly $14 million in economic impact and related tax revenues.

“If this tax proposal goes through, our ability to continue this work would be seriously diminished,” Lent added. “There is no way we could cover those costs without making the kind of budget cuts that would have serious negative consequences to the community we serve.”

The Maine Archives and Museums association said it has enjoyed a “cordial and respectful relationship” with LePage in the past four years, and praised his backing of the restoration of the Blaine House.

“It is our hope that his second term in office will be characterized by the same regard for the organizations that share responsibility for preserving and promoting the arts, history, and culture of Maine,” the association added, “while bringing millions of visitors and millions of dollars to our state each year.”

Alex Lear can be reached at 781-3661 ext. 113 or [email protected]. Follow him on Twitter: @learics.

A Maine native and Colby College graduate, Alex has been covering coastal communities since 2001, and currently handles Bath, Topsham, Cumberland, and North Yarmouth. He and his wife, Lauren, live in the Portland area, and Alex recently released his third album of original music.