Yarmouth rep's bill to aid owners of destroyed homes faces uphill fight
YARMOUTH — The victims of the June 2013 propane explosion on Gables Drive may have lost their homes, but they still have to pay their property taxes.
Now Rep. Janice Cooper, D-Yarmouth, has introduced LD 1610, an act to allow a municipality to abate taxes assessed on property that is destroyed.
"It's just so cold-hearted and counter-intuitive that you have to pay taxes on something that doesn't exist," Cooper said.
The bill was heard by the Legislature's joint standing committee on taxation at a Jan. 22 public hearing and a Jan. 29 work session. After 90 minutes of deliberation at the work session, the committee voted 9-1 to table the bill.
It will likely be discussed next at the taxation committee's Feb. 19 session, Committee Clerk Heather Macklin said.
Cooper's bill would allow a property tax abatement for the remainder of the taxable year in the event that a homeowner's primary residence loses 50 percent or more of its structural value to a fire, explosion or natural disaster. (Property taxes are assessed annually as of April 1.) It does not mandate abatement or specify a percentage of abatement.
State law forbids municipalities from granting property tax abatements except in cases of "hardship or poverty." But, as enacted, the word "hardship" does not include fires or explosions; it's been interpreted to mean, essentially, poverty.
"My constituents are not wealthy, but nor are they about to plead poverty, either out of Maine pride or financial reality," Cooper said in her testimony. "I am here on their behalf and others similarly situated because abatement in these circumstances should be a matter of fairness and community support. When a loss of this gravity has been experienced, Mainers should not have salt rubbed in their wounds. Towns should have the discretion to give them a break."
Cooper suggested at the work session that concerns about municipal revenue loss could be offset by setting abatement limits in the form of dollar rates or a percentage of tax income. She stressed that, in the instance of the Yarmouth explosion, the town would likely only forfeit around $30,000 in property taxes.
Several victims of the explosion, which wrecked six condominiums and killed one resident, prepared written testimonies for the bill's public hearing.
Joan and Amory Houghton described the distress, wreckage and loss of family heirlooms they endured as a result of the June 25 tragedy. Amory said that for just the second time in his life he had a flashback to a naval bombardment he survived during the Korean War more than 60 years ago.
"I hope approval of this bill will give us and those in the future who experience losses such as ours a small break," the Houghtons wrote.
The Maine Municipal Association's 70-member legislative policy committee voted unanimously at its Jan. 16 meeting to oppose the bill. Geoff Herman, the MMA's director of state and federal relations, said in a prepared testimony that the organization opposed the bill because it would create a slippery slope toward other abatements and because of its "unbalanced approach."
"If homeowners are entitled to an abatement for property that is destroyed after April 1, why is the municipality not entitled to tax revenue to help with everyone else's taxes when property is created after April 1?" Herman asked.
At the work session, Herman suggested a series of amendments to the bill, including one that would force municipalities to pass an ordinance making the law applicable locally and another that would limit abatements to those whose homes were destroyed during a narrow window of time at the beginning of the tax year.
"They don't say this, they cite problems with consistent application and legal barriers, but at bottom, I think their interest is in preserving revenues for municipalities," Cooper said of the MMA.
Sen. Douglas Thomas, R-Somerset, said the bill was unfair because it applied to primary residences, but not vacation homes or businesses.
"Taxes stink. It's too bad we have to collect them at all. But we do." Thomas said. "If they need it for poverty, the thing is there. But if Stephen King's house burned down, would he get an abatement? And some poor mom and pop that's struggling to feed a family, their business burns down and they get nothing?"
Cooper, who authored the LD 1610 concept bill in October, said after the work session that she would continue working on the bill with the input of Rep. Nathan Libby, D-Lewiston, and other members of the taxation committee. She said she also plans to expand the act to include commercial buildings and second homes.
"This is one of many difficulties these people, many of them elderly, are facing with the loss of their homes," Cooper said of her constituents. "They may have insurance, but that doesn't cover all the expenses of putting their lives back together, as well as the emotional stress of it all. It just seems like the community should have a heart."