“For every complex problem,” H.L. Mencken wrote, “there is an answer that is clear, simple, and wrong.”
Take property taxes. They’re too high because the state has never adequately addressed education funding, because homeowners must bear most of the cost of county government, and because, since the current administration took office in Augusta, municipal revenue sharing has been cut by more than $600 million. Among many other reasons.
The property-tax issue is complicated. So naturally, Republican Gov. Paul LePage has a solution that’s Menckesque.
“School budgets are not commonly blamed, but are normally blamed for tax increases,” LePage proclaimed in his State of the State address.
There’s no law that says the governor has to make sense.
Undeterred by incoherence, LePage continued, “The real culprit is the tremendous amount of land and property value we’ve allowed to be taken off our tax rolls, leaving homeowners to pick up the tab.”
LePage then launched into a tirade about land trusts, which he implied were responsible for exempting $18 billion worth of land in the state from taxes. While that’s a roughly accurate estimate of the total amount of tax-exempt property, it’s also misleading.
A big chunk of that exemption is composed of hospitals, churches, veterans’ organizations and charities. But most of it – nearly $12 billion worth – is owned by local, state and federal governments.
For instance, LePage lives in the Blaine House, a tax-exempt, state-owned mansion. But the city of Augusta still plows the streets around it, maintains the traffic light on the corner and sends regular police patrols through the neighborhood, all on the property taxpayers’ dime. To date, the governor, who pays no rent and isn’t charged for food or utilities, has made no mention of reimbursing the municipality for the expenses incurred on his behalf.
Back to land trusts. They actually account for about $1 billion worth of property. But that’s not all tax-exempt. According to the Natural Resources Council of Maine, 94 percent of trusts pay property taxes and another 4 percent pay a fee in lieu of taxes.
But as an investigative article from Pine Tree Watch pointed out, there’s a big difference between the tax rate on homes and businesses and those on woodlands, mountains, and lakes. While the average taxpayer receives a bill calculated on something close to the fair market value of the property, land trusts get a serious discount. Some of their assessments amount to as little as 5 percent of the preserved land’s actual worth.
In return, though, the public does benefit. The Maine Land Trust Network says the 600,000 acres owned by its members and the 1.9 million acres preserved through agreements with private owners provide over 1,200 miles of hiking trails, nearly 600 miles of snowmobile trails and 60 access sites for commercial fishing. Most of these properties are open to hunters, as well.
Trouble is, the burden of paying for this environmental and recreational bounty isn’t evenly distributed. And that’s where LePage has a point.
According to Pine Tree Watch, the eight poorest counties in Maine are also the eight with the highest percentage of land under conservation easements. In Piscataquis County, more than a quarter of the land is exempt from paying most of its property tax bill. Somerset and Washington aren’t far behind. In economically depressed rural Maine, property sellers know land trusts are often the only option as buyers, because the owners have received tree-growth tax credits for so long, they’d have to pay a huge penalty if they tried to sell their land for development.
In contrast, in the state’s eight richest counties, no more than 4.35 percent of the land is similarly constrained. Land trusts divert little tax revenue and have a minimal impact on wealthy people grabbing prime locations for their McMansions.
Nobody is saying conserving land is a bad idea. Well, nobody but the governor. But LePage needs a boogeyman to make it appear somebody else is chiefly responsible for high property taxes.
The rest of us think saving open space for future generations is a worthy enterprise. Unfortunately, the state has ignored how the consequences of that investment are distributed. The deal seems to be unfair to the most economically disadvantaged sections of Maine. Those towns ought to have some say before more large tracts are taken off the tax rolls.
As Mencken might have advised us, crafting legislation that actually accomplishes that won’t be simple. But unlike LePage’s approach, it won’t necessarily be wrong.
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