TRENTON — A local option sales tax on overnight stays at hotels, motels and other lodging places could really help the town keep up with the rising cost of education, members of the town’s School Evaluation Options Committee told state Sen. Louis Luchini (D-Ellsworth) last Tuesday.
Luchini said a local option tax bill, which narrowly passed the House last session and was rather soundly defeated in the Senate, will be brought up again in the session that begins in January. But he indicated the odds of passage are probably still pretty long.
“I think some (legislators) are just fundamentally opposed to it,” Luchini said. “They have taken an oath before they got into office to never support a tax.”
A local option sales tax law is exactly what it sounds like: It would allow voters in each municipality to decide whether to levy a tax on certain sales or services to help offset local expenses. The idea has been raised a number of times in the Legislature, but has always failed.
The bill that was defeated in the Senate this past June would have allowed cities and towns to levy a tax of up to 1 percent on short-term lodgings, so a large percentage of those paying the tax would have been from out of state. Seventy-five percent of the money collected statewide would have gone to participating municipalities, and 25 percent to the Maine Rural Development Authority.
Luchini said of the effort to revive the bill in the upcoming Legislative session, “We will try to see if there’s a way to mold it, to tweak the wording to find some way to rally more votes.”
Opposition to the local options tax “makes no sense to me,” he said. “It’s frustrating because you can make it so it targets out-of-state people.”
Trenton’s School Evaluation Options Committee (SEOC) was formed earlier this year by the Board of Selectmen to look for ways to reduce or offset the cost of education, which has risen steeply over the past few years.
Trenton, like all of the other towns in the Mount Desert Island Regional School System, is a “minimum receiver” of state funds. That means that, because of relatively high property values, the town receives state supplements only for special education, and only for a portion of that. So, education funding comes mostly from local property taxes.
“Our schools are minimum receivers, but a majority of the children and families in our town are low income, which makes it very difficult,” said SEOC Chair Susan Sargent.
Committee members Sue Starr and John Bennett said rising property taxes are especially hard on older people on fixed incomes and could cause some to lose their homes.
Bennett said that, up until two or three years ago, Trenton’s property tax mil rate was much lower than Ellsworth’s, making it an attractive place to live, even though Trenton provides few municipal services.
“Trenton has been a hot real estate market,” he said. “But as the mil rate continues to go up, why not buy in Ellsworth and receive all those amenities — water, sewer, police, public works?
“I guess we kind of fear the town could die, the school could (close) if we don’t get a handle on this.”
Luchini said that, while a local option sales tax is probably a long shot, the Legislature has taken other action in the last couple of years to increase support for public education.
“One thing we have done that has been particularly helpful is increase the state’s minimum special education subsidy,” he said.
In fiscal years 2001-2018, the state gave schools between 30 percent and 35 percent of the cost of special education. The Legislature increased that to 40 percent for 2018-19, to 45 percent for the current fiscal year and to 50 percent for fiscal year 2020-21 and beyond.
“It’s still not great, but it’s a pretty big jump from 30 percent,” Luchini said. “That was in response to issues we’ve been having in a lot of places.
“Special ed costs aren’t unique here [in Trenton]. They’re kind of blowing up everywhere, and that’s something we’re looking at across the state for ways to deal with it.”
Luchini said the Legislature created a commission about 18 months ago “to analyze it and give us recommendations on some way the state can bear a bigger burden of special ed.”
He said the commission has not yet produced a report.
“When that comes out, I think it will be interesting to see if there’s anything we can do.”
Luchini told the SEOC that the Legislature also has raised the homestead exemption and enacted a property tax fairness credit.
“The goal was to target low-income property taxpayers rather than the seasonal out-of-staters who own the highest valued property,” he said.