Editorial: Money in your pocket



For 305,000 Maine homeowners, the new year kicked off with a surprise gift in the mail, courtesy of the state of Maine. Property tax relief checks for $104 payable to every household that qualified for the homestead exemption. Politicians are squabbling over which party deserves credit for the idea. Maine Speaker of the House and U.S. Senate candidate Sara Gideon (D-Freeport) runs TV ads touting last year’s vote to release the funds to homeowners in 2020. Maine Republicans vigorously point out the Democrats’ failure to acknowledge it was their party that passed the original law, establishing this $30 million fund that, up until last year’s switch to property tax relief, was intended to reduce Maine’s income tax rate.

With many households running on budgets that are stretched beyond the limit, an extra $104 helps, and for some, it helps a lot. But, because of the one-time nature of this pool of money and the absence of a distribution model based on financial need, property tax relief is a subjective claim rather than a factual cause and effect. One could just as readily describe the distribution of funds as election year candy.

State House leaders declare that a number of state programs such as the homestead exemption, revenue sharing and the state share of local education provide property tax relief. But ultimately it is a local decision as to whether these revenue transfers from the state to schools and communities translate to property tax relief or provide the opportunity to deliver more services sought by the local citizens.

The $104 checks should be viewed as a mini-economic stimulus, rather than property tax relief. This quick injection of $30 million in the pockets of Mainers will be saved, spent and circulated through the economy, generating a positive economic ripple. This idea is more akin to the federal cash-for-clunkers program issued during the height of the great recession. Money to stimulate and lubricate the economy.

A state program that does deliver direct and targeted property tax relief to Mainers is the Property Tax Fairness Credit. It is superior for many reasons. The Property Tax Fairness Credit is available to homeowners and renters. It is a stable, established program, available every year. It targets relief based on your property tax burden. The greater your property tax burden the more robust the relief. It involves a simple and highly efficient application on your state income tax form and it pays you a refundable credit, even if you owe no income tax. State political leaders can join together and rightfully claim that the Property Tax Fairness Credit delivers.

Legislators should focus on long-term property tax relief — or at least on better delivering on the taxes Mainers pay already.

 

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