To the Editor:
I’m writing in response to Mr. Merian’s letter to the editor in the July 22 edition of the Islander.
The last full revaluation was completed in 2006. Market values have increase significantly since then. The sales ratio for Bar Harbor last year (pre COVID) was around 70 percent. Some areas of town were in the 50s, other areas were in the 80s, and the revaluation project was planned several years ago because market values were already going out of compliance. COVID only increased the noncompliance – it did not cause it. Assessment always follows the market. If the market goes down, the assessments will follow. However, in the 20-plus years I have worked in Bar Harbor, I have yet to see a significant market correction. Market values tend to flatten out in Bar Harbor. The town does not control the real estate market; however, we are required by state law to keep assessments within a certain percentage of “market value.” The minimum allowed ratio is 70 percent; the maximum is 110 percent.
It appears Mr. Merian is assuming that the value increase equates to a similar tax increase. Revaluations do not generate revenue; they redistribute tax burden. The town can only raise what is voted on at Town Meeting within 5 percent for overlay. Therefore, if values increase, the tax rate must, by state law, decrease to compensate. Revaluations do not create a windfall, as Mr. Merian is implying.
The state Legislature is the only body in Maine that has the “power to tax.” This is stipulated in the Maine Constitution Article I Section 22. “Section 22. Taxes. No tax or duty shall be imposed without the consent of the people or of their representatives in the Legislature.” (The “people” in this case would be a statewide referendum vote). The Legislature has voted down local option taxes every session for decades and this year was no different.
The town has no legal authority to impose any tax other than the property tax. It also can’t use different tax rates for different property types or property owner types unless the Legislature passes that specific change into law. A referendum vote could demonstrate the “will of the people” but the Legislature would be the one to ratify it into law.
I cannot speak to other revenue sources, but it is my understanding that these funds are restricted in how they can be used. For example, parking revenue must be used for parking expenses and maintenance of town ways.
We do not have the staffing to conduct a full revaluation “in house.” That is a possible route; however, this would have a higher cost than hiring a contractor, since additional staffing and resources would be required.
We have not had appeals yet, only informal hearings. Formal appeals can be filed within 185 days of commitment, and this is true in any year, not just a “reval year.” We are not at that stage yet. We have to commit taxes first before formal appeals with the town can be filed.
Again, a 25 percent rise in valuation does not necessarily equate to a 25 percent rise in taxes. The impact notices specifically state NOT to multiply the new assessment by last year’s tax rate for this reason. We have not calculated the new tax rate yet because, until the values are finalized and turned over to the town, we do not have all the numbers to calculate it.
Bar Harbor Assessor