Compromise budget brings changes to property tax reduction program
Last fall, I was honored that the residents of District 45 elected me to represent them in the Maine Legislature, and I will always keep my focus on local issues and do what is best for the people of my district.
A lot can be said about Republicans and Democrats bickering in Washington and accomplishing little. In Augusta, however, we did a far better job of working together. Democrats, Republicans and Independents found common ground in many areas important to Maine families. We were able to make a final payment to Maine hospitals, totaling $490 million in combined state and federal dollars. We have paid our bills and soon will be considering transportation and economic development bonds to ensure a stronger economy moving forward.
This session, the Legislature passed a bipartisan budget that lessened the drastic property tax hike in Gov. Paul LePage’s original budget proposal. The budget that we passed was one reached through difficult compromise. I had and continue to have serious concerns about some of the budget’s shortcomings. I wish we had passed a budget that preserved more state aid to cities and towns and that did more to reduce the property tax burden on our residents. I also wish we had saved certain services for those with nowhere else to turn. The previous Legislature passed income tax cuts largely benefitting the wealthy that led to nearly half of the budget gap. I wish this weren’t the case, but we weren’t able to repeal those tax breaks in our divided government. The governor’s proposal completely eliminated revenue sharing between the state and municipalities and the Legislature was able only to restore two-thirds of that in the budget we passed. I promise to continue fighting for a fairer tax system, one that does not disproportionately hit working families.
One compromise I was very disappointed with was the elimination of the Circuit Breaker refund program, also known as the Maine Residents Property Tax and Rent Refund. This program was a refund of up to $1,600 for low-income renters and homeowners. Maine’s Circuit Breaker provided targeted relief to those who need it most. If you were planning on applying for a Circuit Breaker rent and property tax refund, that program is no longer available.
The program has been replaced with a Property Tax Fairness Credit. However, the income eligibility and the amount of credit have been drastically reduced, and the new credit can’t be claimed until next year. This means that we are going to go an entire year without any property tax refund at all. For many of our fellow citizens, this is a very real hardship.
The Property Tax Fairness Credit will provide up to $300 or $400 for those 70 and older. In addition, those who have applied each year for the Circuit Breaker refund will need to wait until January, rather than applying any time after August.
Beginning in January, the 2013 Maine Individual Income Tax Form 1040ME will include a worksheet to calculate the Property Tax Fairness Credit. To receive the credit, you must have been a Maine resident for any part of the tax year, lived in a home that you rented or owned, had an adjusted gross income of not more than $40,000 and paid property tax on a home in Maine during the tax year that was more than 10% of your Maine adjusted gross income, or paid rent to live in a home or apartment in Maine during the tax year that was more than 40% of your Maine adjusted gross income.
If you qualify, you will receive no refund this fall for rent or property taxes paid in 2012. Your refund for 2013 rent or property taxes will come earlier, but will be smaller than what you received under the Circuit Breaker.
For more information about the new Property Tax Fairness Credit, please visit maine.gov/revenue/taxrelief.
While this tax credit is not ideal, it was the result of hard budget negotiations and difficult compromises. House Speaker Mark Eves will be presenting legislation during the next session to increase funding to the program with the hope of strengthening it. You can be assured I’ll be advocating for strong legislation to lessen the crippling impact of property taxes on our businesses and citizens, especially our elderly, disabled, and working poor. It’s the right and fair thing to do.
I encourage my constituents to apply for the Property Tax Fairness Credit when it is available. If you have any questions about the program, please do not hesitate to contact me at 207-385-5226.
Rep. Brian Jones is serving his first term in the Maine Legislature and represents Burnham, Freedom, Knox, Montville, Palermo, Thorndike, Troy and Unity.