South Portland residents passionately spoke at last week’s City Council meeting about the recent property tax hikes that blindsided many homeowners last month.
This past Tuesday, a number of residents turned out to make their concerns heard over the sudden and substantial property tax increases they faced when first opening their bills in August, some of whom were quite emotional in their presentations.
During this same meeting, Councilors unanimously approved a resolution directing the local legislative delegation at the State House to “work toward a more fair and equitable system of real property taxation, as well as other measures to reduce property tax burden.”
In August, residents were shocked to find that their FY25 property tax bills were significantly higher than in previous years, largely as a result of the City’s most recent revaluation.
The City’s Frequently Asked Questions page revealed that a primary effect of this revaluation was to shift the majority of the tax burden from commercial properties to residential ones, as “commercial property sales…have been outpaced by the residential market.”
“In other words, property value growth on the residential side will outpace growth on the commercial side and as a result, residential property owners will bear more of the property tax burden,” the City wrote.
Generally speaking, in order to stay in compliance with State Law, municipalities undertake revaluations when tax assessed values fall below 70 percent of market values, whether that be due to the passage of time or a significant shift in the housing market.
Tied to this ratio are the value of residents’ property tax exemptions — such as the homestead exemption. For example, if a municipality’s property assessment is calculated to be at 80 percent of market value, homeowners are only eligible to take 80 percent — or $20,000 — of the state’s $25,000 homestead exemption.
Since 2019, home prices in Maine have nearly doubled, according to data tracked by the St. Louis Federal Reserve. Those new sale prices contribute to the new valuations of houses that aren’t on the market, which means Mainers who have owned their homes for 20 years or more are suddenly on the hook for paying twice the property tax — even if their income has hardly grown.
“My taxes went up almost 60 percent,” resident Millie Pelletier said during last week’s meeting. “I went in and asked for a reassessment. I’m a hundred percent disabled. I do not have a kitchen. My house has connecting bedrooms so it’s not technically a three-bedroom house, and the third bedroom has no closet.”
“The house has been in my family for a hundred years next month,” said Pelletier. “I took the house over. It needed a lot of work, hoping to save it. But now I’m afraid I’m the one who’s going to lose it.”
“They did say I had the record tax increase when I went into the assessor’s office,” Pelletier said, getting visibly choked up as she spoke.
Another resident — Donna Kane — said that she’s been a South Portland taxpayer since 1987 and has never seen anything like this.
“I’ve had property taxes increased in the past before,” Kane said, “but I was absolutely flabbergasted when I opened up my recent bill and it was 40 percent higher.”
“I talked to my neighbor who’s 90 years old. She was both outraged and said her bill was outrageous because it has doubled,” continued Kane. “And there’s something wrong. There has got to be something wrong.”
Kane went on to note that she spent thirty years serving in municipal government, giving her an understanding of how these processes work.
“I have never seen anything like this. I’m here tonight to ask you, the Council, to make tax relief your number one priority. We’ve got to do something, and we’ve got to do it now,” said Kane. “I can’t make any sense of it.”
“When I opened our property tax bill, I gulped,” said a resident of 33 years. “I texted everyone in our neighborhood asking have people looked at this. It was shocking.”
“We bought our house 35 years ago,” said another homeowner. “It looks like I picked a bad time to retire. We got our bill, and I went to reach for the Aspirin bottle because there was some pain. It went up 40 percent.”
“I’ve heard it explained that it was math,” he continued, “but there’s another equation in there: what the tax bill is and a fixed income.”
“Something has got to be done,” he said. “Please think about what can be done.”
Several residents noted concerns over local spending, suggesting that Councilors ought to reconsider how taxpayers dollars are being spent in order to reduce the property tax burden on homeowners.
“[The] only thing you can control is spending,” said one resident. “I think there are some fluffy things, some feel good things, that we’re all paying for certain special interests, but for anyone who doesn’t fit into that, there’s not much equity.”
“You control the spending,” said a 70-year-old homeowner. “Now is the time we can do something. City employees make three to seven times my income, and they’re working on housing issues that will not help those of us who are hit with residential taxes.
“We have no place to go,” the taxpayer said, getting noticeably emotional. “I think its time to pause the current spending, slash services, relook at the budget, to secure our housing. We’re talking about people need housing, we need to stay in our houses.”
Another resident asked the Council to identify who “knew about the revaluation process before they agreed to pass a budget of six to eight percent.”
“It seems rather disingenuous to tell people to go vote for a budget where they’re expecting a six to eight percent tax increase and you don’t tell them, guess what we’re doing, reevaluating your property,” he said.
“Which Councilors knew about the revaluation process,” he continued, “and did you think it would maybe make sense to let voters know, to let the community know, who have paid taxes here their whole lives and who seem to have an increase in taxes every single year.”
City Manager Scott Morelli explained later in the meeting that neither he nor any members of the City Council “had [any] idea” about “the extent to which this property adjustment” would impact homeowners.
“We had no idea, and I can speak for members of the Council in this case, because none of them knew, because I didn’t and staff didn’t, the extent to which this property adjustment would impact you,” Morelli said.
“Property adjustments are done just about every year, so its not uncommon for the assessor to make tweaks here and there,” Morelli continued. “What was unprecedented was in early July when we said not only is the tax rate not going to go up, but it’ll go down by over a buck because we’ve gained so much in value.”
“It wasn’t anything that this Council knew about or staff knew about until probably around July 10th or so,” said Morelli.
A breakdown of the City’s budget was presented during last week’s meeting as well, suggesting that there was not much room on either the school or municipal side for costs to be cut in order to save taxpayers money.
Click Here to Watch Last Week’s Full City Council Meeting
Councilors went on to unanimously approve a resolution directing the City’s delegation in Augusta to pursue policies designed to help alleviate the burden of property taxes.
Among the recommendations included in the Councilors’ proclamation were substantially increasing the homestead exemption and limiting the “allowable annual increase in assessed value” of primary residences.
Councilors also proposed authorizing a “real property transfer tax” to be paid “at the time real property is sold,” as well as a local option sales tax.
Recommendations further included increasing the property tax fairness credit, pursuing other “means-based property tax relief programs,” and altering the revenue sharing formula so that “communities with high values and lower tax rates are not penalized.”
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