Taxpayer Bill of Rights (Question 4) Needed Now More than Ever: Between FY 2008 and FY 2009, 58 percent of Maine's towns lost a combined 3,056 people while those towns increased property taxes by $45 million.
October 5, 2009Author: Mr. J. Scott Moody
Source: Path To Prosperity Issue Twelve
Taxpayer Bill of Rights (Question 4) Needed Now More than Ever:
Between FY 2008 and FY 2009, 58 percent of Maine’s towns lost a combined 3,056 people while those towns increased property taxes by $45 million.
By J. Scott Moody
A startling picture of dropping population in Maine’s towns combined with an increasing property tax burden is creating a vicious economic cycle of declining prosperity throughout Maine. This cycle illustrates the need for the Taxpayer Bill of Rights (Question 4) provision which will be on the November ballot. Consider these facts:
· Population data from the U.S. Department of Commerce’s Census Bureau reveals that, between FY 2008 and FY 2009, 58 percent of all Maine towns lost population. These towns represent 55 percent of Maine’s population – so it’s not just a small town problem. Overall, these towns lost 3,056 people (0.4 percent population) falling to 719,538 from 722,594 residents.
· As a result of population decline, these towns are being thrown into a property tax crisis. Despite this drop in population, these towns collectively increased their property tax collections by $45 million to $1.082 billion in FY 2009 from $1.037 billion in FY 2008. This rising property tax burden can lead to a vicious cycle where it pushes more folks to leave which, in turn, increases the property tax burden on remaining residents which, in turn, pushed more folks to leave and so on. Table 1 shows all the towns that lost population between FY 2008 and FY 2009. A summary of some of the largest towns follows:
· Portland lost 170 residents or a decline of 0.3 percent of all residents. At the same time, per capita property taxes jumped $97 for every man, woman and child (4.8 percent higher) to $2,101 from $2,004.
· Bangor lost 45 residents or a decline of 0.1 percent of all residents. At the same time, per capita property taxes jumped $103 for every man, woman and child (7.5 percent higher) to $1,485 from $1,382.
· Lewiston lost 66 residents or a decline of 0.2 percent of all residents. At the same time, per capita property taxes jumped $40 for every man, woman and child (3.1 percent higher) to $1,312 from $1,272.
· Biddeford lost 137 residents or a decline of 0.6 percent of all residents. At the same time, per capita property taxes jumped $80 for every man, woman and child (5.1 percent higher) to $1,651 from $1,571.
· Augusta lost 63 residents or a decline of 0.3 percent of all residents. At the same time, per capita property taxes jumped $51 for every man, woman and child (3.7 percent higher) to $1,422 from $1,371.
In each case, the dynamic between lower populations and higher per capita property taxes is clearly unsustainable and will eventually lead to crushing property tax burdens – if they aren’t already there.
Fortunately, Mainers will get a chance to break this vicious cycle by voting in favor of the Taxpayer Bill of Rights (Question 4) that is on the ballot in November. The Taxpayer Bill of Rights (Question 4) sets a speed limit on the growth in local spending which may never grow faster than the ten-year average real personal income growth plus inflation (but never less than 0). If politicians want to exceed the speed limit, voters will get to make the final decision.
Over time, The Taxpayer Bill of Rights (Question 4) will reign in the runaway spending at both the state and local level. Without this fiscal discipline, the vicious cycle of declining population and rising property tax collections will cripple Maine’s economy.
For decades, politicians have put off the necessary reforms that would have prevented this looming disaster. It cannot be put off any longer. It is time for Maine voters to enact the Taxpayer Bill of Rights (Question 4).
