Property tax revaluations put local leaders in a tough position. State funding can help.

By David Farmer

There is no job in politics harder than being a town councilor or selectperson.

OK. Maybe being president is harder. 

But otherwise, serving in local government has got to be toward the top of the list.

It is thankless, unpaid and very personal. The typical elected town officials have no dedicated staff, and they must deal with complex and emotional issues — all of which directly impact the people in their lives.

The hours are long. The meetings can be brutal. And they are often limited in what they can do by the state and federal government.

For local leaders in Portland, South Portland and Bangor — and probably cities and towns, too — the job is about to get even harder. They are facing a contentious revaluation process that could see drastic tax increases for homeowners.

Fort Fairfield went through a similar process last year and for many families it was brutal.

Maine law requires that municipalities revaluate the price of commercial and residential property to ensure that residents and businesses are being taxed fairly, based on current market conditions.

Towns and cities are required to reevaluate property values every 10 years, but that deadline often slips. In Fort Fairfield, it had been 20 years. Portland last revalued property in 2006.

It’s a terrible and thankless job, and municipalities often delay the process as long as possible before they put at risk state funding that requires an up-to-date valuation.

Revaluation doesn’t, in and of itself, guarantee that any individual property taxpayer will see their tax bill change. For a municipality, it’s usually a revenue neutral process that sees property valuations rise and the mill rate decrease.

But, and this is a big but, current market conditions suggest that property values are going to shift dramatically from businesses to residential property owners.

Maine’s housing market is booming. Businesses, on the other hand, have been hit hard by the pandemic and changes in the way people work and shop. While it’s too soon to say for certain how the market for office and retail space will rebound post-COVID-19, it’s safe to assume that at least some companies are going to need less space and less parking.

In a memo to the Bangor City Council, reported by the Bangor Daily News, the city’s tax assessor pointed to the hot residential real estate market in describing the need to shift valuation to residential properties and away from business.

In South Portland, the city manager in March warned that the revaluation could cause residential property owners to see tax bill increases of 10 percent, 20 percent or 30 percent if the mill rate were to remain flat. The city is likely to lower the mill rate in response, but there will definitely be winners and losers — and those winners and losers aren’t picked based on their ability to pay, only on the value of the property they own.

One longtime resident of the city told the council that she could face an increase of 50 percent for her Willard Beach home. Her solution: sell plasma.

Portland will release its revaluation numbers during the week of June 28, and appeal hearings will start in July. Even with a 100-year-old house that needs new siding and a paint job, I’m nervous about the numbers. So are my neighbors.

Gov. Janet Mills has proposed increasing state funding for both K-12 and revenue sharing, which could help to ease the sting of revaluation while also providing more funding for cash-strapped municipalities that are going through the process this year. Her budget would also finally meet the state’s commitment to fund 55 percent of education.

That increased funding will make a big difference in local budgets and should help everyone who pays property taxes.

Property taxes aren’t progressive, and they aren’t tied to a person’s ability to pay. They’re largely based on elements outside of the owners’ control, particularly for longtime residents and those who are retired or living on a fixed income.

Increased state funding — which is funded through the income tax and sales tax, primarily — is more closely tied to a person’s ability to pay. The more that towns and cities can diversify their revenue streams and reduce their reliance on property taxes, the better.

Come June, many homeowners in Portland are in for serious sticker shock. The city council and the mayor are likely to feel the majority of the backlash. But relief rests on the work happening now in Augusta.

Like I said, serving on the city council is a thankless job.

Farmer is a public affairs, political and media consultant in Portland, where he lives with his wife and two children.