Local sales tax a good option for Presque Isle
To the editor:
I would like to take a moment to explain a bill in the state legislature which could decrease the enormous hardship on Presque Isle property tax payers.
The bill is LD 594, An Act To Allow the Creation of a Local Option Sales Tax by Referendum, sponsored by Sen. Linda Valentino of Saco. This bill allows a municipality to impose a local option sales tax of no more than 1 percent by local referendum. Certain items, such as motor vehicles and major household appliances, are excluded from the local option sales tax.
If this bill passes, registered voters in Presque Isle could go to the polls and decide whether or not to collect a 1 percent sales tax on transactions that occur within the city of Presque Isle. Revenue from this 1 percent tax would go to run the city and presumably lower our mil rate and make Presque Isle a more affordable place to build or purchase property. As well, a local option sales tax would spread the burden of running the city amongst all who utilize it, whether they own property in Presque Isle or not.
According to the Bangor Daily News, Maine is one of only 12 states where municipalities do not have the authority to levy local option taxes and one of just five states that do not allow local hotel taxes.
As Mr. Bennett explained in his February letter, we face the very real possibility of losing our Homestead Exemption and revenue sharing within the next year or two. The Community Center that we just can’t live without will result in a permanent .71-mil rate increase according to the Community Center’s website. These are property tax increases on our horizon which will add to the crippling weight we are currently living under.
Earlier this year I looked at some important numbers from the Tax Assessor’s Office. In 2010, the total assessed value of all the taxable property in Presque Isle stood at $514,670,350. In 2014 the assessor is listing $510,580,380 of taxable property in Presque Isle. So the city of Presque Isle has stopped growing and is in a state of decline where taxable property is concerned.
To make up for the lost revenue, the city increased the mil rate and collected $12,978,953.26 in taxes in 2014 as opposed to $12,094,753.23 in 2010. Nearly a million dollars more to run the city and our schools, despite some unprecedented cost-cutting by recent councils. Continued decreases in the city’s total assessed value will necessitate continued increases in the mil rate just to pass a flat-funded budget. If you want to give city or SAD 1 employees a cost of living increase, or fund the double-digit increases in their health care premiums, that will mean an additional tax hike above what it took to reach the flat-funded level. The alternative is to cut services.
The bottom line is this: people figured out a long time ago that you can live in a community surrounding Presque Isle, pay half the property taxes and enjoy nearly everything Presque Isle has to offer free of charge. A 1 percent local option sales tax will not be enough to discourage citizens in surrounding communities from patronizing Presque Isle businesses. I want to repeat what I said earlier: a local option sales tax would spread the burden of running the city to all who utilize it. Until we reduce the property tax rate, we cannot hope to grow the tax base because it is currently an unsound financial decision to build here.
I urge the property tax paying citizens of Presque Isle to research LD 594 and contact your state legislators to express your opinion for or against LD 594.
David A. Wyman
Presque Isle
