AUGUSTA — Residents from Harpswell, Chebeague Island and other
coastal communities urged lawmakers on Tuesday to provide tax relief
to waterfront landowners in the same way that the state's tree
growth program provides relief to inland landowners.
But critics say the proposal would provide the greatest benefit
to wealthy out-of-staters who own vacation homes, and could shift
the tax burden to year-round residents who don't live on the water.
The Chebeague proposal dominated much of the discussion during
Tuesday's marathon of public hearings on tax reform. The
Legislature's Taxation Committee heard testimony on 10 bills,
including three comprehensive proposals that would broaden the sales
tax and provide targeted relief to people who are struggling to pay
their property taxes.
About 120 people attended the hearings, including 25 people from
Chebeague Island and 15 from Harpswell. Residents also came from St.
George, Kennebunkport, Yarmouth, Freeport, Brunswick, Westport,
Tenants Harbor and Ogunquit.
Two of the bills, taken together, comprise what has been called
"the Chebeague plan." The proposal would cap annual land assessment
increases at 2 percent for those who voluntarily join a new land
bank program. To take advantage of the program, people would have to
agree not to sell their land to anyone outside their family. If they
did sell, they would be hit with a huge penalty paid to their city
Supporters believe the penalty would generate enough revenue over
time to compensate communities for the immediate drop in tax
revenue. They say that it would work much like the state's tree
growth program, which allows wood lots to be taxed at a lower rate
but penalizes landowners when they sell to developers.
At Tuesday's hearing, many coastal residents testified that
skyrocketing land assessments are threatening to tax them out of
homes they have owned for decades, and in some cases their entire
lives. They also said the tax system is forcing people to break up
large tracts of undeveloped coastal land and sell off lots, leading
to gentrification and sprawl.
"We have reached the critical point, and something has to be
done" said Malcolm "Laddie" Whidden, a lobster wholesaler from
Harpswell. "If not, we are going to displace whole segments of the
communities. The working and residential waterfront, as well as many
other places in the state, will be beyond the means of the current
Donna Damon, a Chebeague Island resident and Cumberland town
councilor, said that rising real estate assessments are creating
havoc on the island, and that people's only option now is to
pressure their neighbors to not sell their homes. Every time a house
is sold for an enormous profit, she said, assessments on neighboring
land soar. Some said their taxes have doubled and tripled in just
"We are being taxed out of our homes by a process that pits
neighbor against neighbor," Damon said.
But Nathan Michaud, a community planning officer for the
Rockland-based Island Institute, said in an interview outside the
hearing room that he worries about the unintended consequences of
the Chebeague plan.
He noted that owners of vacation homes would be able to take
advantage of the program because wealthy people can afford to buy
expensive coastal property and hang onto it forever as a family
legacy. Working families on islands, he said, would find it hard to
keep their properties because they need the equity if they decide to
make a move. Consequently, very few would participate in the
program, he said, and they would have to absorb the tax savings
enjoyed by wealthy out-of-staters.
"It's really important you take these things into account,"
Whidden said that owners of vacation homes contribute a lot to
the community, so it would be unfair to exclude them. David Hill, a
Yarmouth resident who owns a vacation home on Chebeague Island, said
the proposal could survive if vacation homes are excluded.
"If you include just the year-rounders," he said, "that's fine.
But it's not right to exclude a large portion of the community that
contributes so much."
On Chebeague Island, he said, many of the owners of second homes
are moderate-income people whose families have owned their
properties for decades and hope to pass them to children. If rising
taxes force them to sell, he said, they will be replaced by the
"super rich" who have no long-term ties to the island.
The Taxation Committee will hold a work session on the proposal
Thursday and may vote on it.
Staff Writer Tom Bell can be contacted at 623-1031 or at: