HomeMy WebLinkAbout1997-05-28 97-240 RESOLVECOUNCIL ACTION
Item No. 9I-240
Item/Subject: Urging Maine Legislature and Governor to Authorize
Municipal Service Fees On Tax -Exempt Properties
Responsible Department: Legal
On May 19th, the U.S. Supreme Court announced its decision in Camps
Newfound/Owatonna. Inc. v. Town of Harrison, a tax Case on appeal
from the Maine Supreme Court. In its decision, the U.S Supreme
Court overturned the provisions of 36 MRSA S 652(1)(A)(1), which
Previously limited the property tax exemption for charitable
nonprofit corporations that primarily serve nonresidents of the
State Of Maine to the first $50,000 of assessed value. The effect
of the U.S. Supreme Court's decision is that charitable nonprofit
(cont'd on next page)
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Department Head
Manager's Comments:
Associated Information: Resolve, statute
Finance Director
City Holicit
Passage
First Reading
Referral Page 1 of 5
� Assigned to councilor Sullivan
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CITY O OR
9J-240
May 28, 1997
(TITLE.) FE501,0eBrging Maine Legislature and Governor to
..... .......... ........... _.... ..... ... .._.... .... .... ........ .... ................... _..._... _.........
.
Authorize Municipal Service Pees on
Tax -Exempt Properties
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DEBDLVDD,
WHEREAS,
the City of Bangor, as of April 1, 1996, was the host
community to more than $162 million of non-governmental,
tax-exempt properties; and
WHEREAS,,
the City Of Bangor is also the host community to more
than $80 million in State-owned tax-exempt properties;
and
WHEREAS,
Bangor residents and taxpayers are required to provide
police and fire protection, fire hydrant service, street
maintenance, and other public services to tax-exempt
properties free of charge; and
WHEREAS,
provision of free municipal services to tax-exempt
Properties imposes substantial burdens on Bangor
residents and taxpayers and substantially increases
Bangor's property tax rate; and
WHEREAS,
Bangor's situation in regard to tax-exempt properties is
replicated in hundreds of communities across the State
of Maine; and
WHEREAS,
for more than 20 years, the Maine Legislature has
ignored calls by Maine's municipalities to provide
significant relief from the local property tax burdens
created by tax-exempt properties; and
WHEREAS,
the Legislature has specifically declined to take
necessary steps to broaden municipalities' revenue base,
to limit the growth of tax exempt properties, or to
adopt workable service fee legislation; and
IN CITY COUNCIL
May 29, 1997
Passed
CI CL
97-260
EES0LVE
Uieine Maine Legislature and Governor
to Authorize Municipal Service Fees on
Tax -Exempt Properties
97-240
WHEREAS, in the current legislative session, the Legislature's
Taxation Committee has recommended as "ought not to
pass" proposed legislation that would have provided
comprehensive restructuring of the State's tax structure
(LD 1742) and that Would have created a study commission
to draft a comprehensive tax reform package (LD 202);
and
WHEREAS, the State of Maine continues to under -fund State aid to
education, general revenue sharing, and other categories
of State aid to municipalities, such that in default of
adequate levels of State aid, local property taxes now
constitute 458 of all governmental revenues raised by
the three major taxes in Maine (property, sales, and
income tax); and
WHEREAS, the Legislature continually receives proposals, such as
LD 11 in the current legislative session, to expand
still further the types and nature of properties
eligible for tax-exempt status; and
WHEREAS, the U.S. Supreme Court, on May 19, 1997, in Camps
Newfound/Owatonna.Inc-Harrison, declared
that Maine towns may no longer enforce the Provisions of
36 MRSA 4 652 that limit property tax exemptions for.
non-profit organizations that primarily serve non-
residents of the State of Maine; and
WHEREAS, the Supreme Court's May 19th decision creates the
potential for a major new expansion in the number and
value of tax-exempt properties in the State of Maine;
and
WHEREAS, Maine's residents and taxpayers can no longer afford to
bear the burden of providing free municipal
cipal services to
an ever-expanding number and value of tax-exempt
properties;
NOW, THEREFORE, by the City Council of the City of Bangor, be it
RESOLVED,
THAT the City Council of the City of Bangor hereby urges the Maine
Legislature and Governor, as emergency legislation during the
current session, to adopt workable legislation enabling Maine
municipalities to charge service fees to tax-exempt properties
located within their boundaries, so as to recover the local cost of
municipal services provided to such properties.
9I-240
corporations may now qualify for a 100& tax exemption for their
real and personal property located in Maine, even if Maine
residents are expressly excluded from participating in the
nonprofit's charitable programa. This decision has the potential
to remove large areas of northern and coastal Maine from the
property tax rolls, and will also increase the number and value of
improved properties that are eligible for tax exempt status.
The U.S. Supreme Court's decision follows recent action by the
Maine Legislature's Taxation Committee to kill two bills, In 202
and Up 1742, intended to address inequities in Maine's present tax
structure, including the burdens on local communities created by
tax-exempt property.
In light of the U.S. Supreme Court's owatanna V. Town of Harrison
decision, the attached Resolve would urge the Legislature, as
emergency legislation in the current session, to revisit previous
proposals to authorize municipal service fees for tax-exempt
properties.