The Coastal Packet: How LePage's tax plan will hurrt non-profits

Friday, February 20

How LePage's tax plan will hurrt non-profits

Press Herald - More than 40 organizations urged state lawmakers to reject Gov. Paul LePage’s plan to require municipalities to tax nonprofits, including land trusts, museums, summer camps, hospitals, private schools and food pantries.

Representatives from those organizations told lawmakers on the Legislature’s budget and taxation committees that the governor’s proposal could devastate some nonprofits, some of which are already working on thin financial margins. Others argued that their organizations provide services so that government agencies don’t have to...

Administration officials have said that the proposal is designed to compensate localities for providing infrastructure and services that nonprofits use but don’t pay for because they are not subject to property taxes. The proposal has also been presented as a way for cities and towns to offset another provision in the LePage budget that would eliminate municipal revenue sharing.

The property tax proposal would eliminate exemptions for nonprofit organizations that own property with an assessed value of $500,000 or more. The proposal would not apply to churches or nonprofits with less valuable properties....

South Portland Finance Director Greg L’Heureux told lawmakers that at least 12 property owners in the city would be taxed under the governor’s plan, including the American Legion Post, the local Girl Scouts chapter and The Spring Point Ledge Light Trust, a nonprofit that oversees and maintains the lighthouse in South Portland.

Clare Whitney, with the Good Shepherd Food Bank in Auburn, said that paying property taxes wouldn’t sink the organization, but would likely mean that 100,000 free meals wouldn’t be distributed to hungry clients.

Harris, of Maine Health, along with Jeff Austin, the lobbyist for the Maine Hospital Association, argued that hospitals provide millions of dollars in free care to patients who can’t afford it while subsidizing Maine Care, the state’s Medicaid program.

Austin estimated that the governor’s plan would cost hospitals $10 million to $20 million.

Other nonprofits also forecast dire consequences. Officials for Shalom House, a nonprofit that provides mental health services, estimated that the organization would face a property tax bill of $90,000 and be forced to cut services.

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