New Report: Improve and Increase Property Tax Relief for Low and Middle Income Mainers

By Ramona du Houx - May 7th, 2013 

The Capitol, Augusta, Maine. photo by Ramona du Houx

“The circuit breaker is the best program for reducing property taxes for Maine families who need it most,” said MECEP executive director Garrett Martin. “Most economists and tax policy experts share this view. Unfortunately, in recent years, reduced benefit levels and failure to streamline the application process and adequately publicize the circuit breaker’s benefits have undermined the program.”

The Maine Center for Economic Policy (MECEP) released a new report urging legislators to restore the 20 percent in refunds cut over the past four years to the Maine Residents Property Tax and Rent Refund Program, more commonly known as the circuit breaker program. Give Maine’s Working Families a Break: Fix and Fund the Circuit Breaker by MECEP economist Joel Johnson also calls for reforms to make it easier for eligible taxpayers to apply for refunds and for a public awareness campaign to encourage participation in the program.

During his testimony in Augusta, Martin cited a 2006 MECEP report entitled “Does the Circuit Breaker Relieve the Burden?” co-authored by Michael Allen and Richard Woodbury. Allen is currently Maine Revenue Services Associate Commissioner for Tax Policy and Woodbury is currently a member of the State Senate representing Cumberland County. In their report they conclude that the circuit breaker “does more than any other form of property tax policy to assure that people can afford the out-of-pocket burden of paying their property taxes.”

Martin testified in the Legal Affairs committee in support of LD 816, “An Act to Reduce the Property Tax Burden and Improve the Circuit Breaker Program” sponsored by State Representative Christine Powers and LD 956, “An Act to Improve and Simplify the Application for Benefits under the Circuit Breaker Program” sponsored by State Representative Peter Stuckey.

“Ultimately, delivering property tax relief to those who need it most offers significant benefits for direct beneficiaries and for Maine’s economy more broadly,” Martin added. “At a time when lack of consumer demand continues to be a drag on our economy, putting money – as much as $100 million – in the pockets of Maine families who need it most and are most likely to spend it is a win-win. It can help stabilize household budgets and help stimulate economic activity.”