Greenville officials skeptical about proposed state budget

By Mike Lange
Staff Writer

    GREENVILLE — Three top administrators in Greenville have predicted that if Gov. Paul LePage’s budget passes intact, the result will be “higher property taxes for younger homeowners, greater sales tax exposure as a percentage of personal income by lower-income households, and significant risk to certain non-profit organizations in our community that they may have to curtail some services.”

    An analysis of the budget was prepared by Town Manager John Simko, Greenville Schools Superintendent David Morrill and Eugene “Geno” Murray, president and CEO of C.A. Dean Hospital. Murray is also a Greenville selectman.
    The eight-page summary scrutinizes LePage’s proposed changes in the estate, corporate and sales taxes; Homestead Exemption, revenue sharing and giving municipalities the authority to tax nonprofit organizations.
    “This is of particular concern for Greenville’s largest employer and only health care provider within the Moosehead Lake Region: Charles A. Dean Memorial Hospital,” the administrators summarized. “These changes will discourage in-migration of young professionals and their families, the very demographic sector identified in the current Moosehead Lake Region Brand Development Effort as desirable to grow.”
    The realignment of the state sales tax could also have an effect on family finances, the officials noted. “Cumulatively, if a Greenville household of four spent $8,000 during the year on taxable items in a grocery store, hardware store, auto parts store and clothing store; and then traded cars at the end of the year and paid (through financing) another $18,000, this would amount to an increase of $260 in the tax rate,” they said. “But if that same family spent another $5,000 on day care, snowplowing and personal care attendants for an elderly relative, they would now pay another $300 in sales tax.  The total increase in this scenario would be $560 for the year.”
    Simko said he was concerned about the potential loss of all revenue sharing in the future as Gov. Paul LePage has proposed gradually phasing out the program starting this year.
    Greenville is slated to receive about $75,000 this year, Simko wrote, so if the entire amount is cut “at our current assessed value, this loss of revenue represents about .27 mils.”
    One positive aspects of the budget noted in the report was increasing taxable income for non-military pensions from $10,000 to $35,000 over a five-year period and completely exempting military pensions from state income tax starting in 2016.
    “A recent study by a firm commissioned by the Moosehead Lake Region Economic Development Corporation (MLREDC) noted that 39 percent of the households in the Moosehead Lake region receive some form of transfer payment: Social Security, disability compensation or pension,” according to the report. “These individuals with a private pension will benefit from this change, as will those with military pensions.”
    However, the report also highlights a proposal where some residents will come out winners while others will wind up with a higher property tax bill.
    The governor is backing a plan that eliminates the Homestead Exemption for all homeowners under the age of 65 while it doubles the exemption from $10,000 to $20,000 for all homeowners aged 65 or older.
    As of last year, Greenville had 315 homeowners under the age of 65 and 215 homeowners 65 or older.
    If this measure is enacted, and if Greenville maintains the same mil rate in 2015 as it did in 2014, 315 homeowners would see a $147 increase in their annual property taxes as they would become ineligible for the Homestead Exemption, according to the study.
    “But 215 Greenville homeowners would see that exemption double, and therefore see their property tax decrease by an additional $147 annually.  The total cost to all property taxpayers would decrease by $7,350,” they wrote. “But the very demographic sector we are trying to encourage to move to this region — ages 18-45 — would automatically pay more for property taxes on their primary residence than would homeowners of retirement age.”