AUGUSTA — Gov. Paul LePage is once again accusing conservation groups of “ripping off” taxpayers in Maine by not paying local taxes on vast swaths of land across the state.
But conservation advocates and some lawmakers counter that the governor is peddling misleading information that ignores payments made by land trusts as well as the public benefits of preserving land in a state defined by its natural beauty.
“They are paying taxes, they are providing and generating income and, in most cases, they are open to the public for (recreational) use,” said Sen. Tom Saviello, a Wilton Republican.
For three years, LePage has pushed unsuccessfully for policy changes that would allow municipalities to tax land trusts, hospitals, private colleges and other nonprofit organizations currently exempt from local property taxes. Despite this track record, he clearly plans to continue pursuing the issue during his final year in office, with a heavy focus on conservation groups that he views as driving up property taxes for homeowners.
“The desire to preserve land without benefit to the taxpayers, or their input, is out of control,” LePage said last Tuesday during a wide-ranging State of the State address. “We must restore balance. We must ensure that all property owners are required to contribute to the local tax base. Everyone must pay their fair share.”
GOVERNMENT VS. NONPROFIT LAND
A sizable and valuable portion of land in Maine – worth $18.3 billion in 2016 – is tax-exempt. But what LePage failed to make clear in his address is that roughly $11.8 billion worth of that land is owned by the state, the federal government, municipalities or quasi-municipal agencies such as water districts. The remaining $6.4 billion is spread among all nonprofits – a designation that encompasses churches, hospitals, American Legion halls, chambers of commerce, charitable organizations and, of course, land trusts.
Conservation advocates accuse LePage of deliberately – and repeatedly – muddying that distinction, including during his speech last week.
“We established an online registry for all nonprofits to report conservation-land ownership,” LePage said. “The result of all property-tax exemptions reported within municipalities exceeds $18 billion. Think about that – $18 billion.
“The loss of that tax revenue has shifted over $330 million to guess who: hardworking property owners in the state of Maine,” he said.
Jeff Romano of the Maine Coast Heritage Trust – one of the state’s most influential conservation organizations – called that “disingenuous” and part of a pattern from the LePage administration.
“I continue to be frustrated that he attributes all tax-exempt properties in the state of Maine to land trusts when land trusts cover less than 1 percent of it,” said Romano, the trust’s public policy manager. “He essentially blames land trusts for every public school that is off the tax rolls, every government building off the tax rolls, every hospital and every nonprofit organization in the state.”
Maine’s hard-charging Republican governor has often accused hospitals, colleges and other nonprofits of failing to cover their fair share of costs borne by their host municipalities. But his favorite target appears to be conservation organizations and their political allies, although his proposal to tax nonprofits has encountered bipartisan opposition.
“They have taken hundreds of millions of dollars’ worth of conservation land off the tax rolls, which increases local property taxes,” LePage said last June. He added: “Democrats are more interested in kowtowing to wealthy environmental organizations, like Natural Resources Council of Maine and Maine Coast Heritage Trust, than protecting the Maine taxpayer.”
ONE-FIFTH OF MAINE LAND CONSERVED
There is no dispute that Maine has a robust conservation ethos.
Roughly 20 percent of Maine’s land base – or 4 million of the state’s 20 million acres – has been conserved in some fashion, whether as a state park or as working forests protected under a conservation easement. According to a recent report issued by the governor’s office, those 4 million acres include:
• 274,579 acres of federal land such as Acadia National Park, Katahdin Woods and Waters National Monument and the White Mountains National Forest.
• 1,046,400 acres of state-owned parks, public reserved lands or historic sites.
• 476,060 acres of land owned by land trusts.
• 2,301,915 acres of private lands protected through conservation easements, most of which would be subject to taxation.
The governor’s report, which was distributed to members of the Legislature last week, estimates that land trusts account for $390.9 million of the $1.4 billion in estimated value of the tax-exempt conservation lands.
The Maine Land Trust Network puts the total acreage owned by land trusts at closer to 600,000 rather than the 476,060 reported by LePage’s office. In another difference with the LePage administration data, the October 2017 report from the land trust network also includes information on the proportion of conservation lands still “on the tax rolls” or that pay fees to municipal, state or county governments.
NONPROFIT PAYMENTs IN LIEU OF TAXES
The network estimates that 94.5 percent of the roughly 2.5 million acres of conservation lands in private hands remain on the tax rolls. About 1.9 million acres of that total is privately held land in which the owners sold off development rights in the form of conservation easements that keep the land as working forests but also guarantee public access for recreation. The other 460,000 acres are land trust-owned properties still subject to some level of taxation because they are included in Maine’s Tree Growth or Open Space programs, which reduce taxation levels in exchange for the land remaining as working forests.
On another 100,000 acres, conservation groups made “payments in lieu of taxes” to municipalities. Also known as PILOTs, these payments are a way for nonprofits or government agencies to help cover the costs borne by their host municipality. The federal government, for instance, typically makes payments in lieu of taxes, as do some private institutions such as colleges and hospitals.
Maine Coast Heritage Trust, for instance, paid $139,390 in property taxes or payments in lieu of taxes to host municipalities last year, said Romano, the policy manager.
“Most of the land is generating revenue to the communities … to help compensate for any services they receive from the communities,” Romano said of conservation land statewide. Although those payments may be less than the full taxation rate for the assessed value of the land, Romano said the public has access to the land for recreation.
“This land is providing a whole host of benefits to the community,” he said.
Asked for a response to the Maine Land Trust Network data, LePage’s communications office called the report “more of a marketing piece than a true analysis piece.”
IMPACT OF LOST REVENUE DIFFERS
Some communities seem to benefit – or suffer – more than others from the presence of tax-exempt conservation lands within their borders, however.
During a lengthy panel discussion before the Legislature’s Agriculture, Conservation and Forestry Committee in December, municipal representatives relayed starkly different views of the influence of land trusts. While managers from some Cumberland County communities said they had good working relationships with conservation groups, others from such rural towns as Alna in central Maine and Lubec in far Down East Maine raised concerns about the amount of land removed from the tax rolls or protected from development.
In an analysis published last week, the Maine Center for Public Interest Reporting compared the impacts of conservation trends in two towns: Cumberland and Lubec. In Cumberland, tax-exempt lands held by land trusts and by state and local government accounted for $218,065 in lost tax revenue, a manageable loss in a town with an assessed value of $1.3 billion. In Lubec, however, land trusts alone accounted for $175,035 in lost revenue in a town with one-tenth the total assessed value of Cumberland, according to the report posted on the public interest center’s Pine Tree Watch website.
LePage spokeswoman Julie Rabinowitz said the governor believes communities need a stronger say in decisions that conserve land or place it off-limits to development.
“There are over 4 million acres restricted from development or off the tax rolls for conservation,” Rabinowitz said in a prepared statement. “In a state strong on home rule, local governments do not have the final say on whether land is taken off the tax rolls or permanently prohibited from being developed. There is no local oversight for (more) than 100 organizations that are making decisions about where growth can happen and the property tax shift is only one effect of that lack of oversight or formal input.”
DISCOUNTING LEPAGE’S ASSERTIONS
Members of the Legislature’s Agriculture, Conservation and Forestry Committee are currently finalizing a report on tax issues related to conservation lands. The Legislature ordered the report last year as part of a budget deal with LePage that ended a three-day government shutdown.
Last week, committee members appeared to agree that lawmakers should review ways to ensure that municipalities receive more of the tax payments paid to the state via Tree Growth, Open Space or other state programs. But it was clear from members’ comments that they were not swayed by the LePage report on tax-exempt lands.
“Unlike those that want to espouse that land trusts are paying no taxes and not on the tax rolls, I think you have proven that’s not a true statement,” Saviello, a Republican who has frequently clashed with LePage, told fellow committee members and staff. “I’m not saying that it’s enough, but I think you have proven very effectively that it is not a true statement.”
Nor were members impressed with the administration’s rejection of several requests to have a representative answer questions about discrepancies between the report and other data supplied to the committee.
“In the absence of any sort of explanation, I would think that we might just want to set the governor’s data aside and say, ‘That’s an interesting story,’ ” said Rep. Kent Ackley, I-Monmouth. “But without any source data, it’s just that.”
Maine conservation advocates dispute Gov. Paul LePage’s accusation that conservation groups are “ripping off” taxpayers in Maine by not paying local taxes on vast swaths of land across the state.