AUBURN – A cap on property taxes won’t fix Maine’s tax system, according to Auburn officials.

The state is too reliant on property taxes, according to City Manager Pat Finnigan. But a property tax cap of $10 per $1,000 of value goes too far the other way, she said.

“It’s a sad commentary that the state system relies too heavily on municipalities to supply the services people need,” she said. That municipalities can only levy property taxes makes the problem worse.

“It’s no surprise that property taxes are one of the most reviled forms of taxation,” Finnigan said.

The tax cap question, “Do you want to limit property tax to 1 percent of the assessed value of the property?” will be on the November ballot, unless state lawmakers vote to place it on the ballot in June.

The cap would allow cities to levy $10 in property taxes per $1,000 of value, based on 1997 assessments. Values could be adjusted for properties that have been sold or renovated since 1997.

Property taxes make up almost half of all tax revenues for the entire state and about $36 million of the city’s $59 million budget. The tax cap would reduce the city’s tax revenues by $25 million.

“That would leave $11 million to pay county taxes and pay debt service,” she said.

Those both add up to more than $11 million, she said. Even discounting both of those, $11 million would provide enough revenue to run a police, fire and public works department but no other services and no health insurance, pensions or workers compensation benefits. It also wouldn’t include any money to pay staff to handle payroll for police, firefighters and public works employees.

“So, it would mean immediate tax relief if, by tax relief, you mean no services,'” Finnigan said.
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