AUGUSTA – One provision of the property tax relief plan expected to be voted on today in the House and Senate could raise taxes on businesses to give more relief to homeowners, architects of the plan explained Tuesday.

Under the plan, the first $13,000 of a home’s value would be exempt from property taxation under the state’s Homestead Exemption program, about double the current exemption.

However, under the plan the state would not increase its reimbursement to towns for the additional lost tax revenue. The result would force communities to either cut budgets or raise the property tax rates to provide the extra property tax relief.

That has Chamber of Commerce President Dana Connors “concerned about a tax shift to businesses,” adding he doesn’t like that part of the plan.

But on Tuesday Connors quickly added, “to be fair” it’s important to point out that the entire package still provides overall tax relief.

The exemption applies only to primary homes, not to second homes, apartment buildings or businesses. Currently, the state reimburses towns for the loss of income from the exemption.

But under the proposed plan, the state would not reimburse for the extra losses caused by doubling the exemption, which was recommended by a special committee studying property tax reform.

This year the state is spending $36 million to reimburse municipalities for the exemption.

Municipalities could either cut services or raise taxes to cover the loss, said Rep. Arthur Lerman, D-Augusta, a member of the property tax committee.

“In this part of the package, the idea is to create a slight shift in who pays property taxes,” Lerman said. “The increase to the $13,000 Homestead Exemption will result in a shift to second homes and the business community.”

He added the exemption is only one piece of several in the tax package.

“Some are targeted relief, some are general and some are oriented toward everybody,” he said.

When looking at the overall plan, which includes the state spending more than $225 million in direct tax relief to all who pay property taxes, “we believe that in nearly all communities in Maine, the net effect will be a decrease in the mill rate.”

Maine Municipal Association spokesman Geoff Herman also expressed concern with the Homestead Exemption plan.

“This element of the bill splits communities into pieces. It increases taxes for some and decreases taxes for others,” Herman said.

Connors pointed out that the shift to businesses could harm some areas of the state.

Communities without businesses, such as bedroom communities, may have a hard time making up the difference since they have no one to turn to, he said.

“So while you’re helping one group (homeowners), you’re hurting another,” Connors said.

But when looking at the complete tax-relief package, Connors said the shift would be more than made up by the millions of new dollars the state is spending for education and tax relief.

“You have to look at this in totality,” Connors said, adding that spending caps for all levels of government also contained in the plan will provide significant relief long term.

Lerman said the cost of the larger exemption “will be spread out over the entire state,” and the impact on businesses “will be slight, and countered with more school funding money.”

Developing tax policy is not about just finding relief, Lerman said. “It’s looking at who pays what. We’ve tried to put together a package that provides property tax relief more to those who need it the most.”