AUGUSTA (AP) – Wafting through the air like sea spray and the smell of bait fish, Maine’s argument over development versus preservation this fall focuses on the coast.

Carrying a hint of antagonism between the natives and the newcomers, the debate over the taxation of waterfront land is playing out against a backdrop of heated real estate dealings that critics say threaten to drive out fishermen.

“When was the last time you saw a mansion torn down and replaced with a fish wharf?” asks Dennis Damon, who comes from a Down East fishing family and serves as the Senate chairman of the Legislature’s Marine Resources Committee.

Heading into Nov. 8 balloting, advocates for a working waterfront are looking for what they call fairness while relying on broader sentiment about Maine’s sense of itself as they press for approval of a constitutional amendment to authorize more favorable tax treatment for owners of waterfront property used for commercial fishing activities.

At issue is whether to establish a new exception to a standard of fair market value in fixing property taxes. The proposal would apply only to land and not to what is built upon it.

“A wharf really is not land,” says acting Director David Ledew of the property tax division in Maine’s taxation department.

Already, Maine allows current use valuation for three types of property: tree growth land, open space land and agricultural land.

Such breaks are not uncommon. A 2002 study for the National Conference of State Legislatures found that most states, for instance, determine the value of agricultural land by utilizing some kind of current use standard.

Maine’s constitution generally requires that property be assessed and property taxes be apportioned equally, setting market value as the measuring stick. Assessing for current use instead of market value effectively means that land is assessed as though the only market interest is linked to the way the land is currently used, according to Maine Municipal Association lobbyist Geoff Herman.

Opposed when the question was first brought before state voters five years ago, the organization of city and town officials is now supportive, given what Herman calls “the accelerated residential real estate market impacts” of the last few years.

In 2000, when the initiative was not specifically limited to waterfront land, it failed narrowly, 301,931 to 305,554.

This time, there has been little public opposition to the proposal, despite its potential for heightening the local tax burden on some while lowering it for others.

The Maine Center for Economic Policy, a liberal think tank, warns that “the skyrocketing prices of residential coastal property, and the high taxes that accompany them, threaten traditional fishing operations and a piece of Maine’s heritage.”

But inland voters may just yawn, said Sen. Joe Perry, D-Bangor, a co-chairman of the Legislature’s Taxation Committee.

“It’s hard to find the sympathy off the coast for someone who has a high bill because they have $1 million of equity in the property,” Perry said.

Even in the face of tax policy exceptions, Ledew said state tax officials have found that the magic words in real estate are still location, location, location.

Already in the far reaches of eastern Maine, blueberry land may be more valuable when kept for agriculture than if converted to residential use, Ledew said, adding that the same can be true for potato land in northernmost Aroostook County.

Herman, too, said tax breaks alone would not negate market forces, but that municipal officials had come to believe that a new policy related to the commercial fishing industry might be a way of “stemming the tide of the residential market overwhelming the coast.”

The Maine-based Island Institute recently released a study touting the value of Maine’s working waterfronts.

According to an executive summary of “Saving Working Waterfronts: Mapping the Maine Coast’s Economic Future,” just 25 miles of Maine’s 5,300-mile coast would be categorized as working waterfront.

Yet, the analysis contends, “every inch of that tiny percentage is now critical to retaining the fishing jobs that keep a $758 million piece of the coast’s economy afloat.”

AP-ES-10-30-05 1320EST

Copy the Story Link