All Maine nonprofits are currently exempt from paying local property taxes, but if Governor Paul LePage’s new budget proposal passes, then the exemption will come to an end.
Groups ranging from summer camps to nature preserves to charity hospitals and private colleges would be affected by the proposed plan.
LePage has called nonprofits takers and not givers. He argued that nonprofits should contribute for services such as snow removal, police and firefighters. If passed, nonprofits would have to pay taxes to municipalities if their properties are worth more than $500 million.
The vice president of public policy for the National Council of Nonprofits, David L. Thompson, said that nonprofits are exempted from property taxes in every single state, either through laws or states’ constitutions.
Some nonprofit groups have said that their long-standing relationship with communities would change because of the proposal. The relationship is based on the understanding that they deserve to not be taxed because the quality of life is improved in the communities, and the government would have to provide the services they provide, if they weren’t providing them.
A few groups in Maine have lobbied heavily against the proposal, and they have warned that if the proposal passes, then they would have to raise their costs or slash jobs.
One group, the Good Shepherd Food Bank, said they would owe roughly $24,500 annually to Auburn under the proposal. Clara Whitney, a spokeswoman for the Good Shepherd Food Bank, said that they would have to provide around 100,000 fewer meals per year.
Whitney said that Mainers would be faced with hunger if the group has to redirect resources in order to pay their property taxes.
Daphne Kenyon, of the Lincoln Institute of Land Policy, and who has studied the nonprofit property tax, said that if the proposal passes, then the law could lead to lawsuits and nonprofits leaving Maine.
