Bill > LD542

This bill establishes a comprehensive framework for municipal property tax levy limits that will take effect for fiscal years beginning on or after July 1, 2026. The bill defines a property tax levy limit for municipalities based on a "growth limitation factor" calculated by combining average personal income growth and a property growth factor, which essentially means municipalities can increase their annual property tax levy based on economic and property value changes. Municipalities must calculate their initial levy limit using the previous year's property tax levy and can only exceed this limit under specific extraordinary circumstances, such as natural disasters, unfunded mandates, court orders, or loss of state/federal funding. The bill outlines a detailed process for exceeding the levy limit, which requires either a town meeting vote by written ballot or a majority vote of the town/city council, with potential for a citizen referendum. If a municipality collects property tax revenues above its levy limit, those excess funds must be transferred to a property tax relief fund to reduce future property tax levies. The State Tax Assessor is empowered to enforce these limits and can require municipalities to adjust their levies downward if they violate the regulations. The legislation also applies these limits to plantations and provides guidelines for calculating municipal cost component assessments in unorganized territories.

Government Affairs

https://legislature.maine.gov/legis/bills/display_ps.asp?LD=542&snum=132