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Abstract

Property taxation has been viewed for years as the perfect “dragon to be slain” and by most “as both bad and doomed.” In spite of being one of the most commonly questioned and scrutinized issues by voters and politicians, property taxation survives as the primary revenue source for local governments. Maine's experience is an example of this continuing debate. The 2005 reform attempt by the Legislature known as LD 1 is the most recent example. Municipal over-dependence on the property tax, rising property values, unfunded state mandates, loss of federal revenues, and increased spending has significantly increased the percentage of Maine taxpayers' personal income needed to pay the tax, raising Maine's property tax burden to one of the highest in the nation. In spite of a general consensus that Maine must ameliorate its property tax burden and provide significant relief to those for which the tax is most burdensome, the means to that end is not obvious or simple, but still needs to be pursued. This Article provides a context for the discussion that frequently demonstrates a lack of understanding of the tax's historic base, evolution, and its many-faceted aspects. This is an opportunity to step back and view the whole of the tax, which so many believe is in need of reform. There are a variety of legal limitations, reform alternatives, and experiences that need to be understood for reform discussions to be successful. In this Article, and in conjunction with explaining the alternatives for property tax relief, the authors have made some modest proposals for additional property tax reform in Maine to go beyond Governor John Baldacci's and the 122nd Legislature's efforts in the January 2005 enactment of LD 1. Some of these proposals are simple and practical; others are not. These proposals and others need to be considered for the welfare of Maine taxpayers and the state's future. All proposals must be considered in the context of the history of the property tax and its legal limitations.

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