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January 13, 2015

Maine Gov. Proposes Towns Tax Nonprofits to Offset State Cuts

Hospitals and private colleges in Maine are responding with cautious concern to Gov. Paul LePage's proposal that cities and towns be allowed to tax large nonprofit institutions, the Portland Press Herald and the Bangor Daily News report. Mr. LePage unveiled a two-year budget plan Friday that would grant the taxing authority to help municipalities offset planned cuts in state aid.

The Republican governor's proposal would apply to organizations with property worth more than $500,000. Larger jurisdictions—so-called service centers—could collect property taxes amounting to half the normal rate for assessed value above the $500,000 threshold. Mr. LePage, who is starting his second term, wants to reduce state spending by $300-million over four years while cutting income taxes.

The Maine Municipal Association said that for most cities and towns, the new taxes will not make up for the proposed end of state revenue-sharing, which provides some $60-million a year to local governments. Maine Hospital Association lobbyist Jeff Austin said the group's members "are not in a position where they can afford to absorb tens of millions of dollars" in tax payments, and several college leaders said the plan would lead to higher student costs.