Attendees:Roger Berle, Chair, MIC, Cliff IslandChris Wolff, Island Institute, Community Development DirectorLiza Fleming-Ives, Genesis Community Loan FundMalcolm Donald, Town of Cranberry Isles, MIC representativeMarjorie Phyfe, Peaks Island, MIC representativeAlden Finney, Great Diamond, MIC alternate representativeBetsy Weber, Great Diamond Island, MIC representativePeter Sly, with Brooklin Friends and NeighborsCyrus Moulton, Island Institute, Fellows Program CoordinatorCyndy Carney, Coastal Enterprises, Inc, Coalition for Coastal Workforce Housingsteering committee memberWes, Portland Oregon (I'm sorry, but we did not catch his name- would someone let meknow who this is)Jane LaFleur, Friends of Midcoast MaineKathy Westra, Island Institute, Director of CommunicationsAlden Robinson, Long Island FellowCherie Ellison, Swan's Island, member of Swan's Island Affordable Housing groupJoanne Whitehead, Islesboro Affordable Property, and member of the MIC AffordableHousing SubcommitteeJonathan McKane, Legislator, District 51 (Bristol, Damariscotta, Edgecomb, Bristol,Newcastle, and Monhegan PlantationMark Tierney, Little Diamond, MIC representativeMark Greene, Long Island, MIC representativeRudy Graf, Isle au HautKathy Fiveash, Isle au Haut, MIC representativePete Anderson, Islesboro, MIC representativeHannah Pingree, Legislator, District 36 (Brooklin, Deer Isle, Frenchboro, Isle au Haut,part of Mount Desert, North Haven, Stonington, Swan's Island, Tremont and VinalhavenRob Snyder, Island Institute, Vice President of ProgramsJen Litteral, Island Institute, Marine Programs Officer
Roger Berle called the meeting to order. People introduced themselves. Roger then introduced Chris Wolff.
Chris Wolff introduced the topic of the morning portion of the meeting. The Coalition for Coastal Workforce Housing thought it would be helpful to learn more about taxation programs, how they work, what could be changed to benefit island and coastal communities, and what possible legislative efforts my be possible in the January session. Chris brought together a panel of taxation professionals and a legislator to discuss the transfer tax, the Property Tax and Rent Refund Program (also known as the Circuit Breaker Program), and what topics may be of a priority in the next legislative session.
The panel consisted of the following individuals:Dennis Doiron: Director, Income Tax Division, Maine Revenue ServicesJudy Mathiau: Assessor, Town of Rockport, and formerly employed throughMaine Revenue Services in their transfer tax departmentHannah Pingree: Legislator, District 36
Judy Mathiau: Provided brief introduction. She formerly worked with Maine Revenue Services, and married the Monhegan Boat Captain, and lived in Port Clyde for many years. She is very well-versed in the transfer tax, and is currently working as the Assessor with the Town of Rockport.
Hannah Pingree: Hannah stated that tax reform will be a big issue in the upcoming legislative session. She talked about TABOR and the fact that it lost by a very small margin, which is indicative of a strong desire for change- even those who voted against TABOR stated that there needs to be a change, but maybe not as drastic as TABOR. The Legislature knows that they need to address the fact that Maine has one of the highest taxburdens in the country, and that many Mainers are frustrated and want change. Hannah said that the Property Tax and Rent Refund Program (Circuit Breaker Program) increase was good but issue persists- mostly because there are still many people who don't qualify or who pay quite a bit more than the $2,000 refund margin. She said that LD 2 may be revisited, which may freeze valuations and allow valuations to increase only with the inflation rate, but this may also provide some downsides by making it difficult for young families/individuals or first time home-buyers to penetrate the housing market. Hannah also said that income tax will also be discussed in the next session, as well as the transfer tax. Proposals for Real Estate Transfer Tax have been floated before. There has been strong opposition to the transfer tax from the Maine Realtors Association, and from counties. Hannah strongly encourages the Maine Islands Coalition and the Coalition for Coastal Workforce Housing (CCWH) to think in terms of coming up with a "toolbox" of ideas, similar to the work of the Working Waterfront Coalition- come up with as many different options as possible. She encouraged the MIC and the CCWH to get in touch with the real estate community and try to garner some support from them.
Dennis Doiron: Dennis is the Director of the Income Tax Division with Maine Revenue Services, and manages the Property Tax and Rent Refund Program, PTRRP (also known as the Circuit Breaker Program). Dennis is also responsible for the BETR Program (Business Equipment Tax Reimbursement Program). He said he'd be happy to come back to talk about this program in more depth. Dennis brought several handouts withhim: the Maine Residents Property Tax and Rent Refund Program booklet; the 2006 Maine Residents Property Tax Program- Eligibility/Benefit Summary; a summary of Maine Islands application and refund statistics for 2004 and 2005; and, a copy of Rule No. 901 (18-125 CMR 901)- Maine Residents Property Tax Program. If you would like copies of these forms, please contact Chris Wolff, cwolff@islandinstitute.org, or you can visit the Maine Revenue Services website- www.maine.gov/revenue, and click on "tax relief" on the left margin. Dennis explained that LD 1 expanded the Property Tax and Rent Refund Program. This increased the maximum benefit to $2000, and doubled the income limits. He said that there are an estimated 225,000 households that are eligible in for the Program in Maine. The application period has also been extended. But, there is still a fairly low participation rate in the Program. Only 95,000 refunds were granted last year, with less than half of eligible households submitting applications. There were several theories about the low participation rate: lack of awareness, perception of it being a "charity" program, or the inconvenience of filling out an annual application (compared to the one-time application for the local property tax homestead exemption).
Cyndy Carney asked whether it would be possible to publicize the Program through Earned Income Tax Credit coalitions (she knows of one in the Lewiston/Auburn area).
There were questions about the low participation/refunds for some of the island communities. For instance, Isle au Haut only shows 3 applications, but no refunds. Dennis Doiron noted that data for towns with less than three applicants are withheld due to confidentiality rules. A general discussion followed regarding outreach efforts and educating communities about the Property Tax and Rent Refund Program.
Eligibility for PTRRP: $77,000 household (defined in booklet) income for single person or $102,000 family; must have owned homestead (or rented) at least six months a year; must be a Maine resident; may live less than 6 months elsewhere, but may not rent housewhile away. Subsidized housing doesn't qualify. Household incomes requires adding back in a lot of un-taxed income (stocks, IRAs, etc.).
A general discussion of rental properties followed. Properties rented cannot, by law, be eligible for the Program. This is a problem, because many people own their homes, live in them for most of the year, and may just rent out their homes for a few weeks in the summer to off-set the high tax burden. But, this makes them ineligible for the Program. Hannah said that there was a bill submitted to allow rental for less than 30 days, but this was rejected. We may try to push a similar bill through again.
The point of the Property Tax and Rent Refund Program is that your property taxes must be over a certain percentage of your income, i.e. people who are paying too much. Taxes paid above 4% income are reimbursed 50%; paid above 8% is reimbursed at 100%; above $3100 single/ $4100 couple not refunded. Maximum refund is $2000. This maximum refund could be changed, perhaps, to help people who are paying above $4100in property taxes, but Hannah said that any increase in the refund in major implications in appropriations, and may be tough to push through. This also applies to the 4% threshold. For example, 100% could be reimbursed above 4% instead of 50%. The definition of household income could be changed. Rental prohibitions could be changed. One of the biggest questions is, "why don't more people apply?" Perhaps the large amount ofinformation required and application process is a barrier. Perhaps a lot of people aren't filing income tax. Some people are too proud to apply for what they see as a "program" not a "rebate," and so forth.
Perhaps a good quality of the Program is the fact that eligibility is not based on assets, for better or worse. Value of house/land does not have to be included, nor do liquid assets in the bank.
Homestead exemption: local government exempts permanent residents from taxes on the first $13,000 of home value.
For further information about this Program, please see information posted at www.maine.gov/revenue, or if you have any questions, you can reach Dennis Doiron at dennis.m.doiron@maine.gov, or you can call the general helpline at 626-8475, or call Dennis directly at 626-8483.
Judy Mathiau: Judy is an Assessor with the Town of Rockport. She is well-versed in the transfer tax. Right now, the transfer tax is assessed at the rate of $2.20 for every $500 of market value declared. Half is collected from the buyer and half from the seller. The county collects the transfer tax at the time that the deed is recorded and keeps 10%. The State of Maine receives the remaining 90%. After the first $15 million is collected by Maine Revenue Services within a fiscal year, half is dispersed to the HOME/housing funds, and half is dispersed to the State's general fund. Judy provided a Transfer Tax handout. Chris Wolff can e-mail these documents to you if you are interested- just e-mail her at cwolff@islandinstititute.org
Joanne Whitehead, with Islesboro Affordable Property, researched the amount of real estate transfer tax paid by Islesboro, and said that Islesboro paid over $100,000 in taxes in 2005. Hannah said the biggest problem is that all of this is just going into the general fund. Judy said there is much demand on real estate transfer tax funds. Counties and non-governmental entities want more. MSHA tries yearly to get their allocation increased. Hannah said it is hard to judge whether there is political will to increase the real estate transfer tax. The real estate community is against it. She said that most of the money that goes into the general fund is generated coastally, and rarely goes back to the islands or the coast. There many other drawbacks-perhaps that the money should return directly to the communities for tax-relief or affordable housing. Judy described the situation of her family members, none of whom can afford to buy houses in Mid-Coast Maine.
Cherie Ellison from Swan's Island said she thought that the tax should apply to all real estate transactions, not just those over $500,000. This is a good point, since very few houses sold in Western Maine are valued so high, and a more consistent spread, with some funds available to the local communities would benefit all communities, not just highly valued coastal and island communities.
Hannah said that it is already set up to be paid by everyone, but that the option on the table COULD be a local option real estate transfer tax, which would allow towns to decide whether or not to collect the tax, money from which would stay in the community, and that the local communities could then decide how to spend the money- whether it could be available for affordable housing, etc. There is no proposal on the table at this time, and something could possibly be floated in the next session. Joanne Whitehead asked if a local option transfer tax would require a change in constitution, but Hannah said she didn't think it did- that it would require the approval of the legislature.
For further information about the transfer tax, you can reach Judy Mathiau at assessor@town.rockport.me.us
Coalition for Coastal Workforce Housing Update
Chris Wolff gave an update on the status of the Coalition for Coastal Workforce Housing (CCWH), saying that the Coalition is still new and that they are still trying to get people on board. The CCWH's steering committee consists of the following individuals: Chris Spruce, Island Housing Trust (MDI); Adam Krea, MaineHousing; Liza Fleming-Ives, Genesis Community Loan Fund; Cyndy Carney, Coastal Enterprises, Inc.; DougBoynton, Monhegan Island Sustainable Community Association; Roger Berle, Maine Islands Coalition; and, Chris Wolff, Island Institute. The Coalition is trying to get more businesses and organizations on board. Chris Spruce is working with the College of theAtlantic and Jackson Lab. Roger Berle is working with coastal hospitals and boatbuilders. Joanne Campbell, with Camden National Bank, is interested in gettinginvolved. The Coalition will continue to work with the Maine Islands Coalition Affordable Housing Subcommittee. Liza Fleming-Ives said that the goal at this time is to establish a broad enough support base and issue focus to benefit the coast while still keeping legislative momentum. Hannah reiterated the need to keep an island focus.
Discussion of legislative logistics
Hannah said that any bill titles and general descriptions must be submitted by December 15, but that actual language need not be finalized until mid-January. Any submitted bill will get a public hearing. Hannah stated that high attendance at the hearings will garner respect and consideration for the bills. She encouraged all to attend, and to spread the word.
Chris Wolff said that the CCWH group plans to do a Hall of Flags event in mid-January, with information and food, to spread the word about the group, and to meet as many legislators as possible. It will be important to get good participation at this event.Further information will be shared in December.
Break for lunch 12:00 - 12:45.
Meeting resumed at 12:45. Roger Berle facilitated this portion of the meeting. Roger started by stating that there were enough MIC representatives for form a quorum.
Island TransportationKathy Fiveash and Rudy Graf from Isle au Haut said that Isle au Haut is served by a private boat company and has been for the past 30 years. It is presently losing its funding. The fact that this is no car ferry has preserved the island's unspoiled character. The island now faces the challenge of either funding the ferry or accepting state ferry service. The major drawback of a state ferry service is that it would be a car ferry. Theboat company is looking for state transportation funding. Currently it is a charitable 501(c) 3 organization. The Town of Isle au Haut has pledged $20,000 for the past 2 years in support of the ferry service, and several residents have also pledged yearly subscriptions, but they are still experiencing a $200,000 shortfall.
Mark Greene compared the situation to that of Casco Bay Lines before it became a public transit district. Although Casco Bay Lines' transition from private to public company may not fit Isle au Haut's situation exactly, it is an important precedent to keep in mind.
Jen Litteral said that Sen. Dennis Damon plans to submit a bill that would provide state subsidies for private ferry systems. These islands include Monhegan, Isle au Haut, the Cranberry Isles, Chebeague (in part) and Matinicus (in part).
Rob Snyder said that the Island Institute is investigating an alternative solution that would prevent the state from having to directly fund transportation companies and would instead put funds in the hands of community members. More information will beforthcoming.
Betsy Weber, from Great Diamond Island, said that the state might be required to provide transportation for students to school. Cherie Ellison agreed and said there might be timelimits on the duration of the trip.
Comprehensive Planning
Rudy Graf said Isle au Haut is also wrestling with its comprehensive plan. They plan to send out a survey to islanders and non-residents. They hope to complete the process in the next year. It would be helpful to know what other islands have already completed comprehensive plans and what they used for surveys. Chris Wolff suggested using Island Fellows to gather comprehensive plan information from their communities, and Chris will gather the documents and disperse to communities.
Mark Tierney, from Little Diamond Island, said it was best to establish adequate building codes as soon as possible before the comprehensive planning process runs its course. He said that developers can move very fast. Little Diamond had an experience with rapiddevelopment and knows that building codes should come first.
Chris Wolff said that Isle au Haut's School is interested in requesting a Fellow to help out with technology needs for 2007-08. She said that Fellows placed in small island communities frequently work on many different issues, including comprehensive plans.
Maine Islands Coalition Fellow
Chris Wolff said that Rob Snyder and Roger Berle had discussed the idea of placing an Island Fellow with the MIC to work partly in Augusta as an advocate for MIC issues. Rob said he wasn't sure how feasible it would be for a fellow to function as an advocate, but said that thinking of the MIC as "MMA for the islands" is a powerful concept and that a Fellow working full time on developing the administrative capacity of the MICmight help make MIC a proactive rather than a reactive advocacy body.
Kathy Fiveash said it might also be worthwhile to have a Fellow who spends a part of each year on each island and produces written reports on major issues- perhaps creating a simple newsletter that could then be shared amongst islands to keep everyone abreast ofhappenings in the different communities.
Cherie Ellison asked whether a grant-writing fellow might be available. Rob explained that the Island Institute helps with grant writing (that most Island Fellows focus on grantwriting within their fellowships) and that the Maine islands Coalition is primarily focused on political advocacy and not a grant writing organization and that the Island Institute serves in a supporting role.
Kathy Fiveash said that she felt somewhat isolated from other communities and thinks that it would be good for the MIC to publicize what it does. Roger rebutted that many islands post MIC minutes publicly or publish them in community newsletters or forums. It was reiterated that MIC representatives need to be proactive in spreading the word about MIC meetings, what is being worked on, accomplishments, etc.
A general discussion ensued about the reporting structures for MIC activities. Rob said that Malcolm Donald writes a report about the MIC and accomplishments for each year's Town of Cranberry Isles Annual Report, as do others. It was suggested that all MIC reps write similar articles to get into the annual reports. Some towns have mid-January deadlines for annual report content, since some town meetings take place as early asMarch. Mark Greene said that in the past year many towns had been exchanging town reports, and that this is a fabulous resource. Participants are reminded to print extra copies of their town report and furnish them to MIC for dissemination. Please plan on printing 15 extra reports, and bring these reports to the following MIC meeting for dispersal.
Working Waterfront
Roger Berle stated that the Working Waterfront Bond is a great success, with six applications received, including the Isle au Haut town dock. MIC has been a leader in this effort. This is a pilot program only, but it is hoped that it will be renewed and potentially increased from $2million to $10million in coming years.
Jen Litteral provided a handout with information on the Maine Working Waterfront Current Use Taxation Program and elements of the Program. This document is available via e-mail. If you would like the document, please e-mail Chris Wolff at cwolff@islandinstitute.org. For further information about this program, please contact Jen Litteral at jlitteral@islandinstitute.org, or 664-9694.
Wildland Urban Interface Program
Chris Wolff talked about the Wildland Urban Interface Program, and the fact that the Island Institute is partnering with the Maine Forest Service to implement this Program on the islands. The Fellows will work with local fire departments, volunteer firefighters and towns to conduct vegetative and structural assessments of properties and lands to assess the risks of fires. Many of the islands consist of mature spruce stands that are riddles with slash and underbrush, setting the stage for rampant wildfires, should they occur. The WUI Program looks at the interface between housing structures and the forest, and ways communities can best mitigate the risk of wildfires spreading to homes. Fellows, along with community members, will conduct surveys and write up community reports. The Fellows will work closely with a Maine Forest Ranger, and the Fellow, along with Maine Forest Service representatives, will then conduct community presentations on their findings, and will present possible implementation plans for the communities. The implementation plans will simply be suggestions to be decided upon by the community. Chris also said that Colorado was successful in partnering with insurance companies to reduce home insurance costs when certain prevention strategies were implemented. The Island Institute will be following up with some local insurance providers to see if they will honor the efforts of this program and provide rebates. There may also be some grant funds available through the Federal Emergency Management Agency for costly mitigation projects. Chris encouraged MIC members to spread the word about this program and to provide contact information for local representatives who would be interested in this program, and who could volunteer with the Fellows.
The Group discussed possible meeting topics for the February MIC meeting. Possible topics included law enforcement, solid waste, and creating action steps and assigning MIC members to duties between meetings.
The next Maine Islands Coalition meeting is scheduled for Friday, February 9, from 10-2 at the Island Institute office in Rockland.
Meeting adjourned at 2:00 PM.