Property Tax Talk – Part III

Nick Cloutier, current assessor for the Town of Scarborough, and soon-to-be Waterville city manager, joins Rebecca Lambert and Amanda Campbell to provide an update on the Legislature’s Real Estate Property Tax Relief Tax Force.  Appointed by the Speaker of the House, Nick represents the interests of Maine’s tax assessors on the task force. In this episode, he outlines a range of solutions, from amending current programs such as the Property Tax Fairness Credit, to deliver immediate relief to homeowners, to long-term reforms requiring constitutional amendments.  Among these proposals is the introduction of a tiered mil rate system.  Nick also urges listeners to share their perspectives with the task force before it begins to draft its official recommendations.  

Transcript

Welcome everyone to Potholes and Politics, Local Maine Issues from A to Z. I'm your co-host Rebecca Lambert, and with me as always is my amazing colleague, Amanda Campbell. 

Good morning, Rebecca. Thanks everybody for listening. 

Yes, thank you for listening. In case you missed our last episode, Amanda and I had a conversation about the Right to Know Advisory Committee, who they are and why they're important to the people of Maine. If you haven't listened to that episode, consider going back to check it out and while you're there, if you could please consider liking and subscribing to our podcast. 

This week we're gonna go back to the topic of property tax relief and provide an update on the meetings of the Property Tax Relief Task Force, say that 10 times fast. They've been meeting since September, and in addition we're gonna welcome Nick Cloutier, who is the assessor for the Town of Scarborough and a member of the task force. 

Great. So, before we get to Nick, as a quick reminder, the task force has had four meetings so far and has heard from a wide range of stakeholders. Those who have presented information to the task force have included the Department of Financial and Administrative Services, the Maine Revenue Services Office of Tax Policy, MMA,  a person representing assessors, a person representing county officials, the National Conference of State Legislators, the Lincoln Institute, the Agriculture and Forestry Bureaus of the Department of Agriculture, Conservation and Forestry, and the Maine Association of Nonprofits. They also have awarded the research and data analysis contract to a New Jersey foundation called the Progress in Poverty Institute. 

Clearly it has been a lot of information for the task force to digest in a short amount of time. So, the task force does have two more meetings, which will be held on December 4th and 16th, which you can live stream from the legislature's website. The goals from the remaining meetings in 2025 are to compile information for the required interim report, which is due to the taxation committee on January 15th, 2026. And so, as we mentioned, we are welcoming Nick Cloutier to the podcast today. He was appointed to the task force by the Speaker of the House as a member with expertise in property tax assessment.

So, Nick, thanks for joining us and tell our listeners a little bit about yourself and your first impressions of the task force's work thus far. 

Thanks for having me. It's my pleasure to be here on your podcast. A little bit about myself, as was stated, I'm Nick Cloutier. I'm currently the assessor for the Town of Scarborough, I’ve been so for about six years. Before that I served in the communities of Brunswick and Wells in the assessing offices there, and a little sneak preview… I will be joining the City of Waterville as their city manager next year. But I will still be an expert in property taxes, so I can remain on this task force and I'm excited to do so. And, uh, you know, just, my initial impressions of this task force are, I'm very grateful that it exists and I'm pleased with how it's going so far. The reason I'm grateful it exists is the, there's many reasons, but one is, you know, people are really feeling the hurt with property taxes. It impacts many people that are on a fixed income or otherwise. And it, you know, people are getting to the point where it's outpacing their ability to pay in many instances. And so, they're telling their local and state officials, we need some help and relief. So, in the past, there's been very well-meaning efforts on all people's parts to try to give short-term relief.

But I think we're at the point now where we're seeing that just kind of kicks the issue down the road sometimes. So, uh, this task force was created to try to figure out not only immediate relief, but longer-term solutions, if any, can exist to property taxes and their people's difficulty to keep up with 'em.

And, one gist about that I'll get to perhaps in a different question is, the property tax, you know, it's one of the major taxes. A sales tax, income tax, but property tax is generally what is used at the local level for municipalities’ essential services, and so much more in schools, county. And the gist is perhaps it's being over relied upon. You know, too much is being asked of that form of taxation or the municipalities. And then thus passed on to taxpayers. And just to close on this initial impression of the task force, I think all the parties involved, both the voting members and others alike are coming in a good faith effort to talk together and, and meet and not make it about politics or partisanship, but rather realize we're all working on the same premise to help Mainers be able to stay in their homes, be able to afford, their ways of life to, whether it be property taxes or otherwise. And I think that's making it very civil and very productive. As you heard in the intro, we've heard from so, so many groups and we've been educating ourselves 'cause we don't wanna take this lightly and just kind of go with our gut reaction. So, we're trying to get real data to inform our decisions for this task force. 

Thank you. It sounds like task force members are really invested and that's, that's a good thing to have some good outcomes come out of this.

One of the duties outlined in the Resolve that's directing the task force's work is to assess changes to the valuation process. Has the task force talked about this yet? And what are your thoughts on the current valuation process? 

Thanks for asking. Uh, we have talked about this on the task force, but I would not say it's been the primary topic of interest because we've heard so much from other parties, different stakeholders, different special interests, you name it, that, we are more trying to educate ourselves on the different niches of who would be affected or, or who is impacted- what industries or what types of government would be impacted in what ways and how they relate to property taxes. So, in terms of the valuation process, it hasn't been the primary focus, let's say, but we've certainly brought it up. We've been very fortunate to have assessors be asked to step up and chime in as well as MMA, and I think that's been very valuable 'cause although all the members of the task force are very intelligent and thoughtful, some have more or less experience with property taxes 'cause it may not be their day to day. So, I've been very pleased that they've been so kind to incorporate assessors beyond myself to educate on certain aspects of property valuation process.

So, in terms of assessing changes to this valuation process, I'm perhaps I'm biased 'cause I'm an assessor and I think very highly of all my peers and my profession, but I, I honestly think that the valuation process is in decent shape. You know, I'm not saying perfect shape, but I say decent because it, it's good.

We as a group of Maine assessors value following the industry standards. So, although there may be some differences town to town because there's larger communities, smaller ones, coastal, inland, commercial, residential, I think on the whole the valuation process is working as it's supposed to.

You know, the only things that come to mind, for that we should look at on those instances are there are some programs that are maybe, been around for a long time, whether it be the current use programs, so those are like tree growth, farmland, open space or exemption programs, whether it be homestead exemption or business equipment exemptions.

Some of these programs haven't been looked at in a long time, or if they have, they've just been kind of quick, small changes, changing a dollar amount here or there. But I think, those are, although they're not the overall valuation process, they do deserve to be looked at and perhaps tweaked if they're not working as intended or their intended use, 40 years ago, is no longer the case and the program's no longer meeting that aim. So, it's, it's not to say we're not looking at the valuation process. We certainly are, but I, I think, I'm pretty proud that the valuation process is working well.  

Another thing in addition to those specific programs is revaluations have been talked a lot about, and as a lot of your listeners may know, anyone who owns the home or pays property taxes, revaluations have happened more in the public eye in recent years than prior. And the short answer for why that is, is our assessing standards say we must have assessments be reflective of market value. Well, the housing market particularly has boomed so much in recent years that our assessments were way behind and way lower than market value.

And the state has standards for how low below, market value municipalities should be with their assessment. So that's the reason for revaluations happening more frequently or being more in the public eye. So, we are looking at is there a way to perhaps have those occur more frequently or, in a more streamlined way, statewide versus, municipalities all doing them at different times in different manners.

And I think that's certainly worth looking at. It's, it's not a short term thing. I think that would take a lot of time and effort, but we're willing to put that time and effort in. So maybe a few years from now there are some top down recommendations or guidelines from the state,  to perhaps make such revaluation efforts more frequent or more standardized.

But that would take, like I said, considerable time and effort to ensure we weren't missing anything or mandating things that would have a heavy cost or burden or administrative burden to municipalities before we initiate anything like that. 

And, I anecdotally heard that there's trouble finding people to do reevaluations, for municipalities. Do you see that as being a problem if they were to increase how often they, a community would have to reevaluate? 

Certainly. So that's one of the many issues that would need to be looked at hard. You can't have the state mandate that municipalities do it so often if they cannot even hire contractors to do the work, or they cannot afford to pay the contractors to do the work.

So that's where creative solutions or future alternatives may need to be looked at if that's of the will of this group. Fortunately, as we'll get to, in some of the other questions you may have, we're not just looking about, at things that can happen years from now. 'cause that's not an, a quick fix and nor should it be 'cause if we tried to change top down, you must revalue every year, I feel like that'd be a terrible, shortsighted kind of approach. That kind of solution would need a longer-term view for those very reasons. You know, how do you find the people to do it? How do you pay for it? There may be other creative answers, like maybe there's a future state agency that helps on such things or maybe, there's ways to teach assessors to be able to do them themselves. 'cause some municipalities can do that, but it's not a short-term reality. 

At their most recent meeting, the task force members were asked to provide staff with their preliminary recommendations that they might want to be included in the January report. And I was lucky enough to get a sneak peek of your thoughts, Nick, which were really well thought out and very thorough.

You provided the task force with a lot of information for consideration, but from your perspective, which points of yours are ones that you think that make the most sense that the task force should consider going forward? 

Yeah. Thanks for bringing that up and thank you for saying you were lucky to get to see my thoughts. Some others might think it otherwise. 'cause as I mentioned, off the record at the meeting and uh, I was joking around that, whether or not I had anything good to say, I want to say a lot. You know, that kind of balances it out and it was quite long, my comment, but I figured everything is fair game at this point.

We're not making any decisions yet. So rather than miss any opportunities, just get it all out there. But you're very right to then ask what do you think makes the most sense? 'cause I do not think all of my 50 to a hundred ideas are all actionable in the short term, nor should they be. We gotta pick and choose, prioritize. . So I think there's two ways of looking at it. There's short term and then there's midterm longer term. So, the short term. There's ways to potentially provide immediate relief to taxpayers. Mostly we're thinking Maine resident homeowners with their primary residence.

We're not saying we're not looking up for other people, but that's one of the primary concerns, particularly lower income or senior. People that maybe are hurt the most. And one example of the way that can be addressed is looking at existing programs so you don't have to rewrite new law to provide some short-term, helpful relief.

For example, the property tax fairness credit has been touted as one of the options for more short-term relief. For those not familiar, it's usually through the income tax, process, but there's ways, even if you don't file income taxes to get that credit back based on either a portion of your property taxes paid based on your income, if you're a lower income person particularly, but also if you're a renter.

And it's formerly circuit breaker programs is the kind of generalized statement, so. That's just an example of potential for short term relief to targeted individuals that are really feeling the crunch. But, we're all of the mindset that we can't just stop there. And short term kind of band aid fixes, if you will, however well-meaning are not really why we were assembled as a task force.

That's just a small part of our duties. It's more. How do we do something longer term or fix some of the roots of the issue? So it's not a continuous little bit of bandaids or short-term reliefs, like has been done in the past. 'cause it seems to be something that's been revisited. You can only increase exemption program, a thousand or $5,000 so many times without the same problem occurring shortly thereafter. Or ripple effects of winners and losers, if you will, if you take money from someplace. Are others paying more or benefiting less? So, we're also primarily looking at longer term issues as well.

So perhaps the short-term things can be addressed in the next session because, the mandate of this task force says it, it can, have a new bill, that quickly if, if the task force, suggested. But, waiting a year or so for our final report, that I think will be the real opportunity for potential for longer-term actual changes at the root of the issues with property taxes.

I'm not gonna suggest I have the answers, but I'm one of the people that get to weigh the pros and cons of each possibility. And some of my favorites at this point would be, some of the options that really help Maine residents for their primary residence. Some of those are, we already have a homestead exemption - are there ways to look at, increasing that or having it be a, a tiered increase for certain aged people or certain income people perhaps? And then there's bigger changes that might take constitutional amendments, like tiered mill rates. So, assessing the same way we do now, but having a different tax rate for your, the homesteads, the primary residence versus other properties. The second homes, the commercial properties. And that's on the table too. It's a longer-term solution, but one we're certainly looking at. And then, I think if you were to ask some of my peers and they've, tried to have me, have this soak in for me too, to bring forward.. they think, rightfully so that, there's an over-reliance on the property tax. So, if you think there's only three main taxes, not counting the smaller things and fees, out there, then income tax or sales tax can be looked at. And I think the, the going, sentiment is that sales tax could be expanded. Either on things that currently don't have sales tax or expanding certain elements of sales tax so that municipalities could get a share of that because municipalities are currently only reliant on property taxes. And then to a lesser extent, excise taxes or revenue sharing from the state. But in the grand scheme of things, that revenue sharing from the state is a small portion of most municipalities’ budget. It's not like they're paying the majority of the, the needs of the local citizens, and that's okay. But one thing that's a potential for consideration is if you expanded sales tax, some call local option. There, there's other ways to talk about it though. If you give municipalities more opportunity to those funds, you wouldn't necessarily have to overhaul property taxes 'cause the reliance on property taxes would be offset by some of those new revenues. And another thing I like about that, kind of idea, including the other ones I mentioned are, I'm really afraid of, the possibility of taking money from one place and cutting something else. And I really don't wanna see that happen.

Like if we increase the homestead exemption, but everyone else has to pay for it or, we increase the property tax fairness credit, but municipalities get less money from the state 'cause they pulled out of that funds. That'd be a fear of mine. And, so I, I think finding, new or creative changes to sources of revenue so that the municipalities aren't just passing the bill on to residents for the increased cost and services, but rather the state is partnering with municipalities to find new sources of revenue or to share more sources of revenue with municipalities and counties, and schools, which would reduce how much property tax burden there is on people.

In addition to the long list of ideas and comments that you generated, there were 10 pages of comments from other task force members. So, from those 10 pages of initial recommendations, are there any ideas on that list that are innovative ideas for long- or short-term solutions that maybe you haven't mentioned?

I think I mentioned the ones that I was most interested in. And, but there I would encourage people not just to listen to this podcast, but rather to go to the dedicated site with all the materials and there's, let's say a thousand pages of materials. I'm not suggesting you need to read all those or watch all the hours of meeting minutes, but rather check out those 10 pages from the end of our last meeting that were discussed and we'll continue to discuss because I feel like, it's not just up to the, task force members,  that we want other people's solutions as well. And, people can submit written commentary. And. It's gone a long way. I feel like each time people submit written commentary, it's taken under advisement and consideration. Seriously, it's passed along to all the members and, I feel like everything's still on the table, but in the coming meeting or two, we're gonna have to start narrowing down. So, I think if people are interested, they should go on the dedicated website, the link to this task force and their documents. Read those 10 pages and weigh in, email in your comments to the, the staff for this task force. 

And we will link to that page in our transcript as well. 

I can also provide the email address in the transcript for our listeners, to provide their own public comments to the task force. Every meeting packet has included public comments that have been sent directly to the task force as part of their meeting packets. So you can also see what other folks are sending in for suggestions and ideas. It's very interesting to see. It's a wide range of suggestions and ideas, which I think is exactly what the task force is looking at.

So, looking ahead to the meeting on the fourth, your meeting is gonna begin with a, a presentation from the research results from Progress and Poverty Institute. Do you know anything about this organization, or do you have a sneak peek at all of what they're gonna be bringing to that meeting? 

I do not personally know tons about this organization, but I don't come empty handed in my response to this comment because fortunately we have peers on the task force that really vetted the possible organizations we were going with, and they spoke very highly of the Progress and Poverty Institute. They said that not only was their presentation materials and their submission packet for the proposal impressive. But it wasn't just like a boasting about their accomplishments, it was showing their ability to understand the charge we're asking of them and their ability to mine the data that's not just regurgitating what's already publicly available.

They seem to have access to different databases and creative ways to get the amount and types of data that will allow us to make an informed decision and I’m very excited about that and it's, it's not just something that seems like a pipe dream, like too good to be true because they've actually, this organization has done this for other states, so I feel like they have got a leg up that they kind of know what they're being asked to do and have done it before.

They just haven't done it for Maine yet. So, I'm pretty heartened that they will be able to provide us insights and synthesized information. So it's not just opinion based, but rather we're basing our decisions on data that have been compiled and also comparisons to what has worked or not worked in other states.

So we're not recreating the wheel, we're seeing options that have been thought of before and I'm guessing very strongly that we're not the first to think of any of these options 'cause there's 50 states and heck there's even other countries. And somebody's thought of these things before; someone's tried them.

So this, this group will be able to tell us if they've worked out or not. Also, where the real issues and problems are in Maine, who's being affected the most, to what extent with property taxes. And, that will, like I said, allow us to make informed decisions. So that'll be great. 

Yeah, it sounds it. 

Well, this wraps up our property tax episode. I'm sure it won't be our last one on property taxes. Thank you so much, Nick, for being our guest and sharing your thoughts with us and with our listeners. 

Yes, Nick, thank you so much. And congratulations on your new career going forward as a town manager. So much fun. I enjoyed being a town administrator and I'm sure you will too.

Mm-hmm. 

Um, we're hoping, fingers crossed that you'll still be able to serve on the LPC, so if we need to put in a good word for you, let us know. 

Will do.

As a reminder to our listeners, we will link the Property Tax Relief Task Force website in the transcript, and you can have access to all of the meeting materials there. And so, until next time, folks, we hope you all have a very Happy Thanksgiving and we look forward to seeing or hearing you at our next episode.

Happy Thanksgiving. Thanks for listening. 

Thanks for having me. Happy Thanksgiving. 

Thank you.

Real Estate Property Tax Relief Task Force

Find the 10-page document with recommendations on pages 112-121 of this meeting packet. 

Learn about the Progress & Poverty Institute. 

Submit your own public comments to the task force staff via this email: re.ptax.relief@legislature.maine.gov Any submissions become a public document and will be published on the task force website.