We Must Lower Property Taxes-
The Answer is L.O.S.T.
by Michael R. Lachance
October 10, 2013
(NOTE: While I do not pretend to be an expert on the subject, I do present to you an option that has been contemplated for decades by our leaders. "LOST" works. It has a proven track record across the nation. I will be revising this page as I work numbers, collect data, discuss financials with those more experienced than I, and listen to others who have met this challenge and made LOST happen in their own municipalities)
Everyone seems to agree on one thing in Lewiston; our property taxes are too high. Under the weight of ever increasing welfare and social service costs, both Lewiston and Auburn have been struggling to meet budget requirements for decades. The easiest path our municpalities have taken has always been property tax. In the past 20 years we've watched as our property taxes have gone up even as income levels have been stagnant. While home values have also flatlined we've continued to see our property taxes rise. Why? At every turn, when our twin-cities have encountered economic challenges, the answer has been consistent: "Property taxes must go up." Using this tax almost exclusively year after year as a leveraging tool to pay for our expanding budget is unsound, unwise and unsustainable. The only viable answer can be found in what our leaders have deemed "too difficult" to champion.
Property Taxes in Lewiston & Auburn MUST BE CUT.
Not simply "reduced slightly", but slashed. A 20-30% reduction in our net property tax would go a long way toward bringing our property taxes in line with most of the nation (coastal metropolitan hubs notwithstanding). Lewiston is no Boston, nor are we New York City or Los Angeles.
The Answer is LOST.
Local Option Sales Tax. Now, before you haul out the well-worn defense of "its been tried before and failed" (false), "the State wont allow it" (defeatist pessimism), or "the people will spend their money somewhere else" (unrealistic and proven false across the US), think about this: our local leaders have privately discussed the idea for years, but never dared bring the subject to light. Why? Risk. Regardless of political or a percieved economic risk, the time is at hand to make this happen. Our city can no longer turn to higher property taxes when our economic backs are to the wall. The money is not there, and what is there is becoming more and more financially anemic with every passing year.
So how can this be done?
Implementing LOST of 1 to 1.5% in Androscoggin County would allow a 20-30% property tax reduction. This combination would relieve the tax burden on home owners, business owners, property managers and investors while expanding the tax base immensely.
Investors, developers, home buyers and retailers would see new incentive to locate or relocate to Androscoggin County, even more so to Lewiston and Auburn. The reality of LOST, is that when implemented wisely, consumers will generally choose to save time, fuel and effort by not travelling to other areas where LOST may not be in place. If we need something we generally buy it locally. Big ticket items are another area, but even with New Hampshire's tax-free status, only limited numbers of consumers choose to make the trip when compared to those who buy locally.
Will LOST work without a reduction in Property Tax? NO!
While it certainly would force everyone to pay more in sales tax than they pay today, this would quickly prove to be a self-defeating situation. We must reduce property taxes. We cannot do it without a Local Option Sales Tax. To implement LOST without drastic property tax cuts would be economic suicide.
How do we do it?
We start by putting the idea on the table. We elect leaders in City Hall who have vision and courage. We explain the proposal to the citizens until it is clearly understood and supported. We require that LOST revenues be applied ONLY to local property taxes. We work with Androscoggin County, with the approval of the general population therein. The county then petitions the State. Finally, the LOST proposal is put to the voters for approval. A simple process? No. Impossible? No.
What about the State of Maine and the recent increase in Sales Tax?
This was a development that I feel was inappropriate. While Maine is making huge strides in bringing the state budget back in order, increasing the sales tax rate statewide is robbing a revenue stream that, at this point, is needed critically at the municipal level. The State of Maine not only reduced its revenue sharing with municipalities, it then increased the statewide sales tax rate. This hurts our city and our citizens. Allowing that sales tax to be collected by Local Option with a proportionate reduction in property tax would have gone a long way toward helping our cities and citizens along with improving our general economic climate.
Regardless of the challenges, the Local Option Sales Tax is something I firmly believe can turn our economic situation around. It will take time, dedication, perseverance and vision. Let's put this on the table.
rev. v.1.0.2013.10.10 ML
RESOURCES & REFERENCES:
The links below will bring you to various documents or materials that explain many current implementations of LOST across the United States. I will be expanding this library as the weeks go on.
Escambia, Florida - Local Option Sales Tax Report - 2011
Iowa Local Option Sales Tax (LOST) Questions & Answers (Ballot Initiatives, Referendums, General Laws)