MECEP to Oppose Bills to Make It More Difficult to Obtain Circuit Breaker Property Tax Relief

“The Legislature should instead be strengthening and simplifying this vitally important program”

Augusta, Maine (Thursday, January 19, 2012) Maine Center for Economic Policy (MECEP) Legislative Director Dan Coyne will testify in opposition to LD 1680 and LD 1693 at a hearing today in the Maine Legislature’s Joint Standing Committee on Taxation.  MECEP contends that the two bills would impose unnecessary additional burdens on applicants for refunds under the Maine Residents Property Tax and Rent Refund (Circuit Breaker) Program.  

“In 2010, the almost $42 million in Circuit Breaker refunds enabled families to make ends meet and seniors on fixed incomes to pay for medicine and other basic necessities,” Coyne said.  “Recent MECEP analysis found that the 2010 Circuit Breaker refunds generated significant economic activity, including $8.4 million in health care spending, $7.3 million toward housing, $3.9 million in retail spending, and $1 million toward education. These two bills will make it more difficult for eligible taxpayers to apply for property tax relief when the Legislature should instead be strengthening and simplifying this vitally important program.”

MECEP noted that Maine Revenue Services records show that more than 75,000 Maine taxpayers received general refunds and another approximately 13,000 received senior refunds under the Circuit Breaker Program last year.  The average general refund was approximately $492 and the average senior refund was about $369.  Despite the Circuit Breaker’s proven value, an estimated half of those eligible do not apply for and receive a refund due to a variety of barriers that discourage participation.  Specifically, the cumbersome application process and failure to synchronize the application process with the income tax may place particular burdens on prospective applicants.  MECEP also urged the Legislature to revisit its decision last year to cut the Circuit Breaker program by 20%.

“At a time when too many are struggling to make ends meet, we should be pursuing tax policies that will put more money into the hands of working Mainers,” Coyne said.  “Failing to restore the 20% cuts to the Circuit Breaker means that many working families will actually see their taxes increase.  This is particularly troubling since 2009 figures indicate that the bottom 20% of Maine taxpayers, on average, paid 8.3% of their income in property taxes while the top 10% paid just 3.1%.  Mainers need our legislators to reject measures that will discourage participation and act to streamline the application process and expand the Circuit Breaker’s fair and economically sound property tax relief.”
State Senator Debra Plowman introduced LD 1680, “An Act to Amend the Circuit Breaker Program to Include Claimants Occupying Property Pursuant to a Trust and to Require Proof of Payment of Rent,” and State Representative Dennis Keschl introduced LD 1693, “An Act to Amend the Law Governing Abatements of Property Taxes for Infirmity or Poverty.”