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Maine Revenue Services Checks in Regarding
Legality of Michaud Tax Abatement Scheme
By: David Deschesne
April 6, 2011, p. 1
FORT FAIRFIELD—Many people in Fort Fairfield are questioning the recent decision of the Fort Fairfield Town Council to selectively grant a full property tax abatement and release of liens on the Michaud property, on Houlton Road, in exchange for physical cleanup of the land.
The Fort Fairfield Journal recently posed the question, “Does any statutory authority currently exist for a municipality in Maine to charge off, reduce, credit or otherwise eliminate real estate property tax owed on property that is in foreclosure for non-payment of taxes in exchange for the property owner's agreement to improve, clean up or otherwise provide general upgrades to said property?” to the Property Tax division of Maine Revenue Services in Augusta.
“The Property Tax Division is not aware of any specific allowance for such an expenditure of public funds,” said Laurie Thomas, Certified Maine Assessor at the Maine Revenue Services office.“However, you may want to review Title 30-A § 5721; this statute discusses an allowance to expend funds for public purpose.”
Title 30-A, section 5721 of the Maine Revised Statutes authorizes municipalities to raise money for specific purposes, but does not discuss crediting back taxes for property cleanup.
Title 30-A, §5721 says, “A municipality may raise or appropriate money for any public purpose, including, but not limited to, the purposes specified in sections 5722 to 5728”. Section 5722 allows municipalities to raise money for general operating expenses, such as police, fire, insurance, water, sewer, etc.; 5723 allows them to raise money for public works projects such as parks, bridges, sewer and water districts, cemeteries, and flood control and a fuel yard to sell fuel to its citizens without a profit. 5724 allows raising money for schools and libraries. 5725 allows raising money to support the poor, build hospitals and provide for the general health and welfare of the community. 5726 allows raising money for a Chamber of Commerce, Recreation Department, advertising, fishing, a historical society, a district court, elderly housing and affordable housing. 5727 allows raising money for celebrations, anniversaries, holidays or festivals. Finally, section 5728 allows municipalities to raise money to fund its official duties as required by law.
None of the taxation powers granted to a municipality in the Maine Revised Statutes allow a municipality to raise money from one group of taxpayers in order to pay the property or yard clean up expenses of another within that municipality.
However, that is what the town council recently agreed to do for the Michaud estate as a part of a contractual stipulation in the sale of the land to Stev Rogeski. In January, the council passed a resolution to grant the tax relief from the property in the amount of over $7,000 and release all liens to Rogeski directly; then they amended their decision a month later to release the taxes and liens to the Michaud estate in general so anyone purchasing the property could benefit from the credit. After further review, and public comments, the council in March chose to stand by their amended decision.
While the town council did agree to grant full property tax credit to the Michaud estate in exchange for a yard cleanup and razing the former Michaud garage, they are not at this time extending the same courtesy to other Fort Fairfield taxpayers who have equal or larger amounts of cleanup expense in their respective properties.