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Tuesday January 28, 2025

Portland Deserves a Fair Tax System—Here’s How We Get There

Last night, the City Council held a sobering discussion about the challenges facing Portland’s FY26 budget. Proposed state budget cuts to General Assistance (GA) and shelter funding will force millions of dollars in costs onto Portland taxpayers. Without meaningful support from the state, these shortfalls will disproportionately hit Portland’s seniors, low-wage workers, and middle-income families—the very people already squeezed by the high cost of living, stagnant wages, and decades of policies that prioritize profits over people. As the largest regional provider of emergency shelter, Portland is shouldering the burden of Maine’s housing and homelessness crises. Our regressive property tax system only makes matters worse, forcing those least able to pay to subsidize the consequences of these systemic failures.

The Problem with Property Taxes

Portland’s property tax system levies the same rate regardless of income or ability to pay. For wealthy property owners, this tax is an inconvenience; for low-to-moderate-income families, it can be devastating. Wealthier residents benefit from rising property values, while renters and homeowners on fixed incomes often see their housing costs skyrocket, driving displacement and economic insecurity.

Meanwhile, we’ve seen little movement on state-level tax reforms to address this inequity, though Maine Municipal Association, which advocates for municipalities on issues, is pushing hard for relief through its legislative platform. Proposed bills to increase state reimbursement for General Assistance and homestead exemptions could provide some relief to property taxpayers, but Portland needs a solution that works for us today.

A Local Solution: Expand P-STEP

Portland’s Senior Tax Equity Program (P-STEP) provides property tax rebates to low-income seniors, including renters. It’s a vital but underutilized program, with just 322 participants last year. Compare that to the over 6,000 Portland residents who received the state’s Property Tax Fairness Credit (PTFC), and it’s clear we’re leaving relief on the table.

Expanding P-STEP offers a pathway to fairer taxation while addressing our budget challenges. Here’s how:

  • Improved Outreach: Many eligible seniors, especially renters, aren’t aware of P-STEP. Better outreach targeting renters directly could dramatically increase participation.
  • Phased Expansion: Over time, we can amend P-STEP to include all income-eligible residents, not just seniors. This expansion would effectively create a local progressive tax system, where rebates offset the tax burden for those least able to pay.

By ensuring 100% uptake of P-STEP and gradually broadening its scope, we can build a fairer, more sustainable tax system while protecting Portland’s most vulnerable residents.

Expanding P-STEP isn’t just about tax fairness, it’s about standing up to a system that prioritizes profits over people. It’s about saying “no” to austerity and “yes” to investing in our community. It’s about making sure seniors can age in place, families can afford groceries, and our city’s future is not at the mercy of regressive tax structures.

State-Level Advocacy: Join the Conversation

The challenges we face require bold solutions. Expanding P-STEP is one way Portland can lead the way on local tax reform, but we also need to continue advocating for state-level changes to bring more fairness and equity to Maine’s tax system.

Portland’s Legislative delegation and the City Council’s Legislative and Nominating Committee, on which I sit, are actively working to address tax fairness at the state level. We’re engaging with our state leaders to push for reforms that could provide much-needed relief for property taxpayers, including increasing state reimbursement for General Assistance and expanding support for our schools.

I encourage constituents to tune into our upcoming conversation with legislative leaders this Friday morning. These discussions are critical for advocating for the state-level support Portland needs, and your input matters.

Together, we can build a city where no one is forced to carry more than their fair share.

Send me an email and let me know your thoughts on this approach and how we can work together to ensure that fair taxation remains a top priority for Portland.

ksykes@portlandmaine.gov 207-558-5764

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