Maine could be paving the way for nonprofits across the country as it considers becoming the first state to impose property taxes on hospitals, private colleges and summer camps under a plan being pushed by Governor Paul LePage.
The republican’s contentious proposal has sparked outrage and a heated debate in Maine over the impact nonprofits have on their communities and whether they should eat the costs for municipal services they consume. It’s also raising questions about whether other states should follow LePage’s lead should his effort be successful.
“We are very much aware of it,” said David Thompson, vice president of public policy for the National Council of Nonprofits. “I was talking to a group in Oklahoma about it and they looked horrified.”
All states exempt nonprofits from property taxes either through laws or their states constitutions, Thompson said, Christian Science Monitor reported.
LePage has said nonprofit organizations are “takers, not givers” and argues that they need to contribute to things like police, firefighters and snow removal. His proposal, which is part of his $6.3 billion budget plan, would require organizations to pay municipalities taxes if their properties are worth more than $500,000. They would only pay taxes if their property value is above that threshold and would receive a 50 percent discount on the rate.
Nonprofit groups argue that the proposal would fundamentally change their long-standing relationship with communities, which is built on the understanding that they deserve to be tax-free because they improve the quality of life and provide services that they government otherwise wouldn’t if they weren’t around.
In Maine, hospitals, colleges and other groups are lobbying in large groups against the proposal, warning that it would force them to raise costs or eliminate jobs.
Similar proposals in other states have taken place before, but none have been seriously considered.