Ed Committee: methodology determining “ability to pay”

Presentation of procedure, methodology, and audit

Mike Rogers, Maine Revenue Services property tax division:

This relates to EPS as equalized state-certified property valuation is used to determine ability to pay.

2009 state valuation. Annual, but two year lag, based on 2007 local property sales data.

[Presentation of procedure, methodology, and audit]

(In answer to question by Rep McFadden) Real estate value cycles affect different parts of the state differently at different times. Some areas valuations are decreasing but not everywhere.

Ability to Pay

Mr. Rogers did an excellent job explaining how his division makes the calculations it does for the "state valuation" numbers which drive the EPS formula. As I understood his presentation, the basic points were:

1. The Maine Constitution requires equalized property valuations statewide.

2. Towns decide how to assess, but once they do, they must assess equally across the town.

3. The state then takes the valuations sent to them by the towns and equalizes the numbers across the state.

4. The FY09 state valuations are based on verified April 2007 numbers.

5. It is up to the Legislature to determine how those numbers are used in various other calculations (GPA, EPS, county taxes, etc).

6. If the Legislature wants to use some measure other than property taxes to determine how towns pay for education, they would need to decide that. A Constitutional amendment might be required.

It would be nice to have had the handouts the Committee was seeing.