3 min read

Jason Andersen of Bangor works professionally in facilities and energy and sustainability management.

Imagine a wooden wagon wheel. You can polish the outer spokes until they gleam, but if you let the central hub rot, the entire wagon inevitably crashes.

In Maine, our municipal tax policy is actively polishing the spokes while letting the center decay.

For decades, the Maine Legislature has fiercely debated the Local Option Sales Tax. Time and again, representatives from growing “bedroom communities” vote it down.

Their logic seems airtight: Why should my constituents in Gorham pay a 1% sales tax to pave Portland’s roads? Or Hermon to fix Bangor? But by voting “no,” these towns are protecting a system that gives millions of out-of-state tourists, and themselves, a free ride, leaving Maine homeowners in hubs holding the bag.

The alarm bells are deafening. Voters across the state — from massive budget rejections in Lisbon to deep cuts in rural districts — are revolting against crushing property tax hikes. The financial fatigue is so severe that some small municipalities are legally dissolving.

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Every summer, millions of tourists pour in. Every morning, Maine’s economic hubs see their populations double as commuters flood into Augusta, Bangor, Lewiston and Portland. They wear down commercial corridors, rely on emergency services and strain utilities.

Yet, because Maine bans local sales taxes, the massive cost of maintaining that regional infrastructure falls entirely on city residents. Tourists and commuters drive on our roads, buy souvenirs and leave. The local property taxpayer pays for the asphalt.

When a hub city needs to upgrade a crumbling intersection or replace a failing $100 million elementary school, it has only one legal mechanism: hike property taxes. Crushed by funding regional services on a localized base, cities face the “urban doom loop.”

As taxes skyrocket and infrastructure decays, the high-income families and businesses vital to Maine’s future simply leave the state. You cannot maintain premium property values in a bedroom community if the regional economic engine dies.

We must flip our oppositional thinking on its head. We don’t need a city bailout; we need a regional infrastructure fund.

Instead of a localized tax, the Legislature must authorize a 1% regional sales tax applied within designated economic zones, utilizing a mandatory 60/40 revenue split. This plan includes:

  • 60% host retention (operations lock-box): The hub city retains 60%, statutorily restricted to variable, usage-driven services strained by visitors: police, fire, EMS and road maintenance. Because sales tax fluctuates, it is expressly prohibited from being used for long-term debt.
  • Preserving property taxes for education: By paying for daily operations with the sales tax lock-box, cities free up their stable, predictable property tax base. This allows them to securely and routinely fund long-term investments — like $100 million school bonds — without spiking the local mill rate.
  • 40% regional distribution: The remaining 40% is deposited into a regional fund and distributed annually as a direct dividend to surrounding bedroom communities for their own infrastructure repair.
  • Mandatory property tax relief: To ensure accountability, a defined portion of this regional revenue must be applied as dollar-for-dollar property tax relief in all participating municipalities.

This model works. Pennsylvania’s “RAD Tax” saved Pittsburgh’s regional infrastructure by sharing a 1% county sales tax with 128 surrounding suburban municipalities. Georgia’s SPLOST allows regions to levy a shared sales tax for capital projects, forcing tourists and transient workers to help fund massive infrastructure. Colorado uses regional transportation authorities to share revenue, ensuring the periphery benefits just as much as the core.

Under this model, a suburban legislator’s vote is no longer a vote to “fix the city.” It is a vote to permanently lower property taxes in their own hometown, while ensuring everyone who enjoys our communities pays their fair share to make them possible.

Our economies are not divided by town lines. Let us widen the base equitably, capture the revenue we are leaving on the table and build the modern facilities our state needs before the hub breaks completely.

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