This Maine Municipal Association publication is presented for "Classroom Use Only."  Its intended use is to stimulate and aid in discussion and role playing within a classroom setting.

Without money government could provide no services. In Maine, the property tax is the most important source of revenue, currently providing 65 percent or almost two thirds of the revenue needed to operate local government in Maine.

The property tax includes real property, such as land and buildings, and personal property, such as machinery, equipment and recreational vehicles. Unlike the income tax, the property tax is not based on a person's income or ability to pay the tax. As such it is often referred to as a 'regressive tax'. It was not always. It made sense in colonial times, when we lived in an agricultural society and a person's wealth was based on land ownership and there were few expectations of local government.

To address this regressivity, there are several property tax "rebate" programs currently available to individual property owners, including the "Circuit Breaker" program, which helps 'pull the regressivity stinger" from the property tax by providing a rebate directly to both home owners and renters whose property taxes exceed a certain percentage of their mcome

To figure how a municipal tax bill is determined in Maine, one must first understand how the tax or mil rate is arrived at. The word mil comes from the Latin, meaning "thousand". Thus the mil rate is the amount of tax per 1,000 dollars of valuation. Thus a mil rate of one would mean that a property owner would pay one dollar for every thousand dollars of valuation. Thus if the mill rate is 15 and the property is valued at $50,000, the owner would pay 15 x $50 or $750 in taxes for that year.

To understand how the mil rate is determined,