Daniel W. Walker [email protected]

TESTIMONY OF DANIEL W. WALKER ON BEHALF OF ASSOCIATION OF INDEPENDENT SCHOOLS BEFORE THE COMMITTEE ON TAXATION

In opposition to LD 659, “An Act To Ease The Property Tax Burden By Authorizing Municipalities To Require Payments In Lieu Of Taxes From Certain Exempt Organizations.”

Joint Standing Committee on Taxation

April 14, 2021

Senator Chipman, Representative Terry and members of the Taxation Committee, my name is Daniel Walker, and I am an attorney with Preti Flaherty and I am here today on behalf of Maine Association of Independent Schools (MAIS) to testify in opposition to LD 659.

MAIS 23 members are a diverse group of educational institutions, including Maine’s earliest secondary school () dating to the 18th century with charters signed by Governor John Hancock, as well as much newer schools, schools with varied missions, schools which serve primarily public-tuition students, and some sectarian schools. MAIS schools educate 9000 students in pre-K through Grade 12, with 4600 publicly funded and 4400 privately funded. What all MAIS schools have in common is their accreditation by the New England Association of Schools and Colleges.

LD 659 would permit municipalities to adopt an ordinance to impose an impact fee on certain property that is exempt from property tax unless the nonprofit enters into agreement with the municipality to make a payment in lieu of taxes (“PILOT”). This bill does not recognize the importance to the community both financially and culturally of the independent schools.

MAIS schools have a tremendous impact on their host communities and regions. Over 2,200 Maine people are employed in MAIS schools. They pay over $120 million in salaries and benefits, and over $350 million is contributed to the Maine economy. Each school adds value to their host community and region in their own way. The independent schools save the State of Maine millions of dollars per year.

Nearly all of the member schools also permit the use of various facilities to the general public or outside groups, sometimes for a modest fee but often at no charge. These facilities often do not exist elsewhere in their communities – facilities such as large auditoriums, conference rooms, or gyms.

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Maine’s independent schools already provide much financial and charitable support, jobs, services, culture, and use of facilities to the community. There is a reason they are tax exempt. The value of these services and benefits outweighs the benefit of a property tax. Imposing a required PILOT is a disguised attempt at levying a property tax on these nonprofits and will only hurt the quality of education provided by these schools to their communities, as these schools will have to find the revenue to pay those taxes, thus eroding their ability to provide a quality education. And, in the case of the town academies, we would end up with a situation where the municipality is taxing a school that functions much like a public high school, but is technically a non-profit.

These private schools are not competing with proprietary businesses. We know of no secondary school in Maine that is not tax-exempt, whether it is operated by a local government or whether it is serving the residents of a local government.

If municipalities want to collect services charges from non-profits, they may do so under current law. Many do for sewer, water, and trash collection. There is nothing to prevent them from doing so for other services, except perhaps local politics.

Thank you for the opportunity. We urge you to oppose LD 659.

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MAIS MEMBERSHIP

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The Bay School, Blue Hill Berwick Academy, South Berwick

Bridgton Academy, North Bridgton Carrabassett Valley Academy, Carrabassett Valley

Cheverus High School, Portland Chewonki Foundation, Wiscasset Erskine Academy, South China John Bapst Memorial HS, Bangor

Fryeburg Academy, Fryeburg , Dover-Foxcroft

Gould Academy, Bethel George Stevens Academy, Blue Hill

Hyde School, Bath , Hebron , Lee , Kents Hill

Maine Central Institute, Pittsfield Lincoln Academy, Newcastle

North Yarmouth Academy, Maine Coast Waldorf School, Yarmouth Freeport

Washington Academy, East Machias Thornton Academy, Saco

Waynflete School, Portland

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