Carol Carothers stands outside Belgrade’s city office on Wednesday. Carothers has collected more than 270 signatures on a petition that would create a tax credit program for settlers and require advance notice of new spending proposals. Anna Chadwick/Morning Sentinel

BELGRADE – The city administration is working on revising an article proposed in a citizens’ petition signed by more than 250 residents after it was unanimously rejected last month.

The petition, titled “City of Belgrade Property Tax Fairness Ordinance,” had three main goals: establishing a $2.5 million “Local Home Ownership Program,” requiring city officials to provide advance notice of new spending proposals, and prohibiting the city from publishing the names of delinquent taxpayers.

Officials say the city would have to take out loans to finance the planned homestead program.

The special committee unanimously rejected the original proposal at its July 16 meeting because it violated state law, which requires municipalities to publish the names of property owners who are behind on their taxes.

“We can’t change anything. The petition is here, we have to do the whole thing,” board member Carol Johnson said at the July 16 meeting. “Maybe we’ll try to come back in 60 days with an ordinance that we’re working on with the budget committee so we can have it ready and presented to the town hall meeting.”

The board members had until September 14 to address the legal concerns and submit a counterproposal.

The petition was organized by Carol Carothers, a 71-year-old Belgrade resident. She says she felt compelled to circulate the petition after a rise in property taxes and the end of a tax credit program for seniors to support Belgrade residents on fixed incomes.

Belgrade’s rising budget resulted in a 17 percent increase in taxpayers’ tax burden last year, city officials said, while Kennebec County’s tax burden rose 28 percent.

“Maine is the oldest state in the United States. There are a lot of seniors everywhere, and we live on fixed incomes,” Carothers said. “For seniors whose incomes are stagnant, that steady increase year after year plus inflation takes its toll.”

Carothers’ proposal would allow homeowners earning less than 350% of the federal poverty level to apply for tax credits through the city if their property taxes are more than 8% of their annual income. The amount of aid awarded depends on the income of the individual homeowner.

The proposal was modeled after Maine’s statewide Homestead Exemption Program, Carothers said. That program can reduce the value of residents’ property by up to $25,000 to ease the burden of property taxes.

If passed, the article would also require the city to publish notices 60 days before voting on new spending proposals, including the “specific reasons” why the city needs the funds and whether “the expenditures will result in an increase in property taxes.”

Municipal authorities in other cities, such as Freeport, have sought to establish a legal framework for the creation of the home ownership assistance program.

Regardless of what the board decides, Belgrade does not have the funds to pay the home equity loans, City Manager Lorna Dee Nichols said at the July 16 board meeting.

“We don’t have $2.5 million to pull from unallocated funds,” she said. “We would have to take out a loan to fund the program or pay our bills.”

The $2.5 million is just a one-time cash injection for the program, Carothers said. Added to that would be any tax surpluses that exceed three percent of the annual municipal budget.

However, according to city officials, providing these funds would require an overall increase in property taxes, which could defeat the purpose of the petition.

The petition is an attempt at transparency, Carothers says, and a response to the rapid increase in property taxes she and other residents have collected in recent years. The state legislature’s repeal last year of a year-long program to stabilize property taxes for seniors inspired Carothers to write the petition, she says.

The program, originally scheduled to take effect in 2022, would have allowed Maine residents over 65 who received a state property tax exemption to freeze their property taxes at the previous year’s level, regardless of their income.

Lawmakers ended the program after just one year due to massive budget overruns and concerns among some lawmakers that it would shift the tax burden on high-income homeowners onto middle- and working-class Mainers.

Officials originally expected the state to pay out about $2 million under the program, but according to the Maine Department of Revenue, the actual cost was more than $25 million.

However, Carothers said the proposed Belgrade Homestead program would primarily benefit the middle class by allowing homestead residents whose income is within 350 percent of the federal poverty line to apply for a tax credit.

“There are a lot of programs for low-income people, but there is very little help for middle-income people,” Carothers said. “I increased it to 350% because I want middle-income people to be included.”

It is unclear how many Belgrade residents might be able to apply for or receive benefits from the program, Nichols said.

The city has granted just over 1,000 property tax exemptions this year, she wrote in an email, but “the city has no way of knowing how many people could or would apply at this time.”

It is still unclear what changes will be made to the petition, but the special committee will present a revised version at its meeting on September 17, Nichols said.

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