Portland will not ask tax-exempt organizations to make property tax payments, ending months of debate and strong opposition from nonprofits and the Portland Regional Chamber of Commerce.
By a 2-7 vote Monday night, the City Council defeated a proposed payment-in-lieu-of-taxes ordinance, which had been floated as a potential revenue stream to offset rising residential property taxes that some councilors said are driving homeowners to leave the city.
The measure would have asked certain larger nonprofits, including colleges and hospitals, to make voluntary property tax payments.
The city estimates it has close to $4 billion in tax-exempt property, though some speakers at Monday night’s meeting, including Jennifer Hutchins, executive director of the Maine Association of Nonprofits, disputed that figure. Hutchins said a significant percentage of properties owned by nonprofits are held by state and federal entities, and are not taxable.
Nonprofit services
Hutchins, along with representatives from MaineHealth, the University of New England, Maine College of Art and Design and Avesta Housing, argued that the wide range of services nonprofits provide in fact save the city money, while improving residents’ quality of life.
Dr. Charles Morris, chief medical officer at MaineHealth Maine Medical Center in Portland, said the organization provided close to $23 million in free care in 2025, along with an additional $11 million through MaineHealth Behavioral Health, and that the hospital operates on a narrow margin.
Ed Cervone, UNE’s director of strategic partnerships and external relations, noted that the school’s Portland campus operates four health clinics providing free and reduced-cost services, and that students volunteer in schools and nursing homes across the city.
Strained resources
Hutchins said that federal funding cuts have further strained already tight budgets for nonprofits.
“Nonprofits are facing extremely difficult times as a result of federal cuts,” she said.
Jon Kachmar, executive director of Portland Trails, said inflation is affecting his organization’s bottom line and that “unlike for-profit businesses, we cannot simply raise prices.”
Maine House of Representatives Speaker Ryan Fecteau, D-Biddeford, who serves on Avesta Housing’s board, said that “federal pressure has changed things dramatically.”
District 5 Councilor Kate Sykes first proposed the property tax ordinance to the council’s finance committee three years ago.
“Nonprofits do incredible work, no doubt about it,” she said at Monday’s meeting. “The taxpayers of Portland are paying for the ballooning nonprofit sector” with rising property taxes.
Recognizing the council would vote down the ordinance, she proposed an amendment requiring nonprofits to submit annual reports to the city.
“We need to bring nonprofits to the table and we need a partnership with the nonprofits,” she said. The amendment failed 3-6.
‘Get out of your way’
Before voting against the amendment and the ordinance, Mayor Dark Dion said, “I’m looking to recognize the source of our lost income; it’s because businesses are not doing well. And we’re trying to cannibalize the people who are there to help us out.”
He also told nonprofit representatives in attendance that “we should just get out of your way and let you do what you do.”
