2025-2026 Budget and Potential Tax Relief Links
I am writing this piece to let you know the 2025-2026 Portland Public Schools budget is likely to be higher than the previous year’s budget. Since personnel and benefits make up well over 75% of the budget cuts are difficult.
I’d like to explain a bit about the budget process and include some links to tax relief options. Not everyone will qualify for tax relief but it will save money for those eligible.
The Portland Public Schools budget is being assembled now. The Superintendent will present the document in March. Parents, teachers, staff, students, administrators and the public have proposed and commented on possible budget items.
To be frank, the process is ongoing throughout the year but really gains steam in February and March. Resources are allocated in curriculum materials, academic and extracurricular equipment, transportation, food service, technology, and building maintenance to name a few.
More than three quarters of the budget is allocated for the personnel to teach, organize, transport and coach students. Every year these individuals receive a cost of living income adjustment. Health insurance benefits generally increase each year as well.
This means there will be some increase in the entire PPS budget. It is the School Board’s responsibility to direct the superintendent to limit expenses to those absolutely necessary for the education and welfare of the students. The City’s budget and the School Budget combine to determine the tax rate. I can’t remember a time when property taxes went down.
With essential Federal funding of student academic programs uncertain at best, property taxpayers need to be aware of all credits, exemptions and deferrals they are eligible for City and State taxes. They may change taxes by thousands of dollars. Programs are listed on the government websites, but I’ve tried to summarize the criteria and give a few links to forms. This is NOT tax advice. I believe many do not know these exist.
To apply for City of Portland or State of Maine residential property tax relief there are certain criteria and forms that you must complete. There are three types of tax relief: exemptions, tax credits and tax deferral.
1. Exemptions are used to calculate the property tax by lowering the taxable assessed value. You pay lower taxes because the tax is calculated on a lower number than the actual assessed market value of the home.For example, if your home’s assessed value is $400,000 and a tax exemption is applied then the taxes are calculated on a lower value for the home.
2. Tax credits are deductions to the tax payment. The taxes are calculated on the full assessed value, the tax levy is calculated and then a portion of the tax is decreased. If your home’s assessed value is $400,000 and a tax credit is applied the taxes are calculated on the full value of the home and then a discount is applied.
3. Tax deferral allows certain individuals to defer (postpone) payment of the property taxes on their primary residence until they pass away, move, or sell the property. While the individual has the deferral the state reimburses the municipality for the deferred taxes.
There are certain criteria to determine a person’s eligibility for tax relief and the amount of relief available. While each relief method has its own forms and criteria the following can help you decide if you are eligible for one or more programs. Links to the programs are included below. Thank you to Damon Yakovleff for the table. Be sure to talk to your financial advisor to review the benefits. I am not giving tax advice.
Resident Status
You must be a permanent resident of the State of Maine and the City of Portland. Your home must be your primary residence.
Income
There are income limits that vary with each program. You must complete an income tax form or forms: 1040M and PTFC (Property Tax Fairness Credit). Other financial assets may influence your eligibility for the tax exemption and the amount of the exemption. If you have a revocable trust, you may be eligible. Check with your tax advisor.
Age
There are age requirements for some, 62 years or 65 years and older. Senior renters may benefit.
Younger homeowners may benefit as well. Blind residents, disabled veterans, widows and widowers of veterans have no or different age requirements. The Homestead Property Tax Exemption is not age based.
Maine State Property Tax Relief
State Property Tax Deferral Program
Most Common Credits and Exemptions
Age Range Low-Moderate Income Higher Income
Single: $61,250
Family of 2: $80,000
Family of 3+: $97,500
Under 62 Property Tax Fairness Homestead Exemption
Credit (Up to $1000)
Homestead Exemption
Age 62-65 Property Tax Fairness Homestead Exemption
Credit (Up to $1000)
Homestead Exemption
P-STEP (Up to $1200)
65 and Over Property Tax Fairness Homestead Exemption
Credit (Up to $2000)
Homestead Exemption
P-STEP (Up to $1200)
I hope this explains the budget process and how, if you qualify, you can take advantage of tax relief programs offered by the city and state.
