By Morning Sentinel staff

With property taxes soaring in some communities because of revaluations, the squeeze is on for those who struggle to scratch up thousands of dollars each year so they can remain in their homes.

The pressure hits the elderly on fixed incomes, retirees, working families and just about anyone who owns property.

But an old idea that is getting a second look in some Maine towns may offer a way to ease the burden, officials say.

Tax clubs, similar to Christmas Clubs where you pay a bit monthly to build up a nest egg by December, are alive and well in many Maine towns and can offer residents some relief.

A tax club, according to the Maine Municipal Association, is a monthly installment plan that can be a very effective way for taxpayers to budget their property tax payments and avoid incurring interest charges. It can also help level municipal cash flow.

"It is an idea that has been around a long time but not that many communities offer it, and not that many people participate in it," said MMA's communications director Michael Starn. "But it has a lot of attractive features."

"As property tax bills have gotten larger, making payments on a monthly basis for many people is easier to do," he said.

"This is a convenience to the taxpayer. The goodwill it might generate has to be weighed against the administrative costs and headache of keeping track of these accounts on a 12-month basis versus collecting money once or twice a year when you sent out tax bills," Starn said.

The advantage to the town is that some tax money starts coming in during those lean months before tax bills go out, he said.

According to the MMA, the club is established annually by a vote at town meeting or by a city council that authorizes a tax collector to enter into a standard agreement with taxpayers who wish to participate. The agreement sets up equal monthly installments based on the actual or estimated annual tax assessment.

If payments are made on time, no interest is charged. If a payment is late, membership is automatically terminated and the person returns to the same due date and interest penalties as non-participating taxpayers.

Last year, the interest rate on overdue taxes was 12 percent per year after Nov. 1.

Taxpayers can always pay their taxes early but if they are not in the club, they don't have the interest-free benefit.

Wilton Selectman Irving Faunce, who works at Western Maine Community Action, presented the idea to town officials last week as an option for the most vulnerable taxpayers.

Many Wilton residents, especially those on fixed incomes, are still reeling from a property reassessment last year that officials estimate increased taxes for 70 percent of the parcels, often doubling the bill.

"Many of us make a monthly payment to a bank or mortgage company that has our mortgage payment, property tax and homeowners insurance wrapped up in one escrow account," Faunce said. "Then the company pays the town the tax."

"But many people don't pay that way and they have a lump sum payment to face," he said.

Faunce faced opposition to the idea from some selectmen and the town's administrative assistant who foresaw extra work for the town office staff.

But he believes that because participation is optional that voters at the June town meeting should have the opportunity to decide.

In the coming weeks, Faunce and Town Manager Peter Nielsen will be contacting officials in participating towns for feedback. Board Chairman Paul Gooch asked taxpayers to weigh in on the idea as well.

Wilton resident Sonny Dunham, the town's fire chief, said his taxes are paid monthly through an escrow account, but an installment plan for property taxes makes sense. The low wage scale in the area, the high price of heating fuel and gas, and the jump in local property taxes is hurting a lot of people, he said.

"People can't come up with that big lump sum," he said. "There a lot of people living paycheck to paycheck."

Resident Shannon Smith said she and her husband budget their money every month. She would not use a tax club and does not agree with offering the service.

"Why burden the town with an expense for something that people should be doing themselves? It is their responsibility," she said.

Among the Maine towns with tax clubs are Bar Harbor, Bath, Lincoln, Berwick, North Yarmouth, Lincoln, South Thomaston, Caribou and Houlton.

In Bar Harbor, Tax Collector Sarah Gilbert said the town's tax club started nearly three years ago with the aim of improving cash flow into the town coffers until taxes started coming in.

There are 50 residential taxpayers who participate in the plan out of 4,000 accounts and the town has an average annual tax bill of $3,000. If people miss two payments they are automatically off the plan, she said.

"I don't find it that much extra work and it is not a burden. It is a nice thing to offer the taxpayer, and I wish more people would take advantage of the service," she said.

"It is a win-win for the town and the taxpayer," she said.

Those on the plan are mostly people living on fixed incomes and the retired and are folks accustomed to budgeting expenses, Gilbert said.

Also, delinquency is very rare. When it happens, it is usually just a slip, she said.

In Bath, the results are mixed, according to Finance Director Abbe Yacober.

The club, in existence for decades, has 300 members out of a total of 3,500 parcels. Membership is restricted to year-round residential taxpayers.

"It is labor intensive," Yacober said. "We have to have an employee spend a couple of hours a day on it for the first two weeks of each month when the payments come in and about an hour a day for the last two weeks."

The town has the municipal software to accept electronic payments and about 100 pay with debit or credit cards or have payments taken directly from a bank account. The rest pay by check. She said there are two to three delinquencies a month that need to be followed up with letters.

"It is great for the taxpayer who would not be able to pay lump payments.

This allows them to budget monthly," she said.

In Lincoln, the club has 43 members with 3,600 tax accounts, according to Treasurer Gilberte Mayo.

"Mostly they are senior citizens, people who would really benefit by having their tax payments spread over a 12-month period with no penalty," she said.

And the cash flow is a welcome benefit, as well.

Lincoln's club is available to commercial taxpayers as well, and Lincoln Paper & Tissue uses it to pay its $80,000 a year tax bill, she said.

"We are here to serve the public," she said. "There is a little bit of outlay of time and effort but the tax club is a great program. People on it value it for their ability to make those payments."

She said there is minimal delinquency. If a payment isn't made, a reminder call from the deputy tax collector is all it takes.

"We have never kicked anyone out," she said.

Betty Jespersen - 778-6991

bjespersen@centralmaine.com