Leaders of Portland nonprofits left scrambling for answers after losing tax-exempt status are exploring options for recourse, even as city officials maintain their hands are tied.
At least one organization has filed a formal appeal, but city councilors — and even the city’s attorney — have told others suddenly facing big property tax bills that pushing for legislation to update state laws on how exemptions are decided might be the best avenue.
Several representatives from the impacted nonprofits met Thursday to discuss paths forward, but left with many of the same questions unanswered.
Eric Brown at the Maine Irish Heritage Center, which faces a $50,000 tax bill and the threat of closure, said organizations feel like they are in a game of ping pong, with Portland officials telling them it’s a state issue, and state officials saying it’s a municipal issue.
“I find that unbelievable,” he said.
Much of the outcry from nonprofits and residents this month has landed at the feet of city councilors, who have been reminded more than once by the city attorney that assessing office decisions are not subject to “direction and control of the municipality.”
Municipal tax assessors in Maine are considered agents of the state and must follow state statutes for assessments, but they are also granted the authority to make decisions on exemptions locally.
Councilor Ben Grant said Thursday that he believes legislation is “how this has to be fixed” due to the city assessor being insulated from the political process.
“We don’t want to be in the position of telling the assessor how to interpret state law, but we can be advocating for statutes to say something more clear,” he said.
Mayor Mark Dion said this week that while many have assumed city officials have some authority to step in, the council “cannot intervene.” He also pushed back on the idea that it’s somehow a “plot to squeeze money” out of nonprofits, but said based on the reaction from nonprofits so far, he sees value in some kind of state-level review, perhaps by the Legislature’s Taxation Committee.
“It’s an opportunity for both sides to be consistent with state law, and that discussion has to occur at the legislature,” he said.
‘EXISTENTIAL CRISIS’
The city has maintained that the revocations were the result of a thorough review of all tax-exempt properties in Portland stemming from the 2025 revaluation, and that all decisions are in line with state statute.
However, the breadth of the revocations — 17 in one year — has led to questions over whether Portland assessing staff has adopted a stricter interpretation of state law.
Many impacted nonprofits have been told revenue generated through ticketed events, weddings and liquor sales is keeping them from being considered a charitable organization despite maintaining the same core missions.
Those organizations include the Maine Irish Heritage Center; Maine Public; Mayo Street Arts; Avesta Housing; Lion’s Club of Peaks Island; Clayton’s House, a Dempsey Center hospitality home for cancer patients; and Portland Community Squash.
Barrett Takesian, executive director of the squash facility on Noyes Street, said when he recently prepared 72 pages of documentation in hopes of expanding the organization’s exemption from partial to full, he “misread the room.”
“The revocation letter was harsh to put it lightly,” he said.
City Councilor Wes Pelletier, who supports legislation, said “it’s troubling that one individual can throw all of these organizations into an existential crisis with zero precedent or warning.”
Nonprofits can appeal a denial or revocation with the assessor. If that’s denied, the abatement can then be appealed to the local board of assessment review and to the Superior Court.
Avesta Housing, which had its tax-exempt status revoked for five parcels, filed an appeal this week. Communications manager Rod Harmon said the city’s decision centers on Avesta’s partnerships with for-profit entities, but that their appeal explains that those partnerships are directly related to the federal Low Income Housing Tax Credit program. Any revenue generated, he said, is reinvested into expanding affordable housing.
In an email to the council late last week, City Attorney Michael Goldman said he believes strongly that the decisions of the assessor “are consistent with applicable laws and that they will be upheld on appeal.” Goldman even suggested the nonprofits could lobby the legislature.
Rep. Michael Brennan, D-Portland, said he’s spent a lot of time discussing this issue over the last two weeks with nonprofits and others, and is still trying to understand where the responsibility for the decisions rests — locally or in Augusta.
Brennan said since there’s only a month left in the current legislative session, it may be too late to introduce a bill. But, he said, if the city has the discretion to interpret state law, “their ability to make another decision would be the easiest course toward a resolution at this point.”
Referring to the Maine Irish Heritage Center, Brennan said, “a significant asset could go away. I’m not sure how that benefits the city.”
Mary Alice Scott, director of advocacy for the Maine Association of Nonprofits, said her organization is also seeking clarity on the state law used to determine exemptions, and that it appears Portland is “interpreting state law in a more strict way than other municipalities.” She said the fact that Maine Public maintains exemptions in other cities is an example of the confusion it has caused.
“We’re doing what we can to support the organizations that are the invisible backbone of our community,” she said.
Both Scott and Brennan said adding to the confusion among residents is that the city is also considering a Payment-in-Lieu of Taxes program at the same time, which would ask larger nonprofits to make voluntary payments to the city. The council is set to vote on the policy on Monday.
‘THOROUGH AND PAINSTAKING’
The 17 organizations that have been impacted by the assessing decisions over the past year have not lost their federal status as nonprofits, only their exemption from paying Portland property taxes.
Jessica Grondin, the city’s spokesperson, said the assessing office has conducted “a thorough and painstaking process” to make sure all properties are fairly and equally taxed, but that it’s “not based on a new interpretation of law.”
Grondin said the appeal process is the primary way to address property owner concerns and that the assessor’s office is trying to be “as transparent as possible.” Several of the impacted nonprofits have already met with assessing staff, she said.
Dion said that as Portland staff faces the brunt of questions, people should also be asking why other municipalities aren’t seeing these types of reviews.
“If they’re legally responsible, why aren’t they doing it?” he said. “Does it fall to Augusta to say we should all be doing this annually?”
At Mayo Street Arts, which was told that ticketed events and alcohol sales were the primary reason for losing its exemption, executive director Ian Bannon said he’s also been lobbying state agencies for help.
Bannon said he simply wants the assessments to be done fairly. He said Mayo Street Arts has been told that selling alcohol or setting a ticket price, even with a pay-what-you-can policy, are “immediate disqualifiers.”
“There are other organizations in town that sell tickets and alcohol but still have their exempt status,” he said. “The assessor’s office can’t have it both ways.”
