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Bath officials urge higher state reimbursements for business equipment tax exemption as BIW growth shifts burden to homeowners
Summary
City of Bath officials and municipal representatives told the Taxation Committee LD 1206 would gradually raise state reimbursement for the Business Equipment Tax Exemption (BETI) after Bath saw BETI‑eligible value grow nearly ninefold since 2012 — most of it at Bath Iron Works — leaving residential taxpayers to cover lost revenue.
Sen. Denise Tepler and officials from the city of Bath urged the Joint Standing Committee on Taxation to pass LD 1206, legislation to increase the state reimbursement percentage for the Business Equipment Tax Exemption (BETI) that exempts certain personal property from municipal taxation to encourage business investment.
Sen. Tepler told the committee BETI was designed to encourage capital investment and that the state payment to municipalities has declined while the exemption base has grown dramatically in some places. ‘‘In the District I represent, the City of Bath has a unique dilemma,’’ Tepler said, noting the value claimed under BETI in Bath rose from $28.2 million in 2012 to $251.2 million in 2024.
Bath city leaders said the growth of exempt value — largely tied to Bath Iron Works — had reduced the city’s taxable base while the state reimbursement percentage fell (Bath reported 60% reimbursement in 2024). Miriam Johnson, chair of the Bath City Council, told the committee the city ‘‘lost over $1.6 million in revenue just in 2024’’ because of BETI and that residential taxpayers were shouldering an increasing share of the burden.
Mark Myers, Bath city manager, said the program’s administration also creates local costs and that municipalities receive only $2 per application processed from the state — far less than the local administrative time involved. ‘‘Over the past 4 years, the city is averaging $1,500,000 in lost revenue annually from the BETI program,’’ Myers said.
Witnesses including assessors and municipal representatives told the committee that BETI’s eligibility rules broadened over time and that the state’s reimbursement has not kept pace with the growth of exempted value. Several witnesses referenced the 2020 Office of Program Evaluation and Government Accountability (OpEGA) evaluation, which found the program has limited impact on capital investment while imposing administrative burdens on municipalities.
LD 1206 would phase up the state reimbursement toward 80% by 2030, reducing the share local property taxpayers must cover. Supporters said the change would restore fairness in communities where a small number of large BETI‑eligible firms create a disproportionate share of exempted value. Opponents were not prominent in the hearing; committee members asked for statistics and documentation about BIW’s share of Bath’s BETI value ahead of a work session.
Why it matters: BETI can shift tax burdens from businesses to local homeowners when exempted values grow faster than state reimbursements. Bath officials said the effect has been pronounced in their community and asked the Legislature to adjust reimbursements to prevent further mill‑rate impacts on homeowners.
Next steps: Committee requested more data and a fiscal estimate; Bath officials promised additional figures for the work session.
Sources: Testimony from Sen. Denise Tepler; Miriam Johnson (Bath City Council); Mark Myers (city manager); Kerry Leishman (assessor); public records on BETI cited by witnesses.
