OPEGA outlines 30‑day review of Maine’s affordable housing tax credit as legislature weighs sunset extension
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Summary
OPEGA told the Government Oversight Committee it completed a 30‑day limited analysis for the Taxation Committee on the state affordable housing income tax credit, finding the credit is one of many tools, that 33 states have similar credits and that evidence on cost‑effectiveness requires deeper study; OPEGA noted the Taxation Committee amended LD 2116 to extend rather than remove the sunset.
OPEGA analysts Carrie Hojerra and Jen Henderson briefed the joint Legislative Committee on Government Oversight about the office’s first 30‑day limited analysis, completed in 27 days at the request of the Taxation Committee. The review was prepared to inform consideration of LD 2116, an act that would have made the affordable housing income tax credit permanent.
The analysts outlined three lines of inquiry the taxation committee requested: (1) how similar credits operate in other states, including whether they use sunsets or appropriation controls; (2) recent affordable‑housing trends in Maine and nationally; and (3) readily available research on the credits’ effects. “These 30‑day, limited analysis projects were intended to supplement the full evaluation process,” OPEGA said in its presentation to the committee.
OPEGA reported 33 states — plus the District of Columbia — had some form of an affordable‑housing tax credit; about 19 of those used sunset dates or appropriation review mechanisms. The analysts cited a range of recent policy actions in other states (extensions, reductions, or unfunding actions) and provided appendices listing features and sources for each program for legislator follow‑up.
On need, OPEGA summarized Maine Housing data showing substantial unmet affordable housing needs: statewide assessments in 2025 indicated roughly 80–90% of need was unmet in most counties. OPEGA also said the state credit supported completion of 429 units between 2023 and 2025 and that another 525 units were in the pipeline; the state portion totaled about $30.9 million (roughly $72,000 per unit, about 17% of development cost), while federal LIHTC funds accounted for a larger share per unit.
OPEGA cautioned the committee that the literature on state and federal housing tax credits does not present a readily available, consensus estimate of relative cost effectiveness, particularly within the brief 30‑day window. “We did not find data that we could confidently summarize within this brief time frame on the merits, relative merits, and cost effectiveness of different housing tools,” the analysts said, adding that a full evaluation is due by March 2027.
Committee members asked detailed follow‑up questions about pipeline timing, whether projects were encumbered, and how Maine Housing allocates credits; OPEGA said the office relied on readily available program data and Maine Housing’s responses and offered to bring the full slide deck to the committee. Representative Anne Marie Mastracchio and others requested more granular completion‑date information for projects in the pipeline; OPEGA said it could seek that from Maine Housing but cautioned construction schedules can be unpredictable.
The Taxation Committee later reported LD 2116 back as “ought to pass as amended,” with the amendment extending the credit by eight years rather than removing the sunset. OPEGA told the oversight committee it would provide additional analysis in the mandated full evaluation next year.