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May 2006

The Maine Leaseholders Association

A Discussion With Stu Kallgren, of the Maine Leaseholder’s Association

The Maine Leaseholder’s Association was organized in 1990 to address the concerns of leaseholders in the State of Maine. Stu Kallgren has served as its president since 1996.

  AMM: I can’t remember where we left off last month, so can you tell me what we have on the table as of right now?

  STU: Well, a lot of people have gotten their lease bills. All over the state. I’m hearing complaints that the prices are going up.

  AMM: The reasons?

  STU: The Bureau of Taxation has reassessed shorefront properties and, as a result, the values went up dramatically. On leased lots, what that does is compound the burden on the leaseholder because the landowner goes up on the lease as well.

  AMM: So the leaseholder, who pays the taxes, is not only stuck with an increased tax burden, but the amount of his lease is also increased?

  STU: Yes, when the taxes on the land goes up $200, the lease goes up $600, $800, or more.

  AMM: That hurts.

  STU: The landowners blame the state, and the state simply says that this (the new evaluation) is what people are willing to pay for the land.

  AMM: Isn’t that fair?

  STU: No, not really. We don’t agree with that, especially on leased property. The landowners are not selling the land, so how can you put a value on something that can’t be bought?

  AMM: And then again, there is also the fact that this land would be worth hardly anything at all if the leaseholder hadn’t added the value to it, by building the camp, and maintaining the property, right?

  STU: I’m hearing that Howard Weymouth (Katahdin Timberlands) is even blaming the Maine Leaseholders Association for the increase in valuations around the lakes. I don’t know where he gets that because we’ve always maintained that these valuations were too high as it was. As you said, we’re the ones who have improved the property, making it what it’s worth today. The landowners have done nothing to improve the property. The leaseholders have built the camps, cleaned up the shorefront around the lakes. We have improved the property, not the landowners.

  AMM: The last time we spoke, you had mentioned a letter requesting Governor Baldacci to set up a commission to study leaseholding issues. Has anything developed on that front?

  STU: Last Tuesday, Al Mosca and I met with our representatives, Paul Davis and Herb Clark, as well as a couple of people from the Bureau of Taxation for the Unorganized Territories. The folks from the taxation bureau told us that all of the valuations in the UT were going up, but when we asked about land in tree growth, they said that the tax on tree growth was going to remain flat.

  AMM: Go on.

  STU: Leaseholders with camps, especially on lakes, are bearing the brunt of the tax increases. Because of it, the mill rates will go down, the result being that the large landowners will have a significant decrease in the taxes that they will be paying. While the leaseholders will be paying more in taxes and more on their lease, the tax burden on the landowners will be less.

  AMM: Did you find anything out about the reevaluations?

  STU: They are trying to justify the increase in valuation because people from out of state can afford to pay - and will pay - more than the land is worth, especially if the land includes lakefront property. What this is doing is taxing the citizens of Maine off of their property, and I can’t imagine the citizens of Maine allowing this to happen.

  AMM: I can. It’s called rural cleansing.

  STU: This is like something that organized crime might do. Getting back to your question about the governor setting up a commission to study the problem, the governor has the power to do something to stop this. We did go to his office, but he was out of state, so we talked to one of his aides.

  AMM: Uh huh ...

  STU: The governor can stop this tax increase right now, then once the commission has completed its study of the issues, then we can go on from there. The large landowners are reaping hundreds of thousands of dollars through these increases, not to mention the fact that the tax on his land in tree growth is going down.

  AMM: What can be done?

  STU: People need to get involved in their government. I’ve got to give credit to the people of Allagash for going down to Augusta in busloads, to lobby for their interests and to attend the hearings on issues that matter to them. If we are going to maintain our way of living, we have to be willing to get involved. Every year, more of our land is lost to large landowners from out of state, or out of the country.

  AMM: That’s pretty much what’s happening here in Millinocket. This was a prosperous little town once, and now it’s owned almost lock, stock, and barrel by someone from Massachusetts. But that’s another issue.

  STU: Right now, it’s in the governor’s lap. Let’s see what he does with it. We’ll see if he’s really for the people, or not. We expect to hear something soon.

  AMM: Anything else?

  STU: I think that about does it for now. Please let any of the leaseholders know that if they have any questions, they can always contact me at 723-4476.

  AMM: Thanks, Stu. I’ll see you next time.

All Maine Matters
Vol. 1, No. 5 May 2006

The Maine Leaseholders Association