BANGOR – As one of Maine’s service center communities, Bangor is home to dozens of tax exempt institutions, ranging from schools and hospitals to churches, charities and museums.

As local officials see it, tax exempt organizations tend to cluster here for the same reasons families and businesses do: quality city services and schools, easy access to transportation networks and a desire to live and work in one of Maine’s largest cities.

But with the Palesky tax cap initiative on the Nov. 2 statewide ballot that would limit municipalities’ ability to raise money through taxation, tax exempt property could become a tempting source for making up some of the losses.

As it stands, Bangor’s tax exempt properties account for nearly $618 million – or 33.6 percent – of the city’s $1.8 billion total valuation.

Simply put, more than a third of the city’s assessed value is off-limits to taxation.

If taxable, the exempt property would yield more than $13.6 million in taxes, based on Bangor’s current tax rate of $22.05 per $1,000 in property valuation.

“I think for the size of our town, the number of tax exempts that we have is probably reasonable,” City Assessor Benjamin Birch said in a recent interview.

“Bangor’s a very nice community, and what makes it nice is our regional services,” he said, citing Bangor International Airport, the two hospitals headquartered here, schools and colleges and other amenities enjoyed by residents and nonresidents alike.

City Council Chairman Dan Tremble is among those city officials who note that while many of the nonprofits located here provide services to the region, no other area municipalities contribute toward their upkeep. City Manager Edward Barrett agreed.

“The core of the problem is the uneven distribution of [costs associated with housing tax exempt institutions],” Barrett said in an interview earlier this month.

“It’s not that we’re beating up on tax exempts,” he said. “One of the things that’s very important to remember is that [tax exempts] contribute to the economy.”

As Barrett sees it, Bangor’s tax exempt institutions provide needed public services, create jobs and bring their spending and purchasing power – and that of their employees – to the city.

“So it’s a very important part of our economy, but I think that under the pressure of Palesky, the Legislature is going to be faced with pressure to find ways [to help municipalities recoup costs connected with housing tax exempts],” Barrett said.

From time to time, legislation has been introduced that would allow municipalities to charge tax exempt institutions for municipal services. They have yet to gain approval.

“Historically, it’s been difficult to get any change that would affect the tax exempt community,” Barrett said.

But that doesn’t mean the city isn’t trying.

Bangor, like many other communities, has long encouraged tax exempt institutions to make voluntary payments in lieu of taxes. So far, there have been few takers.

One exception is Norman N. Dow Post 1761 of the Veterans of Foreign Wars.

During a City Council meeting in August, local officials issued a proclamation recognizing the post for its voluntary payments in lieu of taxes for the past 11 years. This year’s check was for $1,000.

“Well, we get an awful lot of help from the city, from the fire department, and the police is very helpful,” Robert Phillips, the post’s quartermaster, said this week. “We just decided among ourselves that since the city doesn’t tax us, it was the right way to go.

“We did it because we wanted to try to set an example, but we really haven’t picked up too many others,” Phillips said.

Bangor in 1991 looked at a plan to establish a “fire utility” and charge a “fire fee” to all of its property owners, be they tax exempt or not.

Fire protection was considered a relatively easy area in which to redistribute municipal costs because those costs could be assessed in a standardized way, in this case through a system based on square footage or acreage.

While that proposal never came to pass, if Maine voters adopt the tax cap, the city likely would be forced to revisit the fire fee and similar plans for better covering the costs of other services, such as trash removal, Barrett said.

Tremble said the state needs to take a hard look at the criteria for tax exempt status, regardless of the outcome of the Nov. 2 tax cap vote.

“It’s just a fairness issue. These tax exempts usually provide services to a region,” yet the costs associated with housing them rest completely with the city, he said last week.

Tremble also noted that exemptions are granted to some organizations that seem to offer relatively little by way of charitable services. A case in point, he said, is Eastern Maine Medical Center and its parent company, Eastern Maine Healthcare Systems.

“They do very little charity care and their CEO is probably making 20 times what the average household earns,” Tremble said, though he acknowledged the parent company does pay taxes on parts of its health care mall on Union Street.

“They [legislators] have either got to make the [tax exempt] standards a little tougher, find some way for the state to reimburse towns for the lost tax revenues or set a threshold,” Tremble said.

According to EMHS spokeswoman Suzanne Spruce, the system’s Bangor holdings, which include Acadia Hospital, EMMC and EMMC’s community wellness and family practice divisions, provided $36 million in charity care in 2003, according to the organization’s 2003 annual report.

At EMMC alone, the level of uncompensated care last amounted to 3.9 percent of gross revenues, or income before expenses were paid, Spruce said.

In addition, she said, the Bangor holdings provided a combined payroll of $228 million last year and paid taxes on parts of EMHS’ Union Street facility, Webber buildings on State Street and Sylvan Road property.