Repeated nuisance algal blooms have been recorded on more than 53 Maine lakes and another 493 are considered at significant risk. One component of how people value lake water quality is reflected in what they will pay for property. The University of Maine recently completed the first ever definitive study 1 that clearly demonstrates one facet of economic loss when lake water quality declines. Individual models were fit for 22 lakes in 4 regional groups which allow calculation of the component of property price which is affected by water clarity. One can compute the increase or loss in value if water clarity changes.
Current losses are probably several times that amount.
These results show that these effects are very large and that they are greater for degrading water quality than for improving. It is clear from these estimates that the economic losses due to declines in lake water quality that have already occurred are real and very large. The future property tax implications of these losses can be substantial . The degree to which tax burdens would be shifted among regional towns is difficult to estimate and depends in part on which lakes experience significant water quality declines. No matter what the distribution of this loss would be, the real losers are the taxpayers and landowners whose investments have been eroded.