WATERVILLE — Most property owners in the city will see an increase later this summer in their tax bills.

The increase is due mostly to a $2.5 million jump in the municipal and school budget the City Council passed June 20, but a property valuation adjustment this year is also contributing, according to city officials.

About 600 property owners will not see an increase in their tax bills because they applied for Maine’s Property Tax Stabilization Program, which enabled certain senior residents to stabilize or freeze property taxes on their homesteads for one year.

The city’s assessing department made property valuation adjustments this year because of several years of high sale prices in the real estate market and the city’s efforts to remain in compliance with state mandates, according to acting City Manager William Post.

Post said in a statement that state laws mandate that if overall property assessments in the city are below 70% of the market value, a reassessment based on market conditions must be done.

“It is important to note that sales prices for real estate throughout the state have been on the increase over the past several years and show no signs of decreasing,” the statement read. “In all areas of the state, sale prices are significantly higher than assessed valuations.”

The city reassessed property values to promote fairness among property owners, according to Post. He said that over time, different properties increase in value at different rates, which results in inequities. Valuation adjustments based on market value equalize values, thereby making property taxes more equitable.

Many property owners will see an increase in their tax bills because of increases in taxes generated by the 2023-24 municipal and school budget the council approved in June, according to Post.

“However, it should be noted that the city’s mill (property tax) rate will drop to a level not seen since the 1980s, because of the reassessments,” he said. “The new valuations will reflect today’s real estate market and bring the city more in line with other communities.”

The changes, he said, will go into effect for the 2023 tax year and be reflected in tax bills property owners receive later this summer.

Post was out of the office Monday, but City Assessor Paul Castonguay said property tax bill increases are mostly due to the $2.5 million increase in the municipal and school budget.

If one divides $2.5 million by 6,000, the number of tax bills to go out in the city, the average is a $420 increase per tax bill. Castonguay said some people will pay less than that and some more. He estimated the tax increases range from between $200 and $2,000, and that includes residential and commercial properties.

The tax rate of $25.85 per $1,000 in assessed valuation is expected to decrease to $19.90. Normally, if a tax rate decreases, property taxes decrease, but in this instance, the property valuation adjustments made this year resulted in higher valuations, which drives the tax bill increases.

Whether tax bills decrease or increase next year depends on the size of the combined municipal and school budget.

City councilors last month approved a $56.34 million municipal and school budget for 2023-24.

Increases in the municipal budget are reflected in wages; fuel, gas, electricity and supplies caused by inflation; and hikes in salaries for nonunion employees, according to officials.

The $30.27 million school budget reflects a $1.8 million increase to the $28.4 million budget approved last year.

Copy the Story Link

« Previous

Bowdoinham building a new boat launch

Next »

Biden to focus on economy, manufacturing in visit to Maine on Friday