SOUTH PORTLAND — The city’s property tax rate will be 11 cents lower than projected for 2016-17, which means many homeowners will see their property tax bills decrease slightly this fiscal year thanks to a combination of factors.
The City Council approved a combined $82.7 million municipal, school and county budget package for fiscal 2017, which started July 1. It was expected to increase the tax rate 41 cents, or 2.35 percent, from $17.40 to $17.81 per $1,000 of assessed property value.
Instead, when the city assessor’s office finalized the fiscal 2017 tax commitment Wednesday, the tax rate landed at $17.70, City Manager Jim Gailey said in an email to the council. That’s 1.7 percent higher than the fiscal 2016 tax rate.
Gailey said the tax rate was positively impacted by two things: The city’s $3.4 billion total valuation came in $10 million higher than expected, which lowered the tax rate by about 5 cents. Then the state’s business equipment tax exemption valuation and revenue reimbursement came in $206,000 higher than expected, which lowered the tax rate by about 6 cents.
“It also takes a staff that develops a budget based on needs, not wants,” Gailey said. “Then there’s the collaboration of the City Council and the School Board to approve a budget that moves the city forward without having a negative impact on taxpayers.”
As a result, the annual tax bill on a $300,000 property will increase $90 in fiscal 2017, from $5,220 to $5,310, Gailey said. With a tax rate of $17.81, the annual tax bill on that property would have increased $123 to $5,343.
However, homeowners who have applied for and receive the state’s Homestead Exemption will see a further reduction, resulting in property tax bills that are even lower than they were in fiscal 2016. The Legislature approved a $5,000 increase in the exemption, from $10,000 to $15,000, so the valuation of qualified properties will be reduced an additional $5,000 in fiscal 2017.
As a result, the annual tax bill on a $300,000 home will be $1.50 lower than it was in fiscal 2016, Gailey said. The exemption produces greater benefits for less expensive homes, so this year’s tax bill on a $250,000 home will be $16.50 lower than it was in fiscal 2016, and the tax bill on a $200,000 home will be $31.50 less than it was last year, and so on.
To qualify for a Homestead Exemption, a property must be the owner’s permanent and primary residence and it must be owned for at least twelve months prior to applying for the exemption. It’s a one-time application that must be filed with the city by April 1 of the first fiscal year it will apply. Once the exemption is approved, it will remain in effect as long as ownership status is unchanged.
Kelley Bouchard can be contacted at 791-6328 or at:
kbouchard@pressherald.com
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