The Biddeford City Council will hold a public hearing Thursday on a proposed $31.5 million city budget that would result in a property tax reduction for households that qualify for the Homestead Exemption.

The proposed budget is up more than $2.2 million, or about 7.7 percent, over the current year’s budget because of an increased allocation for capital projects and payments on voter-approved bonds for sewer and road work. Despite the increase, any home valued at $236,000 or less that qualifies for the Homestead Exemption would see the same or a lower tax bill, said City Manager Jim Bennett.

The Homestead Exemption increased from a maximum $15,000 reduction in taxable property value in 2016 to a maximum $20,000 reduction this year. The city’s median home valued at $211,000 would see a $19.85 decrease in the annual tax bill.

The budget would add 46 cents to the current mil rate of $19.86 per $1,000 of valuation. Of that increase, 37 cents is for voter-approved bonds for road repairs and combined sewer overflow projects.

The budget would eliminate 1.5 full-time positions that were already vacant, and city programs and services should be unaffected, Bennett said. The City Council has proposed increasing the capital projects budget by nearly $815,000 – up 116 percent – to more than $1.5 million. Bennett said that investment would save the city money in the future because it wouldn’t have to borrow money to pay for projects.

“It’s a pretty lean budget and it’s a pretty responsible budget,” he said.

The City Council has already approved a $35.6 million education budget. A school budget validation vote is set for June 13.

The public hearing on the municipal budget will begin at 6 p.m. Thursday in council chambers at City Hall. The City Council is expected to take its first vote on the budget after the public hearing.

Gillian Graham can be contacted at:

ggraham@pressherald.com