Taxes for some Bath homeowners increased higher than usual this year after the city conducted a property valuation adjustment due to the sky-high residential real estate market.
Assessor Brenda Cummings said the city’s assessment-to-sale ratio was 77% this year, which would have meant a $600,000 reduction in the city’s tax reimbursement from the state under the Business Equipment Tax Exemption program. The city has about $210 million in exempt equipment, most of it at Bath Iron Works, and the reimbursement is adjusted based on the assessment-to-sale ratio, she said. It would have also meant reductions in the homestead and veterans exemptions, which are also based on the ratio. The $600,000 reduction would have required a 2.5% property tax hike on top of the 4% increase through the new city budget approved in June.
Instead, the city conducted a property valuation adjustment to align the ratio more with the current market.
“This update is ensuring the property values remain fair and equitable for all,” City Manager Marc Meyers said during a public forum on the adjustment Wednesday at City Hall.
Residential property increased to 50% of the city’s $1.5 billion taxable valuation, compared to 46% last year, since residential real estate values have outpaced commercial. That means property tax hikes of 10% or more for some homeowners.
“I know it’s difficult,” Cummings said. “Our goals are always first to ensure equity and fairness in the tax burden distribution among all of us.”
Cummings said her property taxes increased 11%.
“We’re caught in a rock and a hard place,” she said.
Some people said Wednesday the city should have sent out notices to property owners earlier this year to warn them of the adjustment. Many found out only when they were mailed notices over the last few days explaining the changes in their property taxes ahead of the Oct. 16 payment due date.
“It’s unfortunate and very bad timing,” said resident Pat Silva.
The city’s last property revaluation was in 2019. The process is typically conducted every 10 years, but with the rapid increase in home sale prices, many communities, including Brunswick, which last undertook a revaluation in 2017, launched them sooner. The Brunswick Town Council eventually voted to delay its revaluation last month after an outcry from some homeowners who were facing tax hikes of 50% or more.
Cummings said the new valuations of the city’s roughly 2,800 residential properties were based on factors including the 368 home sales from 2020 to 2023.
Resident Frederick Lancaster said he is OK with his property taxes increasing because of the market but called it a regressive form of taxation because some middle- and lower-class homeowners face a bigger burden.
“Property tax is not a fair way to raise funds for our city needs,” he said. “There must be another way.”
Cummings emphasized property taxes are the only way for Maine municipalities to raise money.
“There’s no other way to take the burden off property taxpayers, and the fact this is going to increasingly affect residential property owners more and more may be an impetus to change that,” she said.
Property owners have until Feb. 29 to appeal their new valuations through the Assessor’s Office. Cummings said there could be a 10% deviation in any given assessment.
“This is not a perfect science and markets are moving targets,” she said.
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