Many South Portland residents will see their tax bills increase because of a citywide property revaluation, prompting the City Council to strengthen tax relief for seniors and find ways to avoid such a significant tax burden in the future.

“Just sitting here, my phone’s blowing up with people who are realizing that the new tax bills are out,” City Councilor Steve Riley said at the council’s Aug. 13 meeting. “I’m trying to come up with what I’m going to tell my constituents.”

Councilor Richard Matthews said he had received 17 calls ahead of the meeting.

“A gentleman reached out to me today; his taxes went up $3,094,” Matthews said, equating that roughly $258 monthly bill to a car payment. “At what point does the state do some type of review to prevent things like this from happening?”

Typically, assessments lead to about one-third of property owners’ taxes going up, one-third staying roughly the same, and one-third going down, said City Assessor Brent Martin at the meeting. This time, the majority of residents’ taxes will be going up.

Multiple factors

The skyrocketing housing market is mostly to blame for the increases, according to Martin. The state requires municipalities to perform revaluations periodically in order to qualify for certain state funding.

“Typically, what’s been done here is not unusual for South Portland,” Martin told the council during a presentation at last week’s meeting. “The magnitude this time has to do with the severity of the market conditions.”

To illustrate the impact, Martin said a single-family home on Blueberry Drive sold for $425,000 in 2019 when it was assessed at $467,500. In March 2023, it was sold for $720,000 and this year it was assessed at $650,000.

Meanwhile, a home on Ledgefield Circle sold for $500,000 in June 2021 when it was assessed at roughly $457,000. It was sold again in July 2023 for $640,000 and the home’s new assessed value is over $600,000.

A shift in the tax burden from commercial to residential because of the COVID-19 pandemic adds to the increase for homeowners, Martin said. In 2019, homeowners took on 60.3% of property taxes compared to this year’s revaluation, which increased the burden to 71.3%. That’s largely because, since the pandemic, residential property increases have outpaced commercial by 2% to 4% annually, he said.

In 2020, he said, “the city was going into a period where, because of COVID, there would be a reduction in valuation on commercial and industrial properties” and home prices were increasing.

At the end of the day, Martin said, the results of a revaluation boils down to math.

“It’s math,” he said. “It sounds insensitive, but it’s not insensitive. It’s math.”

Relief on the horizon?

City staff requested the council provide their opinion on increasing the city’s senior tax relief fund at the Aug. 13 meeting. The city had already allocated $100,000 for it in this year’s budget, but Assistant City Manager Josh Reny said an additional $50,000 would help with an anticipated increase in applicants.

“Our program locally, the target is $500 per household (maximum), if they’re eligible,” Reny said. “Last year, the average benefit was $258 because all of the money was fully allocated. If we had extra money, at least the people eligible could get the full benefit even if there is a surplus in the end.”

However, the council was in favor of a $100,000 increase instead.

“I don’t think $50,000 is going to take us very far,” Matthews said. “Put it at $100,000. If we don’t use it, it can go back into the fund balance.”

The council is poised to vote on the allocation at its meeting Sept. 3.

Martin also stressed that property owners are encouraged to reach out to the assessor’s office with questions, comments and concerns. It can also help in finding exemptions they qualify for.

“One of the first steps that goes along with the shock of a higher tax bill is to call us,” he said. “We want to make sure that we are right. We actually don’t mind being wrong … We have a long time to go over stuff and meet with people to talk things though.”

Future revaluations

At the meeting, councilors said they and the state need to work to ensure revaluations don’t cause such increases in the future.

Councilor Linda Cohen said the shift in residential taxes compared to commercial and industrial needs attention.

“For many, many years – decades even – South Portland was the envy of so many communities in this state because of our robust commercial real estate base and how much (tax burden) it took off of the homeowner,” Cohen said. “I would like to see where that has gone because maybe there’s something we need to be doing on that end as well.”

Mayor Misha Pride said that Massachusetts’ laws allow for different tax rates for residential and commercial properties.

“(Maine) can’t have a separate mill rate for commercial and residential,” Pride said. “We need to talk to our lawmakers at the state level because our assessor’s doing what he’s required to do under state law and it’s really unfortunate.”

Councilor Elyse Tipton said the region’s housing shortage is a major catalyst of property values increasing, and they need to keep that in mind moving forward.

“We don’t have enough housing. It’s competitive, and that’s what’s driven up these prices up to a mind-boggling degree,” Tipton said. “I think that when our council talks about housing proposals and density increases … keeping in mind that we need more housing is pretty critical.”

The assessor’s presentation, and FAQ page and other information on the revaluation can be found at the city’s website, southportland.org.

The assessor’s office can be reached at 207-767-7604.