BANGOR, Maine — Bangor’s property tax rate is likely to go up, but some of the city’s homeowners won’t be seeing a higher tax bill.
Bangor city councilors are scheduled to vote Monday on a $95.4 million proposed budget for fiscal year 2017. That includes $50.9 million in city expenditures, as well as the $44.5 million school budget approved by voters at the polls earlier this month.
If approved, the budget would bump up the city’s tax rate 55 cents from $21.95 per thousand dollars of valuation to $22.50 per thousand dollars of valuation. That represents a 2.5 percent increase.
An increase in the state’s homestead exemption program, which provides a reduction in the value of your home for tax purposes if you’ve owned it more than a year, means not everyone’s tax bills will be going up. That exemption is increasing from $10,000 to $15,000.
Debbie Cyr, the city’s finance director, said that for a home valued at $150,000, the homeowner’s bill next tax season will be $35 less than it was the previous year. The savings will be larger for homes with smaller valuations. The tax payment will increase for homes valued at or above $200,000.
However, that exemption increase also causes the city to lose $23.8 million in taxable value, partly contributing to the increase in the mill rate.
One of the biggest factors playing into this year’s tax rate increase was a $7.4 million decline in the city’s total assessed value. New taxable construction projects in the city failed to offset a $29 million reduction in value stemming from a pair of tax abatement deals the city reached this year.
In May, Hollywood Casino and the city settled a lengthy dispute over the value of the gaming and hotel property. Earlier in the year, General Electric, which runs a factory on Griffin Road, also received an abatement.
“It could have been worse,” City Manager Cathy Conlow said of this year’s budget situation. Low oil prices and smaller-than-expected increases in health insurance rates softened the blow, she said.
Bangor officials say the state and federal governments are shifting costs onto municipalities, driving tax rates up and forcing cities to try to raise enough revenue to fund those services. Conlow said Bangor has lost about $3 million in state funding for municipal operations since 2012. During that same time frame, Bangor has eliminated about 50 positions and cut back services in hopes of reducing the burden on taxpayers, Conlow said.
Monday’s meeting is scheduled for 7:30 p.m. on the Third Floor of Bangor City Hall.
Follow Nick McCrea on Twitter at @nmccrea213.