Bangor property owners are likely to see a small decrease in their taxes thanks to an influx of state money, city officials said.
Maine’s newly passed state budget will provide the city of Bangor an additional $1.2 million in revenue sharing in the fiscal year, allowing it to lower the city’s mill rate, City Manager Cathy Conlow said Monday. More money will be sent by the state to Bangor schools and further decrease homeowners’ tax burden, though that amount has not been decided.
Bangor has long relied on property taxes from businesses for its tax base, including a hotel and restaurant industry that brought in more than $300 million in 2019, according to Maine’s Department of Administrative and Financial Services.
But in a situation predicted by experts long before the fiscal year 2022 budget process, revenue declines during the COVID-19 pandemic drove a drop in value for commercial properties.
That decline, combined with a housing boom increasing the costs of homes across the city, means residential properties now account for 53 percent of the city’s aggregate property value, up from 51 percent last year.
A budget approved by the city council on June 28 dropped the mill rate from $23.20 for every $1,000 in assessed property values to $22.90. The new mill rate will be $22.50 or less, depending on how much school funding will go toward tax relief, Conlow said.
The city is awaiting a final plan by the school committee regarding the new funding, Conlow said. At least some of those funds will be used to further decrease the mill rate.
The school committee will debate sending the city a portion of its $1.66 million in new state funding in a meeting on July 21, chair Carin Sychterz said.
The drop in the city’s mill rate means that a family owned an average Bangor home worth about $175,000 could see their tax burden drop from $4,060 in the previous fiscal year to $3,937.50 at most — it would likely be less depending on the school committee’s money going to the city.
Asked if the shift was likely to help commercial taxpayers, Conlow noted that because Bangor has such a large commercial property tax base, few other municipalities in Maine are seeing such a shift. However, she said the drop in the mill rate would benefit all taxpayers, residential and otherwise.