Bangor’s property tax rate will decrease but homeowners will pay more in taxes overall after the City Council voted to approve a new $117 million budget Monday night, a slight increase from last year’s budget of $111 million.
The city lowered its mill rate to $20.65 per $1,000 in assessed property value for the new fiscal year, which begins Friday, according to the budget proposal, which passed unanimously. That’s $1.65 less than the previous year’s mill rate of $22.30, which had also declined from fiscal year 2021’s mill rate of $23.20.
The city was able to lower the mill rate even further last year after initially passing its budget because of a late, $1.2 million infusion of state funds in July 2021 from a new state budget.
Councilor Dan Tremble acknowledged that property owners were under “tremendous pressure” as property values were at record highs in a hot real estate market, but said that they should only see a modest increase in their tax bills.
Residential property values have risen dramatically at the same time Maine faces a dearth of affordable and available housing for renters and first-time homebuyers.
Bangor’s total assessed property value across the city increased by 11.3 percent from the previous year, or $340 million, according to budget documents.
That coincided with a 40 percent increase in valuation for downtown Bangor in the past five years. The downtown area has seen more restaurants and bars open in that corridor, along with the development of high-end apartments that have brought more residents downtown.
As the downtown area has developed, it’s encountered a new set of challenges, such as an affordable housing crunch that’s made it more difficult for people of moderate means to live downtown as well the effects of growth in Bangor’s homeless population, which are felt acutely downtown.
The Downtown Bangor Partnership received an additional $47,000 from downtown tax subsidies after asking the city for more funds to address those problems, director Betsy Lundy said.
The city will have $62.7 million in total at its disposal, while the school department will have $53.2 million.
Bangor’s new fiscal year spending plan calls for increased funds to cover rising city and school department expenses, like increased salaries, debt service and operating costs.
A number of agencies, like the assessing, water quality and police departments, planned to use leftover money from the previous year to fund some initiatives, like upgrading police radio equipment, paying higher costs to dispose of biosolids from sewage treatment that the city can no longer have spread on farmland following a statewide ban on that practice, and future legal and appraising costs.
Tremble pointed out that the budget was Debbie Laurie’s first as city manager, after drafting them for years prior as the municipality’s longtime finance director.
“I think we’ve done a great job putting together a budget that provides the people of Bangor the type of municipal services they’ve come to expect,” he said.