BANGOR, Maine — City councilors backed a $95.4 million budget for the coming fiscal year during a meeting Monday night.
The budget, which aims to raise $57.7 million in taxes, will increase the tax rate in Bangor from $21.95 to $22.50, a 2.5 percent increase. Councilors approved it in a 7-1 vote.
It’s important to note that, in spite of the tax rate bump, many Bangor residents likely won’t see an increase in their property tax bill.
The state’s homestead exemption, which provides a reduction in the value of your home for tax purposes if you’ve owned it more than a year, 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.
One of the main contributing factors to the tax rate hike was a decrease in the city’s overall assessment. The city saw a $7.4 million reduction in its 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.
In addition, the city will lose about $23.8 million in taxable value on homes when the homestead exemption hike takes effect. 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.
Councilor David Nealley cast the lone dissenting vote but said it was more of a “protest” against state and federal policies than a statement against the efforts of city staff to craft a responsible budget.
Nealley said the state and federal governments have been shifting costs to municipalities while cutting their funding in recent years — a frequent concern raised by municipal leaders in Bangor around budget season. He cited the continued loss of revenue sharing funds reimbursed to Bangor and the transfer of General Assistance costs and responsibilities to the municipal level.
“The state and federal mandates and lack of reimbursements are the No. 1 driving forces in driving up property taxes in the state of Maine,” he said.
The budget 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.
Follow Nick McCrea on Twitter at @nmccrea213.