LINCOLN, Maine — The new tax rate is slightly lower than last year’s but taxpayers should expect to pay slightly more due to cuts in state funding and a decrease in the state Homestead Exemption, town officials said Friday.
Town Assessor Ruth Birtz set the fiscal year 2010-11 mill rate at 20.12, slightly lower than the 20.60 rate set during the 2009-10 fiscal year, which ended July 1.
“Considering all these things that came up — the state revenue cuts and changes in state tax law — the town of Lincoln can be very pleased with how fiscally responsible their Town Council and budget committee were,” Birtz said Friday.
“I was very pleased. Initially I thought the mill rate would come out much higher than it did, but we had so much building, and commercial building, that it helped a lot. I ended up with more value than I anticipated,” she added.
Birtz had expected that the new mill rate would be 20.40 mills, or $2,040 for every $100,000 of assessed property value.
Still, local taxpayers will pay more this year, Town Manager Lisa Goodwin said.
Though the new rate is 48 cents lower per $1,000 worth of valuation than the old, the state Department of Revenue increased valuations by 5 percent. State officials also decreased the state Homestead Exemption from $13,000 to $10,000 per home, a $60 increase per home, Goodwin said.
That means that many homeowners will likely see a tax increase even with the lowered mill rate, Goodwin said.
Also, state revenue sharing with the town has dropped dramatically over the last few years. In 2008, the town received $790,000.
This year, the town anticipates receiving $480,000, Birtz said.
“That’s a really significant cut,” she said.
The cut in state revenues forces town officials to find funding or limit spending to offset the loss and eats up any government cost savings or increase in town-generated revenue.
As an example of how the new tax rate and cuts in state funding would affect an average home, Goodwin said an average homeowner with a home valued at $100,000 last year paid, under last year’s mill rate of 20.60 and a homestead exemption of $13,000, about $1,792 in taxes, Goodwin said.
But that same home, now valued with the 5 percent increase, would be worth $110,000, and with a homestead exemption of $10,000 instead of $13,000, its owner would get a tax bill of $2,012 — an increase of about $220, Goodwin said.
Taxpayers might get some tax relief, Birtz said, from the increase in building permits town officials are seeing, if state revenues paid to the town increase. From January to July of this year, 242 building permits have been issued, compared to 162 last year over the same period.
The new or improved buildings “add new value to overall town valuation, and it’s that overall town valuation that gets divided into the budget requirements to figure the mill rate,” Birtz said. “But right now, all of this new value is actually just compensating for loss in revenues at the state level.”