Homeowners are set to shoulder more of Bangor’s property tax burden in the next budget year after a year of declining business and a soaring housing market, according to Bangor’s city assessor.
Many of Bangor’s major commercial properties, including the Bangor Mall, Hollywood Casino and numerous hotels, will see their property values drop in the 2022 fiscal year, which starts July 1, Bangor Assessor Phil Drew said in a memo last week.
Retail, hospitality and gaming properties in the city have declined by $30 million in value in the past year, while residential properties saw a $70 million aggregate increase in their value, according to Drew.
“The residential segment is really picking up a larger share of the tax because that property class is increasing in value at a faster rate,” Drew said in a City Council budget workshop meeting on Wednesday.
Residential properties now account for 53 percent of the city’s aggregate property value, according to Drew, up from 51 percent last year.
That shift will likely mean higher tax bills for Bangor homeowners but also a tax cut for businesses, which have traditionally paid most property taxes in Bangor, a regional service and business center. While the local economy has begun to recover with rising vaccination rates, a number of sectors, especially the hospitality industry, have not yet returned to their pre-pandemic revenues.
Experts told the Bangor Daily News in February that Bangor was likely to see its tax burden shift from commercial to residential properties as retailers, restaurants, hotels and other businesses struggled during the COVID-19 pandemic. Lower revenues were expected to translate into lower property values and, as a result, taxes. Drew’s memo outlined exactly how pronounced that shift will be for the upcoming budget year.
Restaurant and hospitality industry revenue in the Bangor economic summary area was 40 percent lower between April 2020 and March 2021 compared with a year earlier, according to data from the Maine Department of Administrative and Financial Services. The Bangor economic summary area includes Bangor, Brewer, Old Town, Orono and Veazie.
Other entities that generate revenue for the city have also seen steep losses throughout the pandemic, including Hollywood Casino, which had to shut its doors for all of spring 2020, and Bangor International Airport, which saw passenger numbers fall 70 percent in the first eight months of the pandemic from the previous year.
On the residential side, Drew noted that sellers had recently renovated many of the homes that have sold, adding to their value and sales price. That trend has long been noted by many nationwide since the pandemic hit the U.S. in March 2020.
The median sales price of homes sold in Penobscot County was $173,00 in March, nearly 20 percent higher than in March 2020, according to data from the Maine Real Estate Information System.
The city will release individual property valuations for the new fiscal year in July, Drew said in March.