While the tax rate for both commercial and residential properties increased for this year, the amount that the average taxpayer would pay could be less than last year. This paradox is what the councilors and aldermen heard at the special joint meeting at which they unanimously voted to approve Mayor Carlo DeMaria’s Minimum Residential Factor last Wednesday night.
DeMaria and City Assessor William Hart presented the new tax rate for residential properties at $13.51 per thousand of assessed valuation and $37.02 per thousand rate for commercial assessed valuation.
DeMaria outlined this annual ritual with several facts at the joint meeting that showed not only how the tax rate was computed, but why taxing commercial buildings at 175% of the flat rate of $21.15 was necessary.
“I feel the pain for businesses,” DeMaria said. “Residents are struggling and to do less than 175% is not right.”
DeMaria gave the example that a two family home assessed for $287,000 would pay $4,728 in taxes with the commercial multiplier at 175% as opposed to the homeowner paying $5,481 if the commercial multiplier was at 160%.
DeMaria also noted that total valuation of the city dropped by almost $700M to $3.7 billion. This drop in value is why last year’s rate of $11.18 for residential and $28.98 for commercial will mean in actual dollars that the average taxpayer will pay less. Additionally, 5,400 taxpayers will be able to further reduce their tax bills with the approved tax break for owner occupied homes, lessening their assessed value by more than $50,000.
DeMaria also noted that the city has just $209,000 in free cash that meant the city did not need to have a 2 ½ override.
“This year was a perfect storm where both state aid and property values were down,” Hart said at the joint meeting.
State officials still have to approve the tax rate.