Despite Dramatic Drop in Mill Rate, Taxes Still Going Up

At the City Council’s meeting on Tuesday, August 2, 2022, City Manager Steven Buck presented some brand new information on the Budget and Tax Commitment for 2022-23. The School and Municipal appropriations were already finalized months ago, but some of the other items that affect our property tax bills, including total valuation of property in the City, and certain tax reimbursements the City receives from the state of Maine, had to be adjusted with the final figures.

The biggest change is to the net municipal valuation, which is the value of all taxable property in the City. While a figure of over $2.384 billion was projected at the time the budget was approved, the actual valuation is over $2.396 billion, an increase of almost $11.9 million over what was projected when the budget was finalized in May.

Among revisions to the budget, County tax, which had been held steady in the budget over the previous year, has increased by $41 thousand. The amount the City receives through TIF districts is down over $61 thousand, due to a district that has matured. (This may sound like a bad thing, but maturity means the City will receive full property tax revenue from the property going forward.) Homestead and BETE reimbursements from the state are down by a combined $47 thousand. These items are reduced when the mill rate goes down.

The increased valuation and revised budget mean that the municipal overlay, which may be set at up to 5% of the tax commitment, is now being set at over $226 thousand, which is $25 thousand less than anticipated. The overlay is allowed by state law to provide a buffer to the budget.

The Council voted unanimously to set the overlay as recommended to complete the Tax Commitment for this year. Tax bills can now be printed and mailed.

Mill Rate Set

The bottom line for Sanford and Springvale taxpayers is that the mill rate has been set at .01484, or $14.84 per thousand dollars of valuation. This is 8 cents per thousand less than projected back in May when the budget was adopted. Last year the mill rate was $18.18 per thousand, and the year before it was $20.16. The assessed value of a home (or other property) is multiplied by the mill rate to determine the property tax bill.

Although the mill rate has dropped significantly since last year, property values have continued to skyrocket.

How the Average Single-Family Property Tax Bill Will Change Over Last Year

• For homes with an assessed value of less than $100K, tax bills will decrease by an average of $46.82. There are 62 homes in this category.
• Properties valued between $100K and $125K will see an average increase of $64.64. There are 167 homes in this category.
• Homes valued between $125K and $150K will have an average increase in property taxes of $105.61. There are 452 homes in this category.
• Homeowners whose homes are valued between $150K and $175K, of which there are 984 in our community, will see an average increase of $107.14 in their property tax bills this year.
• For a single-family home with an assessed value of between $175K and $200K, property taxes for the year will increase by an average of $114.08. 1,124 homes in Sanford fall into this category.
• For home assessed between $200K and $225K, tax bills will rise by an average of $129.26. There are 840 homes in this category.
• Homeowners whose properties are valued between $225K to $250K will see an average increase of $159.62. This category includes 552 homes.
• Homes in the category of $250K to $275K valuation will see an increase of $172.03. This includes 375 homes in Sanford and Springvale.
• For homes assessed between $275K to $300K, expect an average increase of $212.19.  251 homes fall into this category.
• Homes valued between $300K to $350K will have an average increase of $249.04 in their tax bills. There are 332 homes in this range in our community.
• For homes assessed at $350K and up, there will be an average increase of $354.66. 314 homes in Sanford and Springvale are in this category.

It should be noted that as property values have increased, every category has shifted upward. Last year, the largest category of homes was in the $150-$175K range. Most of these homes are now in the $175-$200K range.

This list is for single-family homes only, the information on multi-family and commercial property was not included in the discussion.

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