It’s been said there are two things that are certain in life, death and taxes. One other thing that death and taxes have in common is that both are something nobody looks forward to.
While death is something that can’t be controlled, people do have a measure of control over their taxes. And while no one is excited about having to pay taxes, the least a city or town can do is to make sure that no homeowner or business is taking on too much of the tax burden.
That’s why it’s important for Westbrook to do a citywide property revaluation. The city needs to take a look at all of its commercial and residential real estate and make sure taxes are distributed evenly among all taxpayers.
Maine law requires that a community’s total property value not fall below 70 percent of the established market value.
According to City Assessor Elizabeth Sawyer, the value Westbrook places on its total property is at about 60 percent of market value, well below the limit mandated by the state.
A revaluation is long overdue in Westbrook. The last time the city had a major revaluation was about 14 years ago, in 1992. In the 15 years that have followed, Westbrook has been undergoing a metamorphosis from a mill town to a booming suburb of Portland.
While the city has been doing whatever it can to attract new businesses to help broaden the tax base, residential development has been coming at a faster pace, with new homes sprouting up all over the city.
As a result, the newer homes in the city are valued at or near their actual market value, while older homes in the city, which likely have a market value close to that of the newer homes, are valued much lower. A revaluation, while painful for some homeowners, will help to close that tax gap.
“A revaluation is never a thing that somebody wants,” said City Councilor John O’Hara, and he’s right. For many people, a revaluation will mean their taxes will increase, sometimes dramatically. O’Hara himself said he expects his property taxes will nearly double after a revaluation.
But not every homeowner will see their taxes increase as a result of the revaluation, some will actually pay less after the revaluation. The general rule of thumb, according to Sawyer, is about one-third of properties will increase in value, about one-third will stay the same, and one-third will decrease.
This coming property revaluation will not be limited to residential property; the city will also be revaluing all commercial properties as well. Because residential property values in the greater Portland area have risen more sharply than commercial and industrial property values, it’s likely that the majority of Westbrook’s tax burden will shift from commercial to residential taxpayers.
And while it may be tempting for some homeowners to want to see businesses increased to lower residential property taxes, that is a shortsighted argument.
In the short term, placing more of the tax burden on businesses would certainly allow residential property taxes to be lowered, it wouldn’t last long. Maine’s business climate is highly competitive, and there are many cities and towns that would offer businesses tax incentives to relocate. And if too many businesses leave town, that means dramatically reduced services and higher tax bills for residents.
So, the absolute least a city like Westbrook can do is make sure that the businesses it already has don’t pay any more taxes than is absolutely necessary.
It’s understandable that anytime a city like Westbrook begins a revaluation, people are going to complain. After all, no one wants to see taxes go up.
But this revaluation isn’t about the city looking to raise more money to spend. It is about looking at the city’s overall tax base and making sure no taxpayer is paying more than they should.
And while that will certainly be painful for those who have to pay more taxes, it’s unavoidable.
Mike Higgins, assistant editor
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