South Portland’s property tax rate will increase only 1.8 percent this fiscal year after the City Council on Monday unanimously approved budget adjustments using a “windfall” of additional state education aid.
City and school officials learned July 2 that South Portland will receive just over $6 million in state education aid – $884,000 more than the nearly $5.2 million estimate that local school officials used to build a 2015-16 budget that started July 1.
Since then, South Portland officials have revised municipal and school spending plans to account for more than $1 million in additional revenue, including an anticipated $270,000 increase in business equipment tax reimbursements.
The council agreed Monday to use $480,000 of the additional state aid to help reduce the fiscal 2016 tax rate by 33 cents, or nearly 2 percent, from $17.73 to $17.40 per $1,000 of assessed property value. The reduced rate is 30 cents, or 1.8 percent, higher than the fiscal 2015 tax rate of $17.10 per $1,000.
The first round of tax bills will be sent out as soon as they’re printed, said City Manager Jim Gailey.
Under the reduced rate, the annual tax bill on a $200,000 home will increase just $60 in fiscal 2016, from $3,420 to $3,480, rather than $126 if the tax rate remained at $17.73 and resulted in a $3,546 annual tax bill.
School officials plan to use the remaining $404,000 in additional state aid to boost reserve funds that would be used to buy new buses, replace computer laptops and tablets and maintain school buildings, Gailey said.
City Councilor Tom Blake praised city and school officials for using the “windfall” of additional state aid to help reduce the tax rate.
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