There are several pieces of information to be shared with the citizens of Presque Isle concerning the upcoming tax billing and the effect that updated property valuations will have on the tax bills generated for 2024.
As has been well documented, property sale prices statewide have been increasing at higher-than-normal levels, and for a sustained period. This continued increase in the prices land and buildings sell at causes the need for our assessments to be adjusted to keep pace with the open market sales activity.
Within the assessing department, our main responsibilities are to equitably maintain our assessment values in accordance with state law, this law calls for the difference between actual sales prices and our assessed values to be no greater than 30 percent less than the average sale price, and no greater than 10 percent higher than the average sale price. These standards are established in Maine Statutes, Title 36 M.R.S.A. § 327.
In addition to these standards, Maine Revenue is required by law to reimburse the city for any losses in revenue when exemptions are placed on properties due to legislative action (Title 36 M.R.S.A. § 661). However, if the differential between the municipal valuations and the full market valuations is less than 91 percent, the reimbursement payments to the city are reduced by the same ratio, or percentage.
For 2024, the City of Presque Isle is due over $922,000 in reimbursement on the Business Equipment Tax Exemption. With no changes to our assessment values, that reimbursement is reduced to $792,920, a loss of city revenue of $129,080. The loss in reimbursement for the Homestead Exemption would be just over $100,000, and the loss in Tree Growth reimbursements would be $900. Combined, these losses of revenue are $230,000; the equivalent of the tax on 40 $250,000 properties.
Additionally, the 1,900 taxpayers in the city who qualify for the homestead exemption would see the $25,000 exemption reduced to $21,500, which would increase each tax bill by $79. This amount equals $150,100 in tax dollars that are unnecessary.
The City’s 2024 certified current ratio, established by Maine Revenue Services using standard practices for 2024 came in at 86 percent. We have amended our valuations on land and buildings ahead of the upcoming commitment to correct this ratio back to 96 percent. We anticipate the 2024 mill rate, once finalized, will be lower than the 2023 mill rate of $22.60 per thousand of value, but do not expect the mill rate decrease to totally offset the increase in valuations. We do anticipate the 2024 tax bills will be higher than the 2023 bills.
Discussions have occurred between the city council, city manager, finance director, and city assessor. We are all highly convinced that the most financially sound management practice for city resources and taxpayers is to maintain the certified ratio within the acceptable range as has been done for the past several years. The only alternative is to allow that ratio to continually slide backwards and then do a full revaluation at a future date, while losing hundreds of thousands of dollars of revenue between now and then.
We do ask for your support and understanding as this process continues. It is the housing market that drives these valuations, and that market is not something we can control.
As always, the assessing department is available to discuss assessment and valuation concerns that taxpayers may have.
Lewis Cousins is Presque Isle’s assessor. He can be reached at 760-2714 or via email at lcousins@presqueisleme.us.
