Caribou approves lowest mill rate in a decade but some tax bills will still go up

9 months ago

CARIBOU, Maine — Caribou will see its lowest mill rate since 2012 but a recent assessment of resident properties means that some homeowners’ tax bills will increase.

Starting July 14, the city’s mill rate will decrease from $23.55 per $1,000 of property value to $18.55. That marks the biggest drop in Caribou’s mill rate since 2012. The mill rate was 19.30 that year and increased until 2020 when councilors began holding the rate steady at 23.55.

But 2012 was the same year that Caribou completed its most recent full tax revaluation, which caused the mill rate to decrease but some homes’ property values to increase. This year, a necessary market rate adjustment for Caribou homes will lower the tax rate again but have the opposite effect on homes deemed higher value, town officials said.

There is $514,624,700 in taxable real estate in Caribou compared with $343,685,799 in 2022, according to the city’s 2023 real estate tax assessment, conducted by Pittsfield-based assessor Joe Salley.

Of those properties, there is $49,908,600 that qualifies for the state’s Homestead Exemption program, $29,397,700 in exempt business equipment and $734,484 in exemptions for businesses located within Caribou’s Tax Increment Financing districts.

When state and local exemptions are taken out, the city projects $4,206,602 in property tax revenue compared with $3,615,900 last year.

City staff knew that a market rate adjustment for Caribou homes was needed when the state only allowed the city to certify properties at 95 percent, instead of the full 100 percent, in 2022. That caused some property tax bills to increase, even if property owners qualified for Homestead and other exemptions.

Adjustments to market rates allows homes to be taxed more equitably at or above the 100 percent certified ratio, Salley said.

From July 1, 2021, to June 30, 2022, Maine Revenue Services allowed Caribou to assess properties within 72 percent of what properties were selling for. That put the city in danger of going below the state’s threshold of 70 to 110 percent for property tax assessments, Salley said.

After Salley reexamined the conditions and selling prices of Caribou homes, the city was able to assess properties at 102 percent in 2023. This happened because the market rate adjustment brought homes’ values to a more equitable rate, Salley said.

“[The adjustment] would have needed to be done at some point,” Salley said. “It brings the city to a place where we can certify at 100 percent and reap the full benefits of state reimbursements.”

But Salley confirmed with councilors that the higher a home’s value increases, the higher that homeowner’s tax bill will become.

Councilors passed the 18.55 mill rate with a vote of 6-1 and set July 14 as the city’s tax commitment date and July 31 as the due date for tax bills.

Councilor Mark Goughan voted against the mill rate decrease. He argued that the market rate assessment would lead to higher burdens for many taxpayers with higher quality properties.

“You’re going to see some people upset because they have no intention of selling their homes,” Goughan said.

Without the market rate adjustment factored in, the city’s increased budget alone would have brought the mill rate up three mills, Goughan said. So even with the lower mill rate, residents are still footing the bill for city services, he said.

Councilors approved the $10.5 million budget in March, which was an increase from last year’s $10.4 million budget. The city will have a $1.4 million capital improvement budget, a decrease from last year’s $1.9 million.

Salley said that he is willing to speak with residents who have questions and concerns about their tax bills this year.

The next regular Caribou City Council meeting will be held at 6 p.m. Monday, July 24, at Caribou Municipal Building, 25 High St.