This story has been updated.
MADAWASKA, Maine — Madawaska officials voted unanimously on Wednesday to set the mill rate to 23.25, an increase of 0.25 mills over last year’s rate.
Select Board members also approved higher real estate valuations, with increases ranging from 11% to 29% depending on how each category has changed in the market.
For a home valued at $150,000 in Madawaska, this would result in a total of $3,487.50 in annual property taxes, or a tax bill that is $37.50 higher than last year.
The new mill rate includes a $209,434.65 overlay for the town to use as a buffer for abatements and corrections.
Madawaska Town Manager David Daigle said the town will need to undergo a full revaluation soon, because this directly affects how much state reimbursement it will receive for municipal revenue sharing, local road assistance, state education aid and the homestead exemption for local taxpayers. In order to receive a full reimbursement from the state, the town ratio of assessed values and market values needs to be between 91% and 100%.
The town was at roughly 72%, Daigle said. The state has determined that its overall value should be $4.46 million, and it is currently valued at $3.94 million. Next year, the town must be valued at at least 91% of a projected market value of $5.14 million.
The town manager said this is not unique to Madawaska, and that about 65 other towns in Aroostook County are in a similar situation due to rapidly increasing property prices.
“Because recent market prices have risen much faster than past assessment increases, the Board needed to adjust property valuations to avoid losing significant state funding,” he said.
The board’s adjustments to property values brings the town’s certified ratio up to 94%, which means it will receive a full state reimbursement for the coming year.
Earlier this year, residents approved a $9.96 million municipal budget during Madawaska’s annual town meeting. This budget is up $910,137 over the previous year. Some of the major increases include an additional $254,385 for the town’s ambulance department, an additional $147,113 for the police department, and a new $132,209 budget line for community development.
The town’s share of Aroostook County taxes also increased by $161,753 this year.
Officials also found an additional $241,811 in anticipated revenues, resulting in an overall $836,657 deficit.
Last year’s mill rate of 23 represented a 2.4 reduction of the previous year’s 25.4 mill rate. This mill rate was set after former interim town manager Dan Foster helped create a budget that utilized surplus money that came when the town spent less than anticipated.
Looking ahead, Daigle said the town is also considering a full town-wide revaluation, which it has not had since 2012. This is estimated to cost between $600,000 and $800,000.
The project will rebalance assessed values across all neighborhoods and property types, ensure a fairer distribution of the tax burden, and reflect property values that change at different rates, he said. It may also result in a lower mill rate.
“Because real estate markets have changed dramatically in recent years, a full revaluation may eventually be the fairest long-term solution,” he said.
