Beginning next year, the owner of a $200,000 home in Blaine will pay about $12 more in property taxes to the city, breaking a three-year stretch of no property tax increases.
Blaine City Council voted 7-0 to approve a 2 percent property tax increase at its November 28 meeting. The additional taxes will bring in $18,841 more to the city’s general fund next year, Blaine finance director Jeff Lazenby said.
The new tax rate is estimated to be $1.23 per $1,000 of a home’s assessed value, up from $1.17 if assessed values hold constant. The increase will go into effect in January 2012, and Blaine residents will see it on their first tax bill in March or April, Lazenby said.
Most of the city council’s discussions in budget work sessions before the November 28 meeting centered around choosing the right level to raise the property tax, Lazenby said. Council members wanted to avoid waiting so long to increase taxes that they would be forced to raise the tax much higher all at once later.
The 2 percent increase was designed partially to take into account predicted drops in local assessed valuations, Lazenby explained. The city is expecting the value of properties in Blaine to drop approximately 3.5 percent in the coming year, which would mean the owner of $200,000 home would pay an additional $4 in Blaine property taxes in 2012. If property values remain stable, the increase would be about $12 for a $200,000 home; the $200,000 homeowner who paid about $234 in property taxes to the city in 2011 will pay approximately $246 in 2012.
The city received $942,068 in property taxes in 2011 and expects to bring in approximately $960,000 in 2012. The mill rate is determined once the total valution is known. The total amount collected (i.e. $960,000) remains constant; however, the mill rate may vary depending on changes in valuations.
State law bars cities from raising property taxes more than 1 percent per year, but the city of Blaine has what’s called “banked capacity” because city officials have not raised property taxes for three years. Because of this banked capacity, city council could have voted to raise property taxes up to 4 percent for 2012, Lazenby explained. The city still has 2 percent in banked capacity that will roll over to the next fiscal year.