Before we discuss property taxes, let’s all get on the same page about how the town receives and spends money.
The town or Yarmouth has an annual budget of roughly $46 million, which goes to 3 major expenses: $31 million for schools, $14 million for municipal services, and $1 million to Cumberland County. The School Committee creates the school budget and Cumberland County sets their budget (the town has no say about the amount of the county tax). The Town Council creates the municipal budget and must approve a school budget total; the Council cannot dictate individual line items of the school budget.
Town revenue comes from 3 major sources: school revenue, municipal revenue, and property taxes. School revenue is about $7 million and comes primarily from state aid to education. Municipal revenue is about $6 million and comes from a long list of fees and other sources. The largest components of municipal revenue are excise taxes (~ $2 million), state revenue sharing (~ $1 million), reimbursements from the state (~ $1 million), and sewer fees (~ $750K). So school and municipal revenue pay for about $13 million of the budget. The remaining $33 million has to be funded by property taxes.
The property tax rate (often called the mil rate) is calculated by dividing the amount of property tax required and dividing it by the total assessed value of all the property in town (the tax base). Yarmouth’s tax base is about $1.6 Billion. So divide $33 million by $1.6 billion and you get a mil rate of about 0.020 or 20/1000ths. Your property tax is about $20 for every $1000 dollars of the assessed value of your property.
The town has limited tools at their disposal to reduce property taxes. The town can:
Reduce the budget. This means cutting the number or quality of services. Each budget line item deserves scrutiny and cuts should be made where they can be made. It has been my experience that the Town Council, School Committee, and Town Staff work diligently to make responsible budgets and spend taxpayer money wisely and efficiently.
Raise other revenues. For example, the town introduced a sewer fee a few years ago. Now, sewer users pay a fee, which offsets some property taxes. If your property is not connected to the sewer, you come out ahead financially. If you are connected to the sewer you pay a fee, which is probably more than any reduction you receive in your property tax bill from the additional revenue the town receives from sewer fees. I see value in user fees when they encourage responsible behaviors (i.e. recycling, reduced water usage, etc.)
Targeted tax rebates. This is where I’ve focused my efforts. When I was on the Town Council, I created the STAY program (Senior Tax Assistance for Yarmouth), which has reimbursed hundreds of thousands of dollars to low and moderate income seniors. It took two attempts to get the program enacted and since then it has become a popular program and has been expanded twice. Tax fairness measures, like STAY, enable the town to provide high quality services and excellent education while protecting those who are most economically vulnerable.