The new Augusta Police Department headquarters on Willow Street during construction in January. Joe Phelan/Kennebec Journal file

AUGUSTA — The proposed $87.7 million Augusta budget would result in a 0.8% tax decrease for property owners, despite increases in city, school and county spending, according to officials.

The tax decrease is possible, officials said, due to a projected $23 million increase in the city’s overall property tax valuation.

As proposed by outgoing City Manager Susan Robertson, the budget would mean the owner of an average-valued $131,704 residential property in Augusta would receive a property tax bill of $3,023.74, a decrease of $24.95.

City spending in the budget proposed by Robertson is up $7.6 million, or 9.5%, from current spending.

Augusta’s share of the Kennebec County budget is up by $871,000, or 40.6%, and the $38 million school budget is up 6.7%, requiring an additional $1.5 million from Augusta taxpayers. Taxpayers fund the city’s schools and Augusta’s share of the county budget through their property taxes, with the funds passed on from the city.

Through the use of the fund balance and a more than $23 million increase in the city’s overall property valuation, property owners would see a 0.8% tax decrease, if the proposed budget is approved by the Augusta City Council. The decrease would follow two straight years of property tax increases in Augusta.

“The impact of the increase in the city’s tax levy is mitigated by the significant increase in the city’s property value,” Robertson wrote in her budget memorandum to city councilors. “This large increase in value results in an overall tax decrease from $22.96 to $22.77 per thousand dollars of taxable property valuation, a decrease of 0.8%.

“A tax rate decrease of 0.8% is considerable, given the city has experienced significant tax increases the past two years.”

Jared Mills, the incoming city manager, said that for now, the city’s increased total property valuation is an estimate, because more up-to-date values are not expected until July, by when the budget will likely have been approved by councilors. Last year, Mills said, the actual valuation was more than what had been projected or budgeted.

The city’s property valuation increases when there is new development, increasing the total amount of taxable property value and, thus, spreading out the tax burden. Mills said the city is seeing more development, specifically in housing.

The proposed spending plan also would rely on taking $4 million from the city’s fund balance, an account made up of funds unspent in previous years. Such accounts are generally maintained as surplus funds reserved for unanticipated expenses that might come up during the coming budget year.

Robertson said taking $4 million from fund balance would leave $8.27 million in the account. That is 10.33% of the budget, meeting both a city charter requirement that at least 5% of the budget be maintained in the fund balance, and a recommended fund balance of at least 8.33% of the total budget.

Robertson said city spending in the budget is up $7.6 million, or 9.5%, for several reasons, including increased staffing needs.

“Like last year, I am unable to present a maintenance budget since we are still seeing unmet needs that cannot be ignored if we want to continue to provide the level of service the public has grown accustomed to,” Robertson said. “This budget addresses a number of those needs, but there are still positions that are going unfilled due to fiscal restraints, but the hope is these needs can be addressed in future budgets.”

Proposed additions to the budget include: Increased debt payments of $474,000, primarily due to the new police station; a $200,000 increase in street paving; $179,000 for increased water rates primarily in fire hydrant rental fees paid to Greater Augusta Utility District; $160,000 more for the Human Resources Bureau, primarily due to the reestablishment of a human resources director position; $144,000 for the Lithgow Public Library, where a deputy director position, eliminated during cutbacks during the COVID-19 pandemic, would be restored; $125,000 to purchase body cameras for the Police Department; and $58,000 for the net cost of adding a second deputy chief to the Fire Department.

The City Council is expected to conduct close reviews of the proposed budget, with a final vote tentatively set for May 16.

A series of budget review workshops, which are open to the public, are planned. They are scheduled to begin Tuesday, with reviews of the School Department and Police Department budgets, and include public hearings planned as part of City Council business meetings this Thursday and May 2.