NEWPORT – Tax rate cuts and school funding shortfalls are just some of the topics of conversation currently underway at City Hall as city officials work to make this happen. finalize its budget for the 2025 financial year.
Newport produces an annual budget each year to manage money coming in and spending going out of City Hall. It also produces a biennial budget every two years. The council is currently holding workshops to better understand the city government’s FY25 budget proposal. They will then hold three separate public hearings on the budget, scheduled for May 8, May 22 and June 12. The final hearing will also include a vote on whether to adopt the budget.
Here’s a look at five key takeaways this year’s budget proposal:
1. Tax rates are falling to account for skyrocketing property values
The City proposed a 3.4% increase in General Fund revenue. This is a smaller increase than the one proposed a year ago, which resulted in a 6.11% increase in revenue. About 77% of the general fund is financed by property taxes. The city sets property tax rates each budget cycle and applies them to the total assessed value of properties throughout the city to determine what the tax levy will be, the total amount of property taxes the city will collect.
This year, Newport homeowners received news of massive increases in their property values thanks to the latest citywide property assessment. The value of the average home has increased by more than 50% in just three years, causing many people to panic about the impact this could have on their tax bills.
With the total value of all residential properties in Newport increasing from $5.9 billion to $8.57 billion, the city could not maintain its current tax rate without increasing the total tax levy by more than 4 percent. which is against state law. Instead, the city is proposing a lower tax rate: $6.98 per mile for owner-occupied housing. residential properties, $8.22 per mile for non-owner occupied properties residential properties and $10.46 per thousand for commercial properties.
With these new rates, the total tax collection increases by $3.4 million, an increase of just under 4%.
This is also the second fiscal year that uses the city’s new two-tiered tax system, which reduces rates for residential properties occupied by Newport residents. This year, owner-occupied properties have a tax rate 24% lower than non-owner-occupied properties. Last year it was only 15%.
2. School department faces $2.6 million budget shortfall
The city of Newport’s contribution to the school department’s budget represents approximately 60 percent of the total funds for the city’s public schools. This year, the city is proposing to increase the amount it grants the school by 2% for a total of $28.38 million. This suggested appropriation is $276,737 less than what the school department proposed in its own proposed budget.
The school department had hoped that…
