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Newport proposes 3.95% tax levy increase; expands two‑tier residential exemption
Summary
Finance staff proposed a fiscal 2026 tax levy increase of 3.95% and described how the city’s third year of a two‑tier residential tax program and a higher owner‑occupied exemption affect average bills and rates.
Finance Director Jim Nolan told the Newport City Council that the administration is proposing a 3.95% increase to the city’s fiscal year 2026 tax levy, raising the levy from $88.9 million in fiscal 2025 to a proposed $92.4 million.
The proposal would be the first year the city’s tax bills are generated through a new tax‑billing module in the city’s ERP system, Nolan said, and staff asked the council to approve tax rates promptly so early July mailings can be produced and the first quarter payment due date of Aug. 5 remains practical.
The tax proposal is tied to Newport’s two‑tier residential program, which separates owner‑occupied and non‑owner‑occupied residential properties for rate setting. Nolan said the owner‑occupied exemption for fiscal 2026 would remain at $284,433—24% of the average assessed residential value—consistent with fiscal 2025. He described participation growing from 36% in the first year (2,996 properties) to 51% in the current application cycle (4,169 properties).
Under the proposal, staff calculated residential rates by first determining the levy need, then exempting the owner‑occupied pool and applying a compensating rate to non‑owner‑occupied residential parcels. Nolan summarized the proposed per‑class rate moves: owner‑occupied residential would rise by about $0.31 (from roughly $6.97–$6.98 to $7.28), the non‑owner‑occupied residential rate would rise by about $0.64 (to roughly $8.86), and the commercial rate (set at 1.5 times the lowest residential rate) would increase to roughly $10.93. The tangible personal property rate remains fixed by the General Assembly at $14.88 per $1,000 of assessed value, Nolan said.
Staff presented the estimated impact on an average assessed residential property: a projected tax bill of roughly $6,561 in fiscal 2026, about $279 more than the prior year. Nolan noted that owner‑occupied taxpayers have seen net decreases or flat bills since the program began (a roughly $878 decrease in the first year, followed by a flat 2025), but the 2026 levy increase would raise the average owner‑occupied bill.
Councilors and staff also discussed the assessment and revaluation cycle. Nolan said the city must conduct either a statistical or full revaluation every three years; a statistical revaluation is scheduled in 2026 to capture market changes that will affect average assessed values and exemptions.
Why it matters: the tax‑levy and two‑tier design affect who bears the levy change and the relative tax rates for owner‑occupants, investors and businesses. Staff emphasized timeline constraints tied to a new ERP tax‑billing rollout and the need for rates to be set in time for printer deadlines and taxpayer payment schedules.
Staff noted the first public budget hearing would be at the council meeting on Wednesday, May 14, with additional hearings on May 28 and (if needed) June 11.
