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Lowell City Council sets FY26 minimum residential factor; CFO outlines tax-rate shift and new-growth contributors
Summary
Council voted to adopt the minimum residential factor for FY26, a routine Proposition 2½ requirement that shifts tax burden away from residential property; CFO Baldwin explained the calculation, cited significant new growth (227 new apartments) and estimated a phased-in tax-rate impact equating to roughly a 1.6 percentage-point levy addition tied to the high school debt.
The Lowell City Council voted Dec. 2 to adopt the Minimum Residential Factor (MRF) for fiscal year 2026, a required annual action under Proposition 2½ that determines whether the city uses a split tax rate and how much tax burden may be shifted off residential property.
CFO Baldwin described the mechanics: Lowell maintains a split rate with separate residential and commercial (CIP) rates. The administration recommended shifting the maximum allowable amount away from residential taxpayers, a practice the city has followed since Proposition 2½ took effect. Baldwin explained that all multifamily units are taxed at the residential rate and outlined categories taxed at the commercial/industrial/personal property rates.
Baldwin and the assessor reported meaningful new growth this year — six multifamily complexes accounting for about 227 new apartments plus expansions and tenant fit-ups such as the Markley Data Center — which reduces pressure on residential tax bills. Baldwin said the combined effect of the adopted MRF and new growth will help mitigate the immediate burden on residential taxpayers.
Councilors asked for clarification on new-growth accounting and unit definitions; Baldwin said new parcels and additions to existing parcels (for example, building a porch) count as new growth and that the chief assessor prepared the detailed figures. Baldwin estimated the additional high-school related debt service will phase into the levy over three years and equates to roughly 1.6 percentage points per year as the debt is issued.
