How municipalities notify residents about proposed property tax increases

Municipal councils that want to raise property tax revenue above the previous year must follow a public notification and hearing process called "truth in taxation," a presenter explained. The process is designed to inform residents how much a proposed increase would cost the average homeowner and how the extra revenue would be spent.

The presenter said the process typically begins with a public hearing in the spring, when the council shares the proposed tax increase, an estimate of the cost to an average homeowner and a department-by-department explanation of spending plans. That information, the presenter added, is usually posted on the municipality's website and is available at town hall.

Councils must also adopt an interim budget and a separate property tax increase schedule by June 30. The schedule is meant to show, in detail, how the proposed increase would be allocated across departments if the council ultimately approves it.

Because the fiscal year begins July 1, but a tax increase cannot be formally approved until after the public meeting in August, the presenter said there is a procedural gap between the start of the fiscal year and final tax approval. To address this, money equivalent to the proposed increase is held in a separate account until residents have had the chance to comment and the council has voted on whether to raise property tax revenue.

Residents are encouraged to start asking questions during the spring outreach period and to speak at the public hearing in August if they want to weigh in on the proposed change. The council's next procedural step is the August public meeting, when formal consideration of the increase will occur.