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New state tax law could shrink Centerville's property‑tax base, presenter warns
Summary
A presenter warned that recent state legislation will phase in larger homestead and 2% property deductions and change local income tax shares, likely reducing Centerville's taxable value and creating a multi‑year budgeting shortfall unless the county adopts new tax options or the town pursues alternatives.
A presenter to the Centerville Town Council outlined changes from recent state legislation that the presenter said will reduce the town's taxable property base and complicate budgeting for 2026 and later years. The presentation described phased increases in supplemental homestead deductions and new deductions for certain property classes, along with changes to business personal property exemptions.
The presenter (identified in the record as "Presenter") said the supplemental homestead deduction will phase up to 66.7%, meaning homeowners would effectively be taxed on about one‑third of their home's assessed value by 2031. The presenter also described new credits for so‑called "2% properties" (agricultural land, long‑term care facilities and residential rentals) that would phase in to reduce taxable value for those classes by up to 33% by 2031.
Why it matters: the presenter said those reductions, together with circuit‑breaker credits and a statutory growth cap the legislature has applied in some years, will lower collectible property tax revenue. The presenter noted the town's 2025 taxable value shown in the packet (stated as $82,000,500) and said the town is already experiencing a revenue loss the presenter quantified as about $277,000, with an additional reduction of roughly $46,000 expected. The presenter said staff would produce fund‑level revenue estimates "within a week or so." The presenter cautioned that some transcription excerpts of aggregate figures in the presentation appeared inconsistent and that staff estimates will provide precise numbers.
Council members pressed on next steps. One council participant (recorded as "Committee member") objected to the process and said the changes "take away local control," and several speakers discussed coordinated outreach. The presenter urged Centerville officials to petition the county council by July 1, 2027, if the town wants to seek a share of any new county income‑tax options the statute allows; the presenter framed petitioning the county as one route to mitigate losses if the county adopts a tax that shares revenue with small municipalities.
The presenter also highlighted transportation‑funding changes in the law that could allow a larger portion of motor‑vehicle/gas tax receipts to be treated as nonrestricted if the town meets pavement‑quality criteria (average pavement rating at least 6 and no more than 15% in failed condition). The presenter recommended the council evaluate short‑, medium‑ and long‑term measures — from operational efficiencies to revenue options — and invited the council to a countywide education session that local officials planned to host.
The council asked staff and the presenter to provide detailed revenue and budget projections; the presenter said those numbers will be provided soon so the council can plan for potential cuts, service adjustments or alternate revenue measures.
The council did not take any final tax votes at the session; the presenter said further analysis and coordinated outreach with county officials are the next steps.
