BREWER – The local tax rate is going down to its lowest level in at least 46 years, even with increases to city, school and county budgets, city officials announced.

“It’s an exciting day for Brewer,” Finance Director Karen Fussell said Friday. “We have a mill rate that’s going below $19. It’s a $1.16 decrease in the mill rate.

“Historic records [indicate] Brewer has never been below $19,” she said.

The city’s preliminary budget reduces the current tax rate from $20.06 to $18.90 per $1,000 of assessed property value.

Not all homeowners will see a drop in their tax bills, however. Homeowners whose property was revalued last year will see lower tax bills, but those with homes revalued this year will see an average 3 percent increase.

The $27.4 million consolidated municipal budget for 2006-07 will be presented for approval at a 5:30 p.m. June 27 City Council meeting at City Hall. Residents may ask questions during the budget hearing. The budget must be completed by month’s end.

The preliminary municipal budget is $10,950,175, an increase of $648,819 or 6.3 percent. The school department budget is $15,793,804, an increase of $605,047 or nearly 4 percent. The Penobscot County assessment increased by $49,067 to $667,067, a 7.81 percent increase.

The lower tax rate is the result of increased state education funding, new construction, increased property values and drops in business tax breaks.

The city has six categories of property from commercial to new homes.

“We have a $52 million increase in the value of the [city’s] tax base,” Fussell said. “That’s split between new value-new growth and revaluation of two of the six grades of property.”

Approximately 1,700 Brewer residents, mostly those who own older homes, will have their property revalued, resulting in an average 9 percent increase that will be offset by the 6 percent decrease in the tax rate, resulting in a 3 percent increase in tax bills, “which is sort of the rate of inflation,” Fussell said.

“We’re clearly pleased with being able to bring the mill rate down as significantly as we have,” City Manager Steve Bost said Friday. “This will be good news for our economic development efforts.”

Lowering the property tax rate has been a long-standing goal of city councilors, Fussell said.

“It makes [Brewer] really competitive in the region,” she said.

A drop in tax increment financing and increases in school revenues have helped decrease the amount of taxes needed.

The state subsidy for 2006-07 under the state’s Essential Programs and Services education formula is projected at $6,428,643, an increase of 14.5 percent over last year.

The draft municipal budget includes increases for utilities, including fuel, cost of living allowances for employees and an overlay amount or contingency fund used for tax abatements, which was increased by $132,130 to $172,130 this year in anticipation of a pending board of assessment review decision.

The budget also includes $2.2 million in capital improvement funds to replace the Brewer Auditorium roof and playground equipment at a South Main Street park; new software for the library; and road improvements, including a new road into the former Shurtleff property off Parkway South. Approximately $1.7 million of the capital improvements will be bonded this year, Fussell said.

Another $100,000 from the general fund will be placed into the capital reserve account to assist with the ongoing sewer separation project, Bost said.

“A lot of work has gone into this budget,” the city manager said, after thanking his department heads, especially Fussell. “I knew we’d get the mill rate down, but I didn’t expect it to drop below $19,” he said.