New London ― City officials are searching for ways to blunt a potentially significant increase in residential tax bills after assessed values spiked in the recent property revaluation.

The city late last year completed a state-mandated revaluation of all 7,000 properties within its borders. The review led to the assessed value of all real estate properties – residential, industrial, commercial – increasing an average of 42.8%.

Residential properties, including rentals, shot up by 60%, with commercial properties increasing by 20% and industrial properties up by 25%. The appraised value is the full market value of a home, while the assessed value is 70% of that total. Property taxes are calculated on the assessed value of a property

The wide range of new average assessments presents challenges heading into budget season, said Mayor Michael Passero, who added he’s committed to keeping taxes the same.

“That, or decreasing (taxes), is still the goal, but there are significant issues or challenges as we develop the (2024-25) budget,” Passero said Tuesday. “If everyone’s assessment rose by the exact same average, like by 20 or 30%, we’d in past years lower the mill rate so tax bills stay the same.”

But the increases between different types of properties makes it difficult to devise a percentage decrease in the tax rate that is fair, he said. He said preliminary grand list figures, which also include motor vehicle and personal property numbers, put the total average property value increase in the city at 34%.

“If we lowered the mill rate to achieve that average, then all our residential property owners and apartments – which would affect the rents – would see their taxes increase significantly because their properties increased nearly twice the average of the grand list,” he said.

But simply dropping the tax rate to address the 60% residential property jump could lead to a “potential, and dramatic, loss of revenue for the city,” he said.

“The problem is, all sections of the city did not perform the same; there were winners and losers in this reval,” Passero said.

Assessor Donna Ralston said that “On average, we saw assessed values for houses in our shoreline neighborhoods go up. That’s not surprising since this reval includes the pandemic years when people came in from places like New York and bought up property.”

In a notice posted on the city’s website, Ralston warned residents not to apply the current tax rate rate to their new assessment to figure out their next tax bill because the rate will change with the approved 2024-25 budget.

Residents seeking to appeal their property assessment can file with the Board of Assessment Appeals by Feb. 20, or March 20 if an one-month extension is deemed necessary by the assessor’s office. Appeal applications can be obtained at the assessor’s office, 15 Masonic St.

Editor’s note: This version corrects Mayor Michael Passero’s comment that he is committed to keep taxes the same.

j.penney@theday.com