Newark weighing tax-rate changes to encourage home ownership

# What Newark is considering Newark leaders are examining ways to change how property taxes are calculated after last year's reassessment and the new tax rates. The city is focused on two alternatives: a split tax rate between commercial and residential properties, or a homestead exemption that lowers taxes for owner-occupied homes while moving apartments into the commercial tax side.

# How each option would work

# Who gains and who pays more Homeowners who live in their properties would generally benefit under the homestead approach. The city presentation included a model where a homeowner whose assessed value dropped by $75,000 could see about $50 in annual tax savings under the plan.

By contrast, landlords and tenants in rental units that don't qualify for the homestead exemption would face larger increases. The presentation showed median homestead and median residential properties are currently treated equally at about $900 in taxes. Under the modeled scenario, the owner-occupied (homestead) property's tax would increase by about $60 next year, while a non-owned residential property would increase by about $300 — roughly 15% more than homestead properties.

Small businesses would get mixed results. Moving apartments and other non-homestead residential parcels onto the commercial side would enlarge the commercial tax pool and could lower the relative share businesses pay. The presentation used National 5&10 on Main Street as an example: the store could save up to $170 under the proposed change, but would still face a large net increase — an $855.31 rise — if the city needs to raise roughly $2 million in new taxes to balance its budget.

# Council perspectives City Councilman George Irvine expressed support for a homestead exemption because it simplifies calculations and would help mitigate some of the post-assessment tax increases small businesses face. He said, "I really think a single tax rate makes us more attractive to businesses and more friendly to small-and-medium-sized enterprises."

# Fiscal context and next steps Officials have not committed to a specific breakdown of tax rates. The city must present a balanced budget by the end of the year and currently needs about $2.7 million in savings or new revenue to reach neutrality. Newark has scheduled its next financial workshop for October 12 to continue weighing options and their budgetary impacts.

# What to watch

• Whether Newark adopts a homestead exemption or a split tax rate.
• The final calculations showing how much different property categories would gain or lose.
• Any measures to mitigate impacts on renters if landlords pass through higher costs.