SALEM — Tax bills are going up in Salem.
The average single-family homeowner will pay property taxes of $4,594 this fiscal year, an increase of $127, or nearly 3 percent.
For condominium owners, the bill increases $37, according to the tax rate approved by the City Council on Thursday night. The average condo bill is $3,459.
There's actually good news for the owners of multi-family homes. Tax bills on two-families will drop an average of $38, while three-families decline by $115.
The tax increases are among the lowest on the North Shore, city officials said.
Mayor Kim Driscoll, with council backing, kicked in $1 million from the city's free cash to offset the tax increases. Free cash is money the city saved from the prior year's budget or gained from higher than expected revenues.
"We obviously like to limit the tax impact as much as we can," Driscoll said. "In many instances, homeowners will see their bills go down. I hope people realize we try to preserve services and be mindful of the impact it has on taxpayers."
The average commercial tax bill is $14,336.
The mayor also announced that Dominion, the city's largest taxpayer, will pay the city only $1.75 million next year in taxes and a community host fee under a new tax agreement. That's a staggering drop of $3 million from the $4.75 million currently paid by the owner of Salem Harbor Station power plant.
"Obviously, that's a pretty steep decline," the mayor said. "Once you stop producing electricity, the value of their property declines greatly."
Dominion, a 745-megawatt oil and coal-fired power plant, announced earlier this year that it will shut two of its four generators by the end of this month and close completely by June 2014.
The impact of the lost tax revenue, however, won't be felt for the next five years because of state legislation that pays the city the difference between Dominion's annual payment and $4.75 million. Next year, as a result, the city will receive $3 million from the state under the "hold harmless" agreement.
area tax increases
CommunityAvg. FY12 Tax BillAvg. increase
Lynn$3,670$38
Peabody$3,379$70
Salem$4,594$127
Danvers$4,855$186
Beverly$5,435$207
Gloucester$5,512$241
Marblehead$6,958$286
Swampscott$8,307$464
Source: City of Salem
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