Newport homeowners could pay slightly more in city property taxes this year under a proposed rate increase that city officials say is needed to maintain services, retain employees and protect the city’s financial position.
The Newport Board of Commissioners held a first reading on Sept. 14, considering a real property tax rate of $2.31 per $1,000 of assessed value for 2026, up from $2.24 last year. The city’s personal property tax rate, meanwhile, would decrease from $2.80 to $2.73 per $1,000.
For the owner of a home assessed at $250,000, the real property tax change would mean paying $577.50 to the city, compared with $560 under last year’s rate, an increase of $17.50 annually. A $500,000 property would generate a city tax bill of $1,155, up $35 from $1,120.
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, is another form of property that isn’t real estate. Depending on where you live, residents may not be taxed on personal property at all–this will vary by jurisdiction.
Depending on where you live, other tax-adjacent fees may apply.
How do property taxes work?
Newport City Manager John Hayden said during a presentation on the proposed rates that officials have an obligation to show residents how Newport is managing its money before asking them to pay more.
“We can’t come to the public and ask to raise your taxes if we can’t show that we’re being responsible with the money that we’ve been given,” Hayden said.
Hayden outlined several steps Newport has taken to cut costs or generate additional revenue, including consolidating some employee responsibilities, changing how the city handles parking enforcement and using competitive bidding for services.
Newport has limited options for raising general fund revenue, Hayden said. Newport, for example, does not receive sales tax revenue from businesses operating within the city. Other sources, such as alcohol taxes and rental license fees, are restricted in how the money can be used.
The city’s 2026 compensating real property tax rate is $2.22 per $1,000. The compensating rate is calculated based on changes in taxable property values and is generally intended to allow a taxing district to collect roughly the same amount of revenue from existing property as the previous year.
Newport is instead proposing a rate above the compensating rate; because of that, state law requires the city to hold a public hearing before adopting the rate.
Matt Shipp, with the city’s finance department, said Newport’s taxable real property increased by about $31.6 million this year. The proposed real property rate is expected to generate about $3.06 million, while the personal property rate would generate about $303,573.
Combined, the proposed rates are expected to generate approximately $3.37 million, about $129,500 more than the compensating rates would produce.
Hayden said taking a lower rate could also have longer-term financial consequences for the city, including its bond rating.
“It’s a concern that if we take less, that at the end of the day, our taxpayers will be paying more in the form of interest on our debts,” Hayden said.
Hayden acknowledged residents aren’t likely to welcome a higher bill but pointed to the services supported by city revenue.
Employee recruitment and retention are another consideration, Hayden said. Newport negotiated a 7% cost-of-living adjustment for police and public works employees this year, while nonunion employees received a 4% adjustment.
“We have to be competitive with pay on all of these jobs, or we’re going to lose these folks,” Hayden said.
A second reading and final adoption are anticipated at the commission’s next meeting before tax bills are issued for the Oct. 1 due date.
“This board is very conscientious of taxes, tax rates,” Newport Commissioner Aaron Sutherland said. “This is something that weighs heavy on elected officials every year, and it’s not something that we take lightly.”
