AUBURN — Recalculating the city’s overall property values could add an extra 25 cents to the city’s property tax rate, councilors were told Monday night.

Finance Director Jill Eastman said a $20 million reduction in business personal property values in Auburn will likely push the city’s 2014-15 property tax rate up from the $20.75 councilors approved in June to about $21 per $1,000 of property value.

“We are still working on that with our auditors,” City Manager Clinton Deschene said. “I can’t give it a firm $21 yet because we are working on it, but our best projection is close to $21.”

That’s about $37.50 more in taxes on an Auburn home valued at $150,000. The budget approved in June already increased property taxes by $48 on a $150,000 home compared to the 2013-14 fiscal year.

Deschene said the increase was caused by business property made exempt as the state phases out the business equipment tax.

“I think it’s partly that,” Deschene said “That alone was a $17 million hit. That’s what our assessing department has told us we lost this year because of that phase-out.”

Deputy City Manager Howard Kroll said the city appears to have dodged another financial bullet after state revenue sharing payments to the city were significantly smaller than in the previous years.

He said it appears the city will receive what it expects from the state for the remainder of the year and that the amount cut from the July payment will be made up. The July payment did not include the city’s portion of $40 million in last-minute revenue sharing money legislators approved last spring.

“So that July payment represented what we would have expected all year, had that $40 million reduction gone into effect,” Kroll said. “In fact, that legislation should protect municipalities and that remainder of the July payment should be made up throughout the year.”

Councilors are scheduled to decide how to handle the property tax rate increase at their Aug. 18 meeting, but they were not pleased Monday night. Councilor Tizz Crowley said it shows bad faith to taxpayers.

“It creates more of a problem that I’ve been talking about,” Crowley said. “We need to provide our residents a forecast of what generally their taxes are going to be in 10 years, so they know if they can afford to stay there. Not taking care of assessed values and not being realistic about it is the problem.”

Councilor Belinda Gerry said she wanted councilors to start the budget process over and adopt a supplemental budget for the rest of the fiscal year.

“I was not proud of the budget from the beginning,” Gerry said. “My gut feeling is look for ways we can cut and pull in our belts a little bit more.”

Councilors also approved a $7.6 million bond issue on first reading, after narrowly voting down a larger borrowing package.

The new borrowing plan does away with $624,000 in projects and purchases. It cuts the road reconstruction budget by $200,000, from $1.1 million to $900,000; reduces the road resurfacing budget by $100,000, from $1 million to $900,000; eliminates a $25,000 New Auburn Fire station generator; cuts property acquisitions from $400,000 to $350,000; reduces softball field maintenance by $12,000; and eliminates a $255,000 front-end loader.

Deschene said he and his staff will have to report back to councilors on how those cuts will be spread out.

Councilors are scheduled to vote on the bond package on second reading later this year.

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