MEXICO – Although selectmen on Wednesday set a tax rate 30 cents per $1,000 less than the previous year’s, property taxes are still going up nearly 10 percent.

Last year’s rate was $28.80 per $1,000; this year’s is $28.50 per $1,000.

The higher tax bills are caused by an across-the-board 10 percent increase in valuations of all properties in town. For example, if a property was valued at $50,000 last year, it will automatically be valued at $55,000 this year, then the $28.50 per $1,000 valuation will be assessed.

Town Manager Joseph Derouche said the town needed to increase the valuation of all property, both buildings and land, because of the widening gap between the state’s total valuation of the town, at nearly $84 million, and the town’s assessed valuation of only $73 million. Such a wide discrepancy could lead to a reduction in the state’s reimbursement of homestead, tree-growth and veterans’ exemptions, he said.

If the board had left the values of properties as they are now, the tax rate would have surpassed $31 per $1,000 valuation. Derouche said maintaining the town’s valuation could also have a negative effect on the town’s rating.

He said the town’s last complete revaluation took place more than a dozen years ago, and real estate prices are increasing rapidly. The town hopes to start a complete, in-house revaluation next year with about $11,000 set aside in a capital account. If consultants were hired to conduct such a revaluation, the cost would be many times higher, said the town’s tax assessor, Rob Stevens.

The bottom line tax rate for 2004-05 also reflects a loss of property valuation between last year and this year. Although the town’s total valuation rose $1.5 million as the result of new development, it lost $4.2 million in valuation from the MeadWestvaco landfill because environmental exemptions brought down the gross amount of taxable property.

Voters approved a $1,537,158 budget at the June town meeting, up about $205,000 from the previous year’s figure.

Tax bills will be in the mail within a few days. The first payment is due in October without penalty. The second payment is generally due in March.