Homeowners within the city of Montgomery can expect to receive a 20% tax break on their homestead property taxes in the next fiscal year.

City Council adopted a resolution July 21 that establishes a new 20% homestead exemption—the highest exemption allowed by state law. This is the first time a homestead exemption has been approved by the city, according to a city news release.

The exemption applies to 437 families, according to city officials.

Under the exemption, a home that was valued at $275,000 as of Jan. 1 would see taxes reduced by $220.

At their July 21 meeting, council members weighed the pros and cons of the exemption, as it would result in an $86,000 revenue loss for the city.

Council Member Julie Davis pushed for the full 20% exemption, arguing that the city’s sales tax will balance out revenue loss. She also said it would be better to do the 20% exemption before the city gets too big.

“If we are ever going to try 20%, we need to do it now,” Davis said.

Mayor Sarah Countryman said the city’s future revenue and expenses along with future infrastructure and development needs should be considered.

“It’s that balancing act,” Countryman cautioned.

Some tension arose when Davis said she understood the need for the revenue but the city has spent thousands of dollars on “goats and walkie-talkies or whatever else you want.” Davis was referencing the Montgomery Economic Development Corporation branding efforts and purchase of walkie-talkies.

“They’re not just walkie-talkies, the chief requested those and they’re actually for emergency services,” Countryman fired back.

Council ultimately voted unanimously to approve the exemption.