The City of Corner Brook has dropped its tax rates for homeowners and businesses, although the new budget will still mean higher payments for most.

At its meeting on Monday evening, council cut the residential tax rate from 9.2 mills to 8.0 mills.

That provides some relief for homeowners who saw their property assessments soar earlier this year. The average home value jumped by 24 per cent in the latest round of evaluations. Commercial assessments were up about 15 per cent.

"We just kind of tried to make it as painless as possible and try to bring the mill rate to the point where people wouldn't see a real significant increase in their taxes," said Deputy Mayor Donna Luther.

The budget means that the owner of a $200,000 house is looking at a tax increase of $134, the city said.

The commercial tax rate was cut from 13.5 mills to 12.5 mills.

"Our job, our role, was to get it to the point where we could manage the city, do the infrastructure things that we needed to do at the same time as keeping the increase down as much as we possibly could," Luther said.

Council also raised the poll tax from $175 to $200.

Meanwhile, the city has decided to reduce its public transit.

A year-long pilot project saw extra buses and added hours of service, but a review a few months ago found the system was costing taxpayers too much money.

Coun. Donna Francis says the city will revert to a two-bus system with no evening or weekend service.

"There are so many communities our size that do not have any sort of public transit, so I still think we're ahead of a lot of other communities in that area, even though we have a limited service," Francis said.

The change will take effect in January.

Several other municipalities in Newfoundland and Labrador have also lowered tax rates in response to increased property assessments.