HAVERHILL — The City Council will decide Tuesday what rate homeowners and businesses will be taxed this year.

If the council adopts the same 1.50 classification factor for fiscal 2010 as in fiscal years 2008 and 2009, the owner of the average single-family home would see their annual tax bill increase by $109 to $3,474, according to City Assessor Stephen Gullo.

Under that classification, the owner of the average commercial property would see the tax bill go up by $1,136 to $13,372, and the owner of the average industrial property would see the bill increase by $2,395 to $22,966.

The classification factor determines the split between what homeowners and business owners pay in taxes. A 1.50 factor means businesses are taxed 50 percent higher than they would if the rate was the same for everyone.

The idea behind the tax factor law is to allow councilors to give homeowners a bit of a break. Critics argue that making commercial and industrial property owners pay at higher rates than residential owners is unfair and makes it harder to attract and keep businesses.

In Haverhill, single-family home values fell for the second consecutive year, Gullo said. The average home in the city is now valued at $272,262, down from $293,847 in 2009 and $313,116 in 2008.

Commercial property values fell by about $17,000, and industrial land decreased in value by $7,000 on average, he said.

The city's largest tax payers include Merrimack Valley Hospital, the new Whittier Rehabilitation Hospital in Bradford and the new Lowes, BJs and Target retail stores.

The tax classification factor is set by the council. The process requires Gullo to provide the council with information on the possible tax impacts of six options — 1.50, 1.40, 1.30, 1.20, 1.10 or zero, meaning residential and business property owners would pay the same rate.

The City Council has historically adopted the 1.50 rate. The city can go no higher unless it obtains special approval from the state Legislature.

Last year, the council tried to lower the factor to 1.45, which would have given businesses a slight break at the expense of residential payers. The council initially voted 5 to 2 for the 1.45 factor at the urging of Greater Haverhill Chamber of Commerce President James Jajuga.

But Mayor James Fiorentini vetoed the 1.45 split, and the council eventually passed a 1.50 factor.

Fiorentini said he probably won't attend Tuesday's hearing and vote, which is set for 7 p.m. He said he does not intend to get involved in the matter unless the council tries to lower the tax factor in favor of businesses again.

"The current split has allowed us to attract businesses while still maintaining one of the lowest average residential bills in the Merrimack Valley," the mayor said.

The current Fiscal Year 2010 runs from last July 1 to June 30. This year's "actual" tax bills, based on the new factor and rates, will be mailed in early January, Gullo said.

Previous bills sent this year have been estimates.