Question

Given the following information, compute the property tax rate for the community in percentage terms. Convert this rate to mills. Total budget expenditures: $108 million, Total non-property tax income: $50 million, Total assessed value of all properties: $2 billion, Total exemptions: $550 million. show the work

Answer 1

The property tax rate is calculated to be 4% and when converted to mills, it equals 40 mills.

Step-by-step explanation:

To calculate the property tax rate for a community, first subtract the total non-property tax income from the total budget expenditures to determine the amount needed from property taxes. Next, subtract total exemptions from the total assessed value of all properties to find the taxable property value. Finally, divide the required property tax amount by the taxable property value and multiply by 100 to convert it to a percentage. To express the rate in mills, one mill is = 0.001, so multiply the tax rate by 10.

Using the given information:

1. Total budget needed from property taxes = Total budget expenditures - Total non-property tax income = $108 million - $50 million = $58 million.
2. Taxable property value = Total assessed value of all properties - Total exemptions = $2 billion - $550 million = $1.45 billion.
3. Property tax rate = (Property tax needed / Taxable property value) * 100 = ($58 million / $1.45 billion) * 100 = 4%.
4. To convert to mills: Property tax rate in mills = Property tax rate in percentage * 10 = 4 * 10 = 40 mills.