How is the millage rate calculated?

The millage rate is determined by dividing the total budget of a taxing authority by the assessed value of the properties within its jurisdiction, often referred to as the assessed value digest. This calculation is essential for establishing property tax rates, as it ensures that the amount of tax collected aligns with the funding needs of the municipality or district.

When a jurisdiction sets its budget, it needs to know how much revenue will be generated through property taxes. By dividing the budget by the assessed value digest, the millage rate can be computed. This rate indicates how much tax is levied per $1,000 of assessed property value. Understanding this relationship is crucial for both property owners and appraisers, as it directly affects property tax bills and assessments.

Calculating the millage rate using other methods, such as the total property values or market rates, would not yield an accurate representation of how much tax revenue will be generated, as those figures do not reflect the specific assessed values that are used to determine actual tax obligations.