A Connecticut municipality's total grand list (aggregate assessed value of all taxable property) is $2 billion. The municipality needs to raise $40 million in property tax revenue for its annual budget. What mill rate must the municipality set to raise exactly this amount?
Correct Answer
B) 20 mills
The mill rate is calculated by dividing the required tax levy by the total assessed value (grand list) and multiplying by 1,000. Mill Rate = ($40,000,000 ÷ $2,000,000,000) × 1,000 = 0.02 × 1,000 = 20 mills. This is the standard Connecticut method for setting the annual mill rate based on the approved municipal budget and total grand list.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
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Previous Question
A residential property in Westport, Connecticut has a fair market value of $600,000. The assessor applies Connecticut's standard 70% assessment ratio. The town's mill rate is 17.5 mills. What is the annual property tax owed on this property?
Next Question
A Connecticut municipality completed a revaluation in October. A property owner's assessed value increased from $210,000 to $280,000. The prior mill rate was 30 mills. The municipality is required to adjust the mill rate so that total tax revenue remains the same as before the revaluation. If the town's total grand list increased by exactly one-third due to the revaluation, what should the new mill rate be?