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?
Correct Answer
A) 22.5 mills
If the total grand list increased by one-third (i.e., multiplied by 4/3), the municipality must reduce the mill rate proportionally to keep total revenue the same. New Mill Rate = Old Mill Rate ÷ (4/3) = 30 ÷ (4/3) = 30 × (3/4) = 22.5 mills. Verification: If the old grand list was X and old revenue = 30 × X/1,000, the new grand list is (4/3)X and new revenue = 22.5 × (4/3)X/1,000 = 30X/1,000. Revenue is unchanged. CGS § 12-62a requires this revenue-neutral mill rate adjustment following revaluation.
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Related Topics & Key Terms
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Related Concepts
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
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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?
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