Asked by Kimberly Medlin on May 16, 2024
Verified
If the total of all assessed values rises by 5% over the current assessment, at what value must next year's mill rate be set?
A) 8.6903
B) 8.2923
C) 7.9923
D) 9.7684
E) 8.3906
Assessed Values
Assessed values are the valuation of property, usually by a public tax assessor, for the purpose of determining property taxes.
Mill Rate
The amount of tax payable per dollar of the assessed value of a property.
Current Assessment
An evaluation or estimation of the present status, value, or condition of something.
- Ascertain mill rates and recognize their implications on property taxation.
Verified Answer
RR
Randa RegesMay 21, 2024
Final Answer :
B
Explanation :
To maintain the same amount of revenue with a 5% increase in assessed values, the mill rate must decrease proportionally. The formula to calculate the new mill rate is: New Mill Rate = Old Mill Rate / (1 + Percentage Increase). Assuming the old mill rate is 1 (or any constant value since the specific old rate isn't provided), the new mill rate would be 1 / (1 + 0.05) = 1 / 1.05 = 0.9524. This calculation is a conceptual explanation; the correct answer (B) 8.2923, suggests a specific scenario not fully detailed in the question but follows the principle that the mill rate must adjust inversely to the assessment increase to yield the same revenue.
Learning Objectives
- Ascertain mill rates and recognize their implications on property taxation.