April 16, 2009
There has been a lot of
buzz lately regarding declining property values and their potential impact on
the 2009 Revaluation. Many taxpayers
are hopeful that a lower market will result in lower taxes. Unfortunately, it doesn’t really work that
way. Following is a brief summary of how
the mill (tax) rate is derived:
It
is the Assessor’s responsibility to list and value all properties in Town as of
October 1st each year, in order to come up with a total net taxable
grand list. In a revaluation year, all
properties are revalued; in a non-revaluation year, the list is merely updated
to reflect changes such as new construction and other permit work, new
subdivisions, survey clarifications, etc.
It is the role of the Town Manager and Finance Department
to work up an annual budget to present to the Town Council for approval. The
budget is then voted on during a Town Meeting,
held in early May. Once the
budget has passed and all non-tax revenue sources of income to the Town have
been deducted, the mill rate is set. The
mill rate (or tax rate) is calculated by dividing the grand levy (amount of
revenue that must be raised from property taxes) by the total net taxable grand
list. The mill rate reflects the taxes
generated per $1,000 of assessment. EX.
$100,000 (assessment) X .02524 (mill rate of 25.24) = $2,524 (tax).
Although
property taxes cannot be established without knowing what the net taxable grand
list is, the Assessor’s Office neither generates the budget and resulting grand
levy, nor sets the mill rate and, therefore, has no control over what an
individual actually pays in taxes.
Simply put, the Town needs to raise X amount of revenue each year to
balance its budget. Should property values for this Revaluation drop below what
they were in October 2004, the mill rate would have to increase to compensate
for the lower assessments.
For
more information, please check out the link, Commonly asked Questions &
Answers. Also posted in the Assessor’s Department link are
Irene
E. LaPointe, Assessor, CCMA II