The document discusses property tax administration and calculations. It explains that tax districts determine tax rates by calculating the tax base total assessed value, setting a budget, subtracting aid, and dividing the remainder by the tax base to set the statutory tax rate. It also discusses how individual property taxes are calculated by multiplying a property's assessed value by the mill rate and dividing by 1,000. Finally, it covers the differences between statutory and effective tax rates, with the effective rate calculated by dividing the tax bill by the market value.

1. Property Tax
Administration
Tax Districts
District Tax Calculation
Assessment
Calculation of Tax Obligations
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Fire Districts

4. School Districts
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5. Waste Management
Districts
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9. District Tax Levy
• Compute tax base (add up the assessed
values of all the taxable real property
in the district = $100 million).
• Set the budget ($2.5 million)
• Subtract intergovernmental aid ($1M)
• Divide the remainder ($1.5 million) by
the tax base ($100 million) to calculate
the statutory property tax rate = .015
or 1.5 percent or 15 mills
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10. Mill Levy
Property tax rate.
A mill is equal to $1.00 of tax for each
$1,000 of assessment, or .1 percent.
To calculate the property tax multiply the
assessment of the property by the mill
rate and then divide by 1,000. For
example, a property with an statutory
assessed value of $500,000 located in
a municipality with a mill rate of 10 mills
would have a property tax bill of
$5,000.00 per year
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11. Rate Based Systems
• Specify a Mill Rate (or
Percentage Tax Rate)
• Apply to tax base
• Fit budget to anticipated revenues
• Propose a change in tax rate
consistent with spending plans
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12. Rate Based Systems
• Specify a Mill Rate (or
Percentage Tax Rate, e.g., 15 or
1.5%)
• Apply to tax base
• Fit budget to anticipated revenues
• Propose a change in tax rate
consistent with spending plans
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13. Rate Based Systems
• Specify a Mill Rate (or
Percentage Tax Rate, e.g., 15 or
1.5%)
• Apply to tax base ($100M =
$1.5M)
• Fit budget to anticipated revenues
• Propose a change in tax rate
consistent with spending plans
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14. Rate Based Systems
• Specify a Mill Rate (or
Percentage Tax Rate, e.g., 15 or
1.5%)
• Apply to tax base ($100M =
$1.5M)
• Fit budget to anticipated revenues
($2.5M = $1M + $1.5M)
• Propose a change in tax rate
consistent with spending plans
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15. Rate Based Systems
• Specify a Mill Rate (or
Percentage Tax Rate, e.g., 15 or
1.5%)
• Apply to tax base ($100M =
$1.5M)
• Fit budget to anticipated revenues
($2.5M = $1M + $1.5M)
• Propose a change in tax rate
consistent with spending plans (if
necessary)
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16. Assessment
• True market value
• Method of comparables
• Econometric (hedonic
pricing) assessment*
• Book (acquisition cost minus
depreciation), replacement
cost, cash flows
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Residential
Real Estate
Commercial
Real Estate
*Accuracy is a function of frequency

17. Proportional
Assessment
• Usually expressed as as
proportion of market value
• Often used to discriminate in
favor of certain property types
• Other statutory standards
Oregon = AV 1994 plus 3%
Per annum = 1.65(AV 1994),
or MV, whichever is less, in
FY2011
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19. Statutory vs Effective
Property Tax rates
• Property tax bill is calculated by
multiplying the sum of tax rates
that apply to the property by the
property’s AV.
• The effective tax rate is found by
dividing the tax bill by MV
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20. Statutory vs Effective
Property Tax rates
• Property tax bill is calculated by
multiplying the sum of tax rates
that apply to the property by the
property’s AV.
• The effective tax rate is found by
dividing the tax bill by MV (a
better measure might take account
of the MV of all the property in a
jurisdiction and not just the taxable
property).
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22. Thought Questions
• In a levy-based system, what happens
to tax rates if you add to the tax base?
To a district’s revenues? What happens
to your tax bill if your neighbor’s
property increases in value and yours
doesn’t?
• In a rate-based system, what happens
to tax rates if you add to the tax base?
To a district’s revenues? What happens
to your tax bill if your neighbor’s
property increases in value and yours
doesn’t?
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