Determining the Property Tax Rate
Three factors determine the property tax rate.
- The property tax levy
- The total assessed value of the community
- Classification
Property Tax Levy
The tax levy is the amount of money to be raised by the property tax. Each year the amount to be raised must be determined in accordance with Proposition 2 ½. This is computed by taking the total of the previous year's tax levy increased by 2 ½ percent, plus overrides, exclusions, and growth. Increases due to growth are based on the increased value of new developments, additions, renovations and other growth in the tax base that is not the result of an increase in value due to market forces. An example of other growth would be a formerly tax exempt property which becomes taxable. The purpose of this provision is to recognize that new development results in additional municipal costs.