What Is a Mill Levy and How Does It Affect Property Tax?
Understand the key tax rate that determines your property bill. Learn how this figure connects your home's value to funding for local services.
A mill levy is the tax rate applied to a property’s value to determine the amount of property tax owed. This rate is the primary mechanism local governments use to generate revenue for public services like schools, parks, and emergency services.
The Mill Levy Calculation
A “mill” represents $1 of tax for every $1,000 of a property’s assessed value. The term originates from the Latin word “millesimum,” meaning thousandth. The tax is not applied to a property’s market value—what it might sell for—but to its “assessed value.” An assessed value is determined by a local government official, the assessor, and is a percentage of the market value, a figure set by law.
Once the assessed value is established, the property tax can be calculated using a straightforward formula. The property’s assessed value is divided by 1,000 and then multiplied by the mill levy rate. For example, consider a home with an assessed value of $100,000 in a jurisdiction with a total mill levy of 50 mills. The calculation would be ($100,000 / 1,000) x 50, which results in a property tax liability of $5,000 for the year.
Taxing Authorities and Fund Allocation
A property owner’s total mill levy is not a single rate, but the sum of several smaller levies from different government bodies, called taxing authorities or districts. These entities have the legal power to levy taxes on properties within their geographic boundaries to fund their operations. Common examples include public school districts, city governments, county governments, and special districts for fire protection, library services, or park maintenance.
Each of these taxing authorities determines its own mill levy rate based on its annual budget needs. The process begins when an authority calculates the total revenue required to provide its public services for the upcoming year. It then divides this required revenue by the total assessed value of all taxable property within its jurisdiction to arrive at the necessary tax rate. This rate is then converted into mills.
The process for setting these rates is designed to be public. Taxing authorities typically hold public hearings where budget proposals are presented and discussed. In many cases, significant increases to a mill levy or the creation of a new one must be approved directly by voters in an election. This system ensures that the funds collected are allocated to the specific services for which they were intended, with the tax bill often itemizing the portion of the tax going to each separate authority.
Finding Your Local Mill Levy Information
Locating the specific mill levy rates applied to your property is a direct process. The most detailed source of this information is your annual property tax statement or bill. This document typically includes an itemized breakdown of your total tax bill, showing the exact mill rate levied by each individual taxing authority, such as the county, city, and school district. This allows you to see precisely how much of your payment is allocated to each entity.
If you do not have your property tax statement readily available, another reliable source is the official website of your local government. The county assessor, treasurer, or tax collector’s office is generally responsible for managing property tax information. These websites often feature a searchable online database where you can look up your property by address or parcel number to view a detailed breakdown of your current and historical tax information, including the applicable mill levies.