What is a ‘computed mill rate’?

A computed mill rate refers specifically to the amount per $1,000 of assessed property value that is used to calculate taxes owed by property owners. It is a crucial concept in property taxation because it directly links the assessed value of a property to the tax liability. By applying the computed mill rate, municipalities determine how much tax an individual property owner must pay based on the assessed value of their property.

In essence, if a property has an assessed value of $100,000 and the computed mill rate is 25 mills (which is equivalent to $25 per $1,000 of assessed value), the property owner would owe $2,500 in taxes ($100,000 / $1,000 x $25). This mechanism ensures that tax collection is proportional to property values, allowing for consistent funding for local services and infrastructure.

The other options focus on different financial concepts that do not relate directly to the calculation of property taxes in the same manner. Such distinctions help clarify the specific role of the computed mill rate within the context of property taxation.