Question

Midland City has a proposed budget of $7,000,000 for the new fiscal year. The city's market value is $100,000,000 and the city expects to receive state aid of $100 per capita based on its most recent census population of 15,000; it has no other revenue sources. The classification ratio is 25% for all properties. The tax rate per $100 of assessed value would

Answer 1

Answer:

5.5%

Explanation:

The revenue that will be generated from state aid is $1,500,000 ($100 * 15,000).

Revenue from Property Tax = $7,000,000 - $1,500,000 = $5,500,000

Now we can calculate the tax by using the following formula:

Tax rate = Revenue from property tax / Market Value of City

Tax rate = $5,500,000 / $100,000,000 * 100 = 5.5%