The best source of information I know of
regarding the tax levy or mil rate is the City
of Madison Assessor's Homepage. This site contains
detailed information about the mil rate not only for
Madison, but also about the methodology that is used. The
following excerpt regarding the tax rate (mil rate) is
lifted directly from the portion of the assessor's page
devoted to describing the assessor's duties.
The City Assessor has three
major duties; to discover, list and estimate the value of
all taxable property within the jurisdiction of the city.
To insure that all property
is treated uniformly, the Assessor's procedures must
conform to State laws dealing with property taxation.
Furthermore, commonly accepted appraisal and accounting
practices must be used.
DISCOVERING
PROPERTY
The Assessor must maintain
accurate maps identifying each parcel of land in the city.
So there are no omissions, great care is taken to insure
that these maps are kept up to date.
The Assessor maintains close
coordination with other city offices to keep informed of
building activity.
Finally, constant attention
must be given to businesses which sell, move, or come into
the city to insure that all property receives an equitable
assessment.
LISTING
PROPERTY
So that your property is not
confused with another property, the Assessor must establish
a record showing you as the owner. The office records your
mailing address, describes the property in detail, prepares
a legal description and identifies your property on an
assessor's map by parcel number.
When values are finally
estimated and listed on the annual assessment roll, they
must be classified as either residential, mercantile,
manufacturing or agricultural. This information is listed
on the assessment roll and is open to public inspection.
Estimating the market value
of your property is simply a matter of determining the
price most people would pay for it in its present
condition.
However, the Assessor has
the monumental job of valuing all of the houses, all of the
shopping centers, the office buildings, and the many
apartment units in Madison. This includes estimating the
value of all of the office equipment and fixtures.
But it doesn't stop there.
Each year the Assessor has to do the whole thing over
again, because the market value of almost everything
changes from one year to the next -- as we all know.
This is done so that the
costs of schools, fire and police protection, health and
recreational facilities, and other public services can be
prorated over all taxable property in the city. Your share
of the cost of these services is based upon the value of
your property relative to the total value of all property
in the city. The value of your property, as determined by
the Assessor, is called the "assessed value." In
Madison, this assessed value is exactly the same (100%) as
the fair market value.
To find the value of any
piece of property the Assessor must first know what
properties similar to it are selling for, what it would
cost today to replace it, how much it takes to operate and
keep it in repair, what rent it may earn, and many other
dollar factors affecting its value, such as the current
rate of interest charged for borrowing the money to buy or
build properties like yours.
Using these facts the
Assessor can then go about estimating the property's value
in three different ways.
The first way is to
find properties like yours which have been sold recently.
Their selling prices, however, must be analyzed very
carefully to get at the true picture. One property may have
sold for more than it was really worth because the buyer
was in a hurry to occupy the property and would pay any
price to get in.
Another may have sold for
less money than it was actually worth because the owner
needed cash right away and was willing to sell to the first
buyer who made an offer.
Using this approach
(comparing the selling prices of properties similar to
yours) the Assessor must always consider such over- or
under-pricing to arrive at a fair evaluation of your
property's value. Various statistical procedures are
employed in this process.
The second way the
Assessor can go about this is based on how much money it
would take, at current material and labor costs, to replace
your property with one just like it. If your property is
not new, the Assessor must also determine how much
depreciation it has suffered.
The third method is
used in addition to the other two if you happen to own
property that provides you with a rental income, like an
apartment house, a store, or an office building. Here the
Assessor must consider such dollar factors as your
operating expenses, taxes, insurance, maintenance costs,
the degree of financial risk you have taken in earning
income from your property, and finally, the return most
people would expect to realize on this kind of property.
Of course, if your property
is the home you live in, the third approach cannot be used
since you derive no income from it. But in any case, you
can be sure the Assessor carefully considers all the
available, reliable money factors pertaining to your
property.
When market value changes,
naturally so does assessed value. For instance, if you were
to increase the total market value of your property by
building a garage, or adding a family room, the assessed
value would increase.
Similarly, should your
property's value be decreased by a fire, the assessed value
would decrease to show the downward effect of this damage
on the market value of your property.
For any number of reasons a
neighborhood, or a particular house style, may become very
popular, thus causing market values to rise at higher than
average rates. The Assessor must constantly stay alert to
spot these trends.
Inflation and the economy of
the entire community also affects your assessed value. We
all know that as building material, labor and the cost of
money increases, the value of the existing housing stock
also increases.
The Assessor has not created
this value -- people have made value by their transactions
in the market place. It is the Assessor's responsibility
each year to adjust existing assessments to keep pace with
the market.
The Assessor's primary
responsibility is to find the fair market value of your
property, so that you and other taxpayers may contribute a
fair share of support for the community services you
receive.
For these services to
continue, other agencies, as well as the city, must levy
taxes. The other taxing agencies include the Madison Public
Schools, Dane County, and the Madison Area Technical
College. Here again, state laws define the powers of these
taxing agencies and the kinds of properties that are exempt
from taxes, such as schools, scout camps, and churches.
Taxes levied by these other agencies are included in
your tax bill with the taxes levied by the City of Madison.
Each year the governing
bodies of the various taxing agencies propose budgets for
the next year. To finance the expenditures in the budget,
they total all expected sources of revenue such as state
aids and shared taxes, license fees and tuition. This is
subtracted from the estimated expenditures. The remainder,
which is the total amount to be collected through property
taxes, is the called the "tax levy." The amount
of the tax levy for the City of Madison depends on the size
of the City budget, which is determined by the Common
Council. The levy is raised by multiplying the value of all
the property in the City by a percentage, called the tax
rate. The rate is the same for all property owners. When
this tax rate is applied to the value of all the taxable
property in the city, it will total to the exact amount of
money needed for the levy to help finance City expenses.
The tax rate is calculated
by simply dividing the amount of taxes needed by the total
assessed value of all taxable property in the City.
Tax Rate = Levy ÷ Total
Assessed Value
Once the rate is set, the
assessed value of your property is used to determine your
portion of the levy. The tax rate when multiplied by the
assessed value of your property, equals what you owe in
taxes -- your tax bill. The tax rate is often expressed in
terms of dollars per thousand, or as a "mill
rate."
The entire taxation process
requires the cooperation of several parts of City
government. The Assessor sets the value of your property.
The Mayor and Common Council determine the cost of City
services, thereby establishing the tax rate necessary to
generate funds for these services.
If your opinion of the value
of your property differs from the Assessor's appraisal, by
all means come in and discuss the matter with us.
The personnel in the
Assessor's Office will be glad to discuss any questions you
may have about our appraisal. If you have evidence that the
appraisal is more than the actual fair market value of your
property, we will welcome the opportunity to review all
pertinent facts.
After talking with us, if
you still find a significant difference between our
appraisal and what you feel is your property's market
value, you may file a formal objection to your assessment.
This objection must be filed with the Board of Review in
writing.
Your objection will be
reviewed first by the Board of Assessors.
The Board of Assessors
consists of the City Assessor and six deputies appointed by
the Mayor and confirmed by Common Council. This Board has
the responsibility of reviewing all objections to
assessments and for making necessary corrections and
changes to arrive at the true value of property within the
city.
A member of the Assessor's
staff will inspect your property, review your written
statements and report his or her findings to the Board of
Assessors. The Board will inform you by mail whether or not
it concurs with your opinion.
You should sign and return
the form within 10 days, indicating whether or not you
accept the Board's determination, or if you desire to
proceed with a formal hearing before the Board of Review.
The Board of Review consists
of five citizen members appointed by the Mayor and
confirmed by the Common Council. Similar to a court, the
Board is charged with the responsibility of correcting
errors of under- or over-assessments.
The Board can act only upon
evidence given in the form of sworn oral testimony. You
should furnish significant evidence supporting your
estimate of market value. An appraiser from our office will
also present evidence relating to the market analysis
performed on your property. Then the Board will decide to
either raise, lower, or leave unchanged the value of your
property.
Keep in mind that the Board
can act only on evidence related to market value. Stating
that taxes are too high is not relevant testimony.
The best evidence of value
would be a recent sale price of your property plus an
account of any change that the property has undergone
between the date of sale and the assessment date. The sales
price would have to be adjusted to reflect the change in
property value between the date of the sale and the date of
assessment. The next best evidence of market value would be
sales prices of other properties in the neighborhood that
are comparable to your property. Lacking either of the
above, oral testimony by a qualified witness who has made a
market value appraisal of the property is also good
evidence. The Board will determine the market value of your
property as indicated by the evidence submitted by you and
by the Assessor.
You will be sent a written
notice of the Board's determination after the hearing. You
have the further right to appeal the Board of Review
decision to the Circuit Court of Dane County. Under the law
an appeal can also be taken from the Circuit Court decision
to the State of Wisconsin Court of Appeals. You may also
appeal the Board's determination to the Wisconsin
Department of Revenue.
