How is a jurisdiction's tax rate determined?

A jurisdiction's tax rate is determined by dividing the budget, which encompasses the total amount of money needed to fund governmental services and programs, by the assessed value of the property within that jurisdiction. This method directly correlates the funding requirements (the budget) with the total value of properties that are subject to taxation.

Using the assessed value allows the jurisdiction to spread the required revenue across all taxable properties fairly and equitably, based on their value. By incorporating the assessed value into the calculation, the tax rate is effectively set to generate sufficient revenue while reflecting the amount of taxable property that will contribute to that revenue.

This approach ensures that as the assessed values of properties change—whether due to market fluctuations or re-evaluations—the tax rate can be adjusted accordingly to meet the budgetary needs. Hence, it is a fundamental principle in property taxation that properly aligns expected revenue with fiscal requirements.