Legal Definitions - Millage

Millage refers to the tax rate applied to real estate to calculate property taxes. It is a fundamental component in determining how much property owners contribute to local government services. This rate is expressed in "mills," where one mill represents one-thousandth of a dollar ($0.001) or one-tenth of a cent. Local authorities, such as county commissions, city councils, and school boards, establish their specific millage rates annually to generate the necessary revenue for public services like schools, police, fire departments, and infrastructure maintenance.

• Example 1: Residential Property Tax Calculation
  A family owns a home in "Maplewood County." The county government sets a millage rate of 15 mills to fund general county services like roads and emergency response. Separately, the local school district sets a millage rate of 10 mills to support public education. When calculating the family's annual property tax bill, both the county's 15 mills and the school district's 10 mills (totaling 25 mills) are applied to the assessed value of their home. This demonstrates how different local entities each levy their own millage to fund their specific responsibilities, all contributing to a single property owner's overall tax obligation.

• Example 2: Commercial Property in a Special Improvement District
  A small business operates out of a commercial building in the downtown area of "Riverside City." In addition to the standard city and county millage rates, this particular downtown area has a special improvement district that levies an additional 5 mills to fund beautification projects and enhanced security within that specific commercial zone. This illustrates how millage can be applied not just by broad governmental bodies but also by specialized districts to fund targeted improvements that benefit properties within a defined geographic area.

• Example 3: Impact of a Millage Increase on Local Funding
  The "Green Valley" city council is preparing its annual budget. Facing rising costs for public safety and sanitation services, they propose increasing the city's millage rate by 2 mills. If approved, this increase would mean that for every $1,000 of a property's assessed value, owners would pay an additional $2 in property taxes. This example highlights how changes in millage directly translate into increased or decreased revenue for local governments and a corresponding adjustment in the property tax burden for residents and businesses, reflecting the community's funding needs.