As City governments across North Dakota are knee deep in 2013 budget preparation, AE2S Nexus has designed a tool to assist in the process. The Mill Levy “Calculator” provides a full list of municipal mill levies and maximum mill levies allowed for each type. The tool is specific to North Dakota. Budget preparers are able to input estimated taxable values and estimated funds needed for each mill levy and the Calculator will return the resulting mills for each levy. The Calculator also provides an estimated City portion of an individual homeowner tax cost, based on the value of a residential property.
In preparation of the annual budget, city auditors need to estimate the mill value or local tax rate to determine the approximate property tax revenue during the tax period. In North Dakota, the total tax levies are calculated by adjusting the market value of each property, partially based on property type, to determine its taxable value. The individual property taxable values are totaled for the political subdivision to represent the total tax base.
One mill has a value of one-thousandth of one cent (tax base/1,000 = 1 mill). Once the taxable values and funds needed are entered, the Mill Levy Calculator will automatically calculate each individual fund mill levy and the total mill levy requested. The county auditor or county tax director can provide a reliable estimate of the new mill value, local tax rate, or equivalent measure for the City. The tax base for a political subdivision and final tax levy request from the budget will determine the property tax rate. The Calculator also has the ability to provide information to individual homeowners on the estimated City portion of their tax bill.
Property values rise and fall, subsequently affecting the City’s taxing ability. For example, if the mill or local property tax value decreases, it will negatively impact the amount of levy that the City can request. In this case, the county auditor would reduce the available tax dollars, thereby creating a budget shortfall. Conversely, if the mill or local tax rate levy value increases, the available tax dollars will increase. Cities need to be aware of this in order to ensure that budget requests are adjusted to accomodate the actual levy amount. Maintaining and referencing a list of historical values will help to anticipate the impact that any changes to the property valuations will have on the budget.
As stated in NDCC 40-40-09, the amount levied is subject to the limitations as prescribed by the laws of this state and is subject to the further limitation that the amount may not exceed the levy requested by the municipality. The levy adopted must appropriate, in specific amounts, the money necessary to meet the expenses and liabilities of the municipality. The Calculator has been programmed to account for the current limitations in place in North Dakota. However, Home Rule Cities may exceed state mill levy limitations only if the Home Rule Charter and ordinances provide for it. A Home Rule City should contact the county auditor to find out the total maximum mills that the city may levy for. According to the North Dakota Attorney General’s opinion letter 97-L-172, levies may not exceed the total “sum of levies authorized by state statutes.”
We hope that the Mill Levy Calculator will be useful to North Dakota communities during budget planning. To try out the Mill Levy Calculator, click .