The Value of a Mill
Whenever MAS has a meeting, a common question is typically asked by supervisors of their colleagues from other counties. That question is typically something along the lines of, “How many mills do y’all levy?” While comparing mileage rates is an easy conversation starter, it is important to remember that the mileage rates cannot be compared without an understanding of a mill in a specific county.
A mill is a unit used in the calculation of a tax levy, but its value will vary depending on the assessed value of the particular taxing district. In simplistic terms, the value of a mill is determined by multiplying the taxable assessed value (nonexempt property) by .001. Because each county will have differing assessed values, a mill will have different values as well. The higher the assessed value of a county, the more a mill will be worth.
For example, Oktibbeha County currently has a taxable assessed value, adjusted for a 95% collection rate, of just over $400 million. Therefore, a mill is worth approximately $400,000. The neighboring county to the west, Webster County, has a taxable assessed value, adjusted for a 95% collection rate, of roughly $60.5 million. Therefore, one mill in Webster County is worth approximately $60,500. While the courthouses are only 35 miles apart, because of the differences in assessed values in each county, the value of a mill in these counties differ by about $340,000. To take it a step further, if the two counties had the exact same millage rate of 35, Oktibbeha County would generate $14 million in ad valorem taxes and Webster County would generate $2.11 million in ad valorem taxes.
This difference in the value of a mill between the counties is why just comparing millage rate as a measure of a county’s ability to provide services to its citizens is a false premise. In discussions of millage or millage rates, make sure that you are comparing apples to apples for a complete understanding of the total fiscal picture.
You can reach Sumner Davis at the Extension Center for Government and Community Development, P.O. Box 9643, Mississippi State, Mississippi 39762. Email Sumner.Davis@msstate.edu or call 662-325-3141.