Updated! The Millage Rate Explained and How Property Tax Policy Might Encourage Sprawl
View CommentsToday Mayor Petyon announced to local business owners that he would propose an increase in the millage rate by 1.2 mils to avoid a 65 million dollar shortfall next year. This would be the first millage rate increase in over 17 years.
The Millage Rate is just a fancy name for the property tax rate:
The tax rate is referred to as the millage. The millage varies by taxing district within the county. Each taxing district’s total millage is comprised of individual millages determined by multiple taxing authorities operating within that district. Public meetings to determine the individual millages are held in September.
Much clearer now huh? Wikipedia defines the tax rate as “a tax on real estate made up of two components—the improvement or building value, and the land or site value.”
Multiply the property value by the millage (tax) rate and that’s the amount of taxes you pay COJ. There, much easier.
It sounds like the Mayor is getting ready for September (see above) when there are public meetings to determine the individual millages. So even if the rates do go up, you’re likely to not have a bigger tax payment until the next fiscal year.
I can’t help but think this is a good and long overdue thing for the city. Even though, if it passes, I will most likely have to move my family from where we live now as we’ll no longer be able to afford the taxes on our home.
UPDATE: My wonderful wife pointed out that it would only be ano ther couple hundred dollar per year and that I was overreacting. Let that be a lesson to the PR people spinning this out to the public. Break it down and point out the monthly impact with rate tables so people can see based on their home value, what the monthly will be.
Even so, it’s a harsh reality, that will be difficult for some people to deal with. I’m not looking forward to paying another couple hundred per year, but it’s for the good of the city right?
In the same Wikipedia article a case is made that traditional property taxes actually encourage sprawl. Our city is currently dealing with unchecked growth, so there may be some optional taxation models we can review.
In the absence of urban planning policies, property tax on real estate changes the incentives for developing land, which in turn affects land use patterns. The market value of undeveloped real estate reflects a property’s current use as well as its development potential. As a city expands, relatively cheap and undeveloped lands (such as farms, ranches, private conservation parks, etc.) increase in value as neighboring areas are developed into retail, industrial, or residential units.
This raises the land value, which increases the property tax that must be paid on agricultural land, but does not increase the amount of revenue per land area available to the owner. This, along with a higher sale price, increases the incentive to rent or sell agricultural land to developers. On the other hand, a property owner who develops a parcel must thereafter pay a higher tax, based on the value of the improvements. This makes the development less attractive than it would otherwise be. Overall, these effects result in lower density development, which tends to increase sprawl.
It’s interesting to consider, but there isn’t much actionable we can do. The city is in a pickle right now and we need to find a way out.
So far the Jacksonville Twitterverse has not reacted to this proposed rate hike. I suspect all heck will break loose once the Mayor announces this and it hits the 5 o’ clock news. We obviously need to hear what the Mayor has to say before we react, so I’ll reserve judgement until the press conference.








