Please only use this book as a source
John Mikesell. 2010 (8th ed). Fiscal Administration: Analysis and Applications for the Public Sector, published by Wadsworth, Cengage Learning.
Questions and Exercises #3, on page 523.
You need to carefully read the textbook before you hit the HW. Understanding the concepts in property tax is the key, such as appraised value versus assessed value.
Hints for the homework of this week, the appraised value includes two parts: real property and personal property. Both needs to be considered as taxable properties.
As the textbook indicates, the first step is to calculate the total appraised value (the two parts mentioned above), then calculate the gross assessed value by multiplying the appraised value by the assessment ratio (recall the assessment ratio reflects the relationship between market value and assessed value), then calculate the net assessed value by deducting the exemptions for elders from the gross assessed value. Statutory rate is property tax levy (remember its residual nature: expenditure minus nonproperty tax revenues=property tax levy) divided by net assess value. Pls note: there is only one class of property in this HW, therefore, it is simpler than the formula on page 493, no Wb (intended multiple) for different classes.
On page 495 of the textbook, the effective rate equals the statutory rate multiplied by the assessment ratio. I will upload the textbook chapter that is needed in order to answer the question. I circled the question.
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