Tax Talk: What is a Millage?
As election season rolls around, discussions are often centered around the raising or lowering of taxes. For many local elections, there are items on the ballots about raising or lowering a millage.
For many, though, it is not common knowledge about what a millage is or how it translates to actual dollars.
The Definition
A millage is the number of dollars of taxes assessed for each $1,000 of property value, or 1/1000 of a dollar, or one tenth of a cent. In policymaking, you will often hear the term “mills” used as an abbreviation. To put it in cash terms, one mill = $1 for every $1,000.
These property values for which mills are created are based on a property’s value (both the structure and the land where it sits) and is paid for by the individuals who own that property.
How are they used?
Voters will often find proposals on their ballots for millages for different government agencies or municipalities in your area. Millage proposals are usually for a renewal or an increase. This is important to remember as it directly affects your property taxes.
In Louisiana, there are millages that are assessed for all parishes, some specific to the parish of your residence, and some specific to your city of residence. If you wonder where your money is going, some examples are below.
- Courthouses
- Juvenile detention centers
- Correctional detention centers
- Drainage
- Roads and Bridges
- Roads/Highways
- Airport
- Libraries
- Economic development
- Law enforcement
- Public schools
- Police and fire departments
- Playgrounds and recreation centers
- Police and fire salaries
Not all parishes (and counties) will have the same millages.
Actual Dollars Breakdown
When millage renewals turn up on the ballot, it is normal to ask oneself, “How much will this actually cost me?” Check out the few samples below.
Hypothetical proposal: Increase Roads/Highways/Bridges to 2 mills.
Taxable assessed value of property: $200,000
2 mills x.002
$200,000 x .002 = $400
So, in short, you personally will spend approximately $400 per year on road and highway improvements.
When it comes to millage renewals or increases on the ballot, consider the following:
- What is my current property value? (Your previous year’s property tax statement is a great place to start)
- Where is this money going?
- Who does this money benefit?
- What are the actual dollars that will come out of my pocket?