 Welcome! I used to be the county auditor for Dunn County for about 31 years and property tax calculations was always very interesting. I think one of the things that I learned is that until you sit down and actually do it, it's really tough to understand. But I'll do my best trying to explain exactly how property taxes work, how valuations are created, how calculations are made, and what middle levees are. Each piece or parcel of land within a county is valued. There's a value put on it. Several different ways to put the value on it, but each parcel of land and improvements. Each quarter section, each lot and block, every building unless it's a farmstead. Most farmsteads are exempt from taxes if they meet certain criteria, which we won't go into today. But each piece or property is a value put on it. Now if it's farm land, grazing land, ag land, that determined is determined. The valuation is determined by the NDSU Extension Service out of Fargo. And it's based upon production, interest rate, input costs. And this formula has been developed by the legislation over the years and it gets tweaked every now and then. So that the value is actually production rather than associated with what it sells for. Now commercial property, property that's not ag land, property that is a business, whether it be in the country or be in town. A commercial business is valued by sales. In other words, you have to have a record of the number of sales you have had in your county. And that goes to the state. And the state looks at it and says, okay, your property, commercial property needs to be valued at X number of dollars. Because that is what it's selling for. And they control that. They tell you, you know, you've got to raise your property 5% or 10% your commercial property values or your lower them, whatever it takes. Residential property is also determined by sales. So if you're selling property within a town, a residence, that property value that is placed on it for taxing purpose is determined by the sales. Again, same thing. Tax department looks at it says, no, you're too low. You've got to raise all your value. No, you're too high. You've got to lower all your values. A lot of counties over the past couple of years have went through reassessments and hired a firm to come in and actually reassess the counties to get the values where they should be. So that everybody's paying on the same fair rate, that's exactly what your property is worth. And then there's centrally assessed property. Pipelines, power lines, railroads, gas processing plants, public utilities. Those values are all put on by the state tax department and the counties have very little of anything to do with that. So the assessed value is half of what the value is true and full value is what it's called. Okay, they put in this extension says my quarter section of land based upon a price per acre is worth $50,000. We divide that in half that becomes the assessed value. We take it times 10%. That becomes the taxable value. And that taxable value is what the county auditor works with as they set the taxes based upon the budget requests. Ag property is assessed at 10% of half of the full value. Why? I don't know. That's the way it works. Commercial ag and centrally assessed is 10% of the half of the full and true value. And residential property taxable value is 9% of the half of the true and full value or full value. So we get a $40,000 piece of property with let's call it a quarter of land. We take it times 50 and then times 10 times 50% times 10% you get a $2,000 taxable value for that quarter section of land. If you have a $150,000 home you take it times half 50% times 9% you get $6,750 taxable. And you have a commercial shop that's worth a million bucks. And you take that again times 50% times 10 and you get a $50,000 taxable value. Total of all the taxable values from all types of property within the county equals the county's taxable valuation or the tax base. For example, let's take the county that for even numbers has a $5,000,000 residential or excuse me, ag land, 5 million residential, 5 million commercial, 5 million centrally assessed. These are taxes, tax values based upon what we talked about earlier. True and full times 50% times 9 or 10%. So now we have a county tax base, taxable valuation of 20 million. Okay, let's say that the county agents budget on this is $40,000. You divide that 40,000 by 20 million and you get .002 or 2 mils. A mil is .001 of a number and in this case this number is a taxable value. .002 times that $40,000 quarter of land, which now had a tax base you remember of 2000, you get to pay 4 bucks per quarter. And if you're living in a $150,000 home, that 2 mils on that $150,000 which equates to $6,750 in taxable value times .002 would equal $13.50. Now there's a maximum mill levy worksheet that is used by the auditor to calculate mill levies and to stay within the mill levy allowed by law. Now a couple of sessions ago the legislature set a difference in funds. They combined a bunch of funds and so you have to have within your general fund or a lot of different funds the county used to levy for. Those are now combined and you have to have a certain amount of mills that you, maximum amount of mills that you can levy. So that has changed but anyway as the county auditor calculates mill levy she has to stay within the mill levy allowed by law or he. What that is is that the state legislature has set a maximum amount of mills for each particular budget and fund as well as you all know extension service. Now in order to do all of this calculating you must use the largest amount levied over the last three years as a base year. Additions and deletions of value from previous years like I said this is like a 25-30 line levy sheet that you can use or have to use to determine your maximum amount that you can levy and still stay within the law. The sheet is used for each entity that the county is responsible for setting the mills for and the county does set the mills for everybody. For the cities, the schools, the fire districts, the water districts, the ambulance districts, soil conservation districts, all those different various funds and agencies that levy taxes. The assessment set on all properties as property values increase does not necessarily mean that your taxes are going to increase. That's one thing that's hard to understand. My property goes up, don't my taxes go up? Maybe and maybe not. If everybody's property value goes up that should mean that the tax mill levy should stay a little bit less than it was before in order to maintain the same amount of money taking in. The Board of Equalization attempts to equalize values for like property and that's city boards, county boards, and then finally you end up with the state Board of Equalization. Budgets have more of an effect on mill levies and assessments and the overall tax bill for the property owners unless you gain a substantial increase in new property. As you increase new property values, as you build, buildings come up, businesses start, your tax base will go up and theoretically as you get more property to tax, your mill levy should go down. If your budgets allow that to happen. In other words, if you constantly need more money and normally that's the way it goes with the inflationary things, everything costs all costs go up. Then sometimes, yep, we have to raise taxes unfortunately. But budgets and taxable valuations need to work hand in hand.