The first two entries in our Civics 101 series focused on speaking up at public meetings and understanding how ordinances become law. Now we want to dive into a term you’ve probably heard during this budget season: millage rate.
It’s a jargon-y way to describe the county or a city’s property tax rate, so we figured it was worth digging into the history of the term — and what it really means for the average taxpayer. We’re also going to explain how and why those rates can vary around the county.
So what is a millage rate?
This rate is essentially the property tax rate that a county, city or town charges property owners. And what you pay is based on the value of your property. So let’s say your town’s rate is about 5.50. That means a property owner will pay about $5.50 for every $1,000 the property appraiser says their house is worth.
And while some taxes impact all property owners (more on that in a sec) you pay the rate for the municipality where you live. But if you live in an unincorporated part of the 305, then you pay the county’s millage rate.
And where does that word millage come from?
So the mill part of millage comes from mills, and each one of those is measured as one one-thousandth of a dollar, or $1 for every $1,000. If you really want to impress your friends, Investopedia says the term comes from the Latin word “millesimum,” which means thousandth.
The county also has a solid guide to terms like millage and more that come up during budget season.
So how does this rate work?
So each local government, and entities like the Miami-Dade school board, spend the late summer months and September going over their budgets and deciding what the millage rate will be. The property tax dollars that come from that rate are the main factor in whether it changes or remains the same over time.
Cities and towns with high property values and plenty of other cash in their proposed budgets can generally afford to keep their millage rates pretty low. While municipalities that are more cash-strapped often have to raise their rates.
And are there rules for setting the rates?
Florida has set a ceiling of 10 mills in limiting municipal millage rates. So no municipality or other entity can go above $10 per $1,000 of taxable value.
Also, whatever your city or town decided as the proposed tax rate in its first budget meeting is essentially set in stone. Whenever they finalize the budget, the millage rate can’t go higher than that number, it can only be reduced.
What about other taxes?
If you’ve been to a budget meeting this month, you might have seen other terms like “debt service” being thrown around. And eagle-eyed attendees might have noticed that the millage rate that’s proposed and your actual projected tax rate look a little different.
Since the millage rate that your commissioners vote on is generally referring to the property tax rate, they may not dig into other taxes that we all pay for various services. Here’s a full table of what those could look like next year, based on where you live.
Your millage rate is what you pay on your property value, but there’s also millages (again, a.k.a. taxes) for things like the school board, the South Florida Water Management District, the Children’s Trust, fire rescue, and more.
And debt service is additional tax that comes if your city or town’s done any kind of major borrowing through something like a general obligation bond program. Miami Beach and Miami residents both voted to tax themselves through those programs in recent years, and that’s reflected through debt service.
So keep an eye on what the “total millage” is where you live in the 305 because it’ll definitely be higher than the rate your elected officials approve and what’s usually put up on power points or in agenda items.