USE THE FOLLOWING DATA TO ANSWER THE QUESTION.
Hicksville has a proposed budget of $7,000,000 for the fiscal year. The city has an assessed value of $100,000,000 and will receive state aid of $100 per capita based on its 2000 census population of 15,000. Assessed value equals 25% of market value.

-What is the nominal tax rate in Hicksville?

Question

USE THE FOLLOWING DATA TO ANSWER THE QUESTION.
Hicksville has a proposed budget of $7,000,000 for the fiscal year. The city has an assessed value of $100,000,000 and will receive state aid of $100 per capita based on its 2000 census population of 15,000. Assessed value equals 25% of market value.

-What is the nominal tax rate in Hicksville?

Quizplus · Accepted Answer

The nominal tax rate is calculated by dividing the total budget needed by the total assessed value of the city. First, calculate the total budget needed after accounting for state aid: State aid = 15,000 people * $100/person = $1,500,000. Therefore, the total budget needed from taxes = $7,000,000 - $1,500,000 = $5,500,000. The assessed value of the city is $100,000,000. Thus, the nominal tax rate = $5,500,000 / $100,000,000 = 0.055 or 5.5%.