The Board of Finance sets the Mill Rate for the Town every year. The mill rate is usually set in late March after the budget is finalized by the Town Council, however, per Town Charter, no later than May 29. The Mill Rate is based on the Town Council approved budget, estimated non tax revenues and the grand list. It is calculated based on the following formula:
Mill Rate = Current Tax Levy divided by Net Taxable Grand List
EXAMPLE: Tax Levy $ 115,000,000
Net Taxable Grand List $4,000,000,000
Mill Rate .02875
The mill rate is most commonly expressed as tax dollars per $1,000 of assessed value or in this example 28.75 mills (.02875 * 1,000).
The TAX LEVY is the annual budget approved by the Town Council less other non-tax revenues. Examples of Non Tax revenues include state grants, user fees, and investment income.
The NET TAXABLE GRAND LIST is the total assessed value of all taxable property (real estate, motor vehicles, and business personal property) as determined by the Town's Assessor. The Net Taxable Grand List equals the Total Gross Grand List less allowable exemptions.
The Mill Rate Calculation as stated above is a simplified version of the actual calculation. Other factors which influence the mill rate calculation include the Tax Collection Rate (which estimates uncollectible tax revenues), abatements and tax credit adjustments.