Chapter Eleven
Questions and Exercises
Booneville 4.625 2,775
Examination Questions
1. Fractional assessment refers to:
2. If a city is taxing property at the maximum rate allowed and then the assessed
valuation of property in the city increases, which of the following can be expected to
happen if the state does not allow an increase in the property tax levy?
3. Which of the following would ordinarily not be taxed in a local property tax?
4. In a traditional mass cyclical assessment system, which of the following occurs?
5. Two cities are identical in all respects except City A has an assessment ratio of 100% and
City B has an assessment ratio of 25%. Both cities need to raise $1,000,000 in property
tax revenues. The statutory tax rates on property are:
6. A residence in Sullivan County has gross assessed value of $15,000. Its owner
qualifies for an old age exemption of $1,000 and a homestead exemption of $2,000. The
property tax rate is $5.00 per $100 of assessed value. What will the property tax bill equal
on this property?
7. City X reassesses a portion of the property within its borders every year, on a rotating
basis. This method of updating the assessment roll is referred to as:
8. Which of the following does not constitute a property tax relief measure?
USE THE FOLLOWING DATA TO ANSWER THE NEXT FIVE QUESTIONS.
Swamp City contains the following properties:
Parcel Assessed Value Market Value
Residential
R-1 20,000 80,000
R-2 20,000 100,000
R-3 36,000 120,000
R-4 28,000 160,000
R-5 65,000 200,000
Commercial
C-1 90,000 200,000
C-2 160,000 400,000
C-3 200,000 400,000
C-4 300,000 1,000,000
C-5 800,000 2,000,000
Industrial
I-1 1,000,000 2,000,000
I-2 1,700,000 4,000,000
I-3 5,750,000 10,000,000
All property is currently taxed at 3% of assessed value.
9. What is the average effective tax rate on residential property?
10. Which class of property has the highest effective tax rate?
11. Which parcel has the lowest effective tax rate?
12. What is the coefficient of dispersion for residential property?
13. Fractional assessment refers to:
USE THE FOLLOWING DATA TO ANSWER THE NEXT TWO QUESTIONS.
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.
14. What is the nominal tax rate in Hicksville?
15. What is the effective tax rate in Hicksville?
16. “Welcome Stranger” assessment occurs when:
17. If a city is taxing property at the maximum rate allowed and then the assessed valuation
of property in the city increases, which of the following can be expected to happen if the
state does not allow an increase in the property tax levy?
18. Tax Increment Financing zones encourage economic development by:
19. The selling price of a house may not be exactly equal to the correct value of the house for
tax purposes. Which of the following would not be a possible reason?
20. Circuit breakers may be generally preferable to exemptions as a means of property tax
relief because:
21. The Mundane County Council has the following information concerning the upcoming
fiscal year’s budget:
Planned Expenditure $ 22,550,000
Sales Tax Revenue 4,000,000
Total Market Value of Property 781,250,000
User Charge Revenue 3,250,000
Income Tax Revenue 1,600,000
Miscellaneous Revenue 1,200,000
Assessment Ratio 50%
To balance the budget, the Council will set the property tax rate at:
22. In a traditional mass cyclical assessment system, which of the following occurs?
23. Which of the following is not a reason why assessed value for a parcel of real property
might not equal estimated current market value?
24. A statewide property tax levy freeze:
25. The Supreme Court case Nordlinger v. Hahn tests: