• Revenue
• Research
• Tax Statistics

# Table 3, Final Equalization Factors

The department is required to provide an equalization factor for each county that will equalize the level of assessment at the statutory level of 33 1/3 percent of the fair cash value. The level of assessment to be equalized is the mean, or average, of the urban-weighted medians of the three years immediately preceding the assessment year, after adjustment for assessment changes through the current assessment year.

The urban-weighted levels of assessment for the three years involved in the calculation of the equalization factor are shown in Columns 2 through 4. These levels have been adjusted for assessment changes, including those made by any board of review for the current assessment year. Column 5 indicates the mean of the urban-weighted medians for the three years. Column 6 shows the final equalization factor and Column 7 shows the equalized level of assessment.

## Formulas for Sales Ratio Studies and Equalization

Sales Ratio Coefficient of Dispersion (COD) Median Absolute Deviation (MAD) = Prior Year Assessed Value Current Year Sale Price X     100% = Average Deviation Median X     100% = Median Deviation Median of Sales Ratios X     100% = Number of Sales Ratios within 10% of the median Total Number of Sales Ratios = Sum of Assessed Values Sum of Sales Prices X     100% = Sum of the Sales Ratios Number of Ratios = Mean Assessment Ratio Sales-Based Average Ratio = Desired Level (33.33%) Prior 3-Year Average Median Level

## Examples of Statistical Calculations

### Distribution of sales ratios

AssessmentSale priceSales RatioAbsolute deviation from the median
\$ 9,000÷\$ 45,000=20%15
6,000÷30,000=20%15
9,000÷30,000=30%5
7,500÷25,000=30%5
7,000÷20,000=35%0
7,000÷20,000=35%0
6,000÷15,000=40%5
4,500÷10,000=45%10
7,500÷15,000=50%15
5,000÷10,000=50%35
Total \$68,500\$220,000355%85

### Calculations

(derived from above data)

Number of Transfers: Median: First Quartile: Third Quartile: 10 35 + 35 2 = 35% 30% 45% 20% 50% (50% - 20%) = 30%

### Coefficient of Dispersion (COD)

Sum of absolute deviations from the median: Average absolute deviation: 85 85 ÷ 10 = 8.5 Average absolute deviation Median = 8.5 ÷ 35% = 24.3%