Simple Definition
An equalization rate represents the average level of assessment in a community.
Complex Definition
An equalization rate represents the average percentage of total assessed value of taxable real property to total actual value of the property (as determined by the State survey) in a city, town or village.
An equalization rate of 20.00 means that, on average, the property in a community is being assessed at 20% of its actual value.  The words "on average" are bolded to emphasize that an equalization rate of 20% does not mean that each property in the community is assessed at 20% of its actual value.
Uses

• Distribution of several forms of state aid, such as aid to education and revenue sharing.
• Apportion school and county taxes among the various municipalities that must share in the support of these local government units.
• Calculate tax and debt limits placed on municipalities.

Why Equalization Rates May Go Over 100% After Revaluation
In the year that the new assessed values are put on the assessment roll, equalization rates may rise to over 100% if the community has decided to use 100% of actual value as its uniform standard.  That does not mean that the city or town is assessing property at more than its actual value.  Because the full value surveys upon with the equalization rates are based take several years to complete, the equalization rates represent the survey full value levels that existed several years earlier that the current market.  An equalization rate of 125 means that inflation and other economic conditions have increased values by about 25% between the survey used for the equalization rate and the revaluation assessment roll.