1. The “2 percent tax cap” does not actually
limit a tax levy increase to 2 percent. It does mean, however,
that any increase above a certain amount requires 60 percent of
voters to approve the school budget.
2. That certain amount is called the “tax levy
limit” and will vary by school district.
3. The tax levy limit is determined by a
complex, eight-step formula that includes factors such as the
growth in the local tax base (if there is any), the previous
year’s tax levy, and the current and future years’ payments in
lieu of taxes (payments the Federal government and other
entities make to local governments instead of paying property
taxes).
4. The rate of inflation or 2 percent
(whichever is lower) is just one part of the “tax levy limit”
calculation. That is where the phrase “2 percent tax cap” comes
from.
5. After a school district calculates its “tax
levy limit,” it then adds exemptions into that amount. These
exemptions allow the district to propose a tax levy greater than
the amount set by the “limit” without requiring 60 percent of
the voters to pass the budget.
6. These exemptions — or factors that “don’t
count” against the cap — include voter-approved local capital
expenditures; increases in the state-mandated employer
contribution rates for teacher and employee pensions that exceed
two percentage points; and court orders/judgments resulting in
any amount that exceeds 5 percent of a district’s current levy.
7. Residents will vote on the school district
budget on Tuesday, May 15.
8. If a school district’s proposed budget
meets or stays below the “tax levy limit” (before exemptions),
only 50 percent plus 1 of voters (a simple majority) need to
vote “yes.”
9. If a school district proposes a budget that
includes a tax levy above its “tax levy limit,” you will see a
statement on the ballot because it is the law. You will also see
the statement on the school district website.
10. The new law applies to the tax levy, not
to tax rates or individual tax bills. What will happen to your
tax bill — how much it may go up or down — cannot be predicted
until a number of other factors are determined later in the
year, such as equalization, assessment rates and STAR
exemptions. School districts do not set individual tax rates.
As always, parents, staff, students and
taxpayers are urged to voice their opinions on these matters to
our elected leaders.
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