Tax Levy Limitation or What is Proposition 2 ½
The FY 2013 Maximum Allowable Levy is $19,031,315 Tax Dollars
One of the most common misconceptions about property taxes among taxpayers is proposition 2 ½. Most people believe that proposition 2 ½ limits the increase in their individual property taxes by only 2 ½ % from the previous year. When in fact proposition 2 ½ limits the amount of total property taxes a community may raise from year to year by 2 ½. Proposition 2 ½ does allow exceptions in the form of new growth and overrides. The maximum amount of property taxes that can be raised each year is known as the Levy Limit.
New Growth…A community is able to increase its levy limit each year to reflect new development and other growth in the tax base that is not the result of revaluation. New Growth for FY 2013 is projected at $131,694.
Overrides…A community can increase its levy limit by successfully voting a debt exclusion or capital outlay expenditure exclusion.
In summary, the levy limit can increase from year to year in these ways: automatic 2 ½ percent increase, new growth and overrides.