Understanding the 2% Tax Cap

The law that places restrictions on how much a school district may levy in taxes in a given year is not simple, and requires a close examination in order to gain a complete understanding. The calculation of the 2% "tax cap" is a multiple step process, and is not simply taking a previous year's household tax bill and multiplying it by 2%. Instead, a school district must follow a prescribed set of steps when calculating its tax levy for the next year. Therefore, it is very possible that, after a school district has calculated its maximum tax levy, the school tax bill for a particular household could be above 2%. Another way to state it: the 2% tax cap affects the amount of funding a school district can levy across the district in a given year, and is not a cap on an individual homeowner's tax bill.

The information below provides the reader with details about the new law.