What is a Municipal Property Tax Levy Limit?
The Municipal Property Tax Levy Limit regulates the amount of money that municipalities can raise through property taxes. It applies only to property taxes used for municipal operations (road maintenance, libraries, parks and recreation, etc). It does not apply to property taxes raised for schools, counties, TIFs, or the overlay. The limit allows a municipality to increase property taxes, but only by an amount equal to the growth of its tax base. Tax base growth is estimated by the annual percentage growth in statewide personal income and local property development within the municipality. The limit is adjusted downward if a municipality receives extra money from the State that it can use instead of property taxes.
