No. Proposition 2½ sets a limit on the entire tax levy for a jurisdiction. While there is a limit to the overall increase in property taxes, the revaluation program may result in increases or decreases in property taxes. Proposition 2½ established a limit on the revenue a municipality can raise from property taxes. Proposition 2½ does not limit the amount by which an individual tax bill may change from year to year.
The revenue that is collected from the property tax is called the property tax levy.
The levy is limited as follows:
- Limit 1 - Levy Ceiling
The property tax levy cannot exceed 2½% of the total assessed value of the municipality. For example, if a municipality is valued at $100 million, it could only raise $2.5 million from property taxes.
- Limit 2 - Levy Increase Limit
If the actual levy is less than the levy limit, the levy may only increase by 2½% above the prior year's levy after making an adjustment for new growth.