School Tax Levy, Tax Rate and Tax Bills

  • Q: What is a school tax levy?

    A: The school tax levy is the total amount of money to be raised through school property taxes.

    Q: What is a school tax rate?

    A: The school tax rate is the dollar amount per $1,000 of assessed property value that a property owner pays in taxes.

    Q: Does the tax cap law mean school tax levies can’t increase by more than 2 percent?

    A: No, the law does not prohibit tax levy increases greater than 2 percent. The legislation requires every district to calculate its own “tax levy limit.” Two percent (or the rate of inflation, if less) is just one of eight factors in this calculation. The law also establishes a higher threshold of voter approval for a budget to pass if a district’s proposed tax levy increase (before exemptions outlined in the law) exceeds its individual “tax levy limit.”

    Q: What is a “tax levy limit?”

    A: For school districts, the “tax levy limit” is the highest allowable tax levy (before exemptions) that a school district can propose as part of its annual budget for which only the approval of a simple majority of voters (more than 50 percent) is required. Any proposed tax levy amount above this limit will require budget approval by a supermajority (60 percent or more) of voters.

    Essentially, the “tax levy limit” sets a threshold requiring districts to obtain a higher level of community support for a proposed tax levy above a certain amount.

    However, the legislation does not place a limit on any taxes a school district would levy to pay for expenditures related to specific “exempt” items, including some court orders, some pension costs and local capital expenditures. These items are then added to the “tax levy limit” to arrive at the “maximum allowable tax levy” increase.

    Q: How is the “tax levy limit” determined for school districts?

    A: The law dictates an eight-step formula that each school district must use to calculate its individual “tax levy limit.” In particular, the calculation adjusts a district’s tax levy to reflect growth in the local tax base (if any) and the rate of inflation or 2 percent (whichever is lower).

    Q: How will I know if my district is proposing a tax levy above its “tax levy limit,” requiring 60 percent voter approval?

    A: By law, any school district that proposes a budget that requires a tax levy (before exemptions) above its “tax levy limit” must include a statement on the ballot indicating this to voters.

    Q: How are school tax bills calculated?

    A: School tax bills are calculated (PDF) by using a property’s assessed value (as determined by the local town assessor) and the tax rate (amount paid in taxes per $1,000 of assessed value). Tax bills can also be affected by STAR exemptions or other exclusions for which individual taxpayers may qualify.

    Q: When are school tax bills printed and mailed?

    A: Individual school tax bills are printed and mailed to land owners on or close to September 1, and are due by October 1 to avoid a penalty.