The proposed bill, General Assembly Proposed Bill No. 5447, aims to limit annual property tax increases imposed by local government entities, including municipalities, special taxing districts, and regional school districts. The bill establishes a cap on these increases, set at the lesser of two percent or the increase in the consumer price index (CPI), with any negative changes in the CPI treated as zero. Additionally, the bill stipulates that new tax revenue from construction or value-increasing activities in the previous fiscal year will be excluded from the property tax increase calculations, ensuring that tax base growth is not penalized.

Furthermore, the bill allows for the cap to be exceeded through a supermajority vote by the legislative body or via referendum. It also permits entities to carry over any unused levy below the cap for one subsequent fiscal year and imposes penalties on entities that exceed the cap by reducing their cap for the following fiscal year. The overall purpose of this legislation is to support affordable home and business ownership by establishing clear limits on property tax increases.