This bill introduces a local tax cap for school districts, which will be voted on during the state general election in November 2026. It requires all towns and wards within a city to participate in the vote, which will limit local school district taxes to the previous fiscal year's amount, adjusted for inflation and new construction. Additionally, it sets a fixed cap on the central office administrative budget of the school administrative unit (SAU) at 6% of the combined appropriations of the school districts within the SAU, excluding bonded capital project costs. The question will automatically appear on the ballot without needing a warrant article or separate local legislative approval. The bill also includes provisions for public hearings, reporting results to the SAU board, and recount processes if requested by voters.

Furthermore, the bill specifies that districts without an annual meeting that have adopted a fixed cap must adhere to a budget that does not exceed this cap, with the option for a supermajority vote to override it. It establishes that no municipal tax rate can exceed certified limits and mandates documentation to the Department of Revenue Administration for compliance. The local tax cap and fixed cap will take effect with the fiscal 2028 budget, and taxpayers will have the right to enforce compliance in superior court. The bill ensures that existing, more restrictive property tax limitations remain unaffected and grants the Department of Revenue Administration authority to certify bonded capital costs and create necessary forms for implementation. The act is set to take effect on November 1, 2026.

Statutes affected:
As Amended by the Senate: 21-J:13