The bill amends Section 44-5-2 of the General Laws regarding the maximum levy of local taxes by cities and towns. It establishes a tiered structure for tax levy increases, allowing cities and towns to levy taxes at varying percentages above the previous year's certified amount, starting with a maximum of 5.5% through fiscal year 2007 and decreasing to 4% in fiscal year 2013 and beyond. The bill also includes provisions for cities and towns to exceed these caps under certain circumstances, such as experiencing a loss in non-property tax revenues, emergencies, or significant growth in tax base due to new construction.

A significant insertion in the bill is the provision that allows the town of Jamestown, while using a financial town meeting, to approve an annual budget that includes a proposed levy increase exceeding the specified percentage increases, provided that this increase is clearly listed in the budget approved by voters. This exemption from the four percent property tax levy cap is a key aspect of the bill, which aims to provide more flexibility for Jamestown in managing its tax levies. The act will take effect upon passage.

Statutes affected:
1044: 44-5-2