What is Proposition 2 1/2?

Proposition 2 1/2 is a municipal administrative law to put a ceiling on the amount of taxes cities and towns can apply to property tax. The limits are a percentage of the cities and towns tax revenues can increase from year to year. The annual increase in total tax revenue of 2 1/2 is separate from the additional tax revenue that can be raised from new construction, additions, etc ("New Growth"). Proposition 2 1/2 has no relevance as far as tax increases on individual properties.  Proposition 2 1/2 is specific to the total amount of the taxes the Town can raise each year. For more information regarding Proposition 2 1/2 and  the Tax Rate Process here.