For a local unit with a tax rate exceeding $.10, what is the maximum allowable increase in tax levy for the upcoming budget?

In New Jersey, local municipalities are subject to the cap on property tax levy increases, which is designed to control the growth of property taxes for residents. For local units with a tax rate exceeding $.10, the law allows for an increase of up to two percent of the previous year's levy in the upcoming budget. This two percent cap helps ensure that tax increases remain manageable for taxpayers, promoting fiscal responsibility within local governments.

The rationale behind this specific increase limit is to balance the need for maintaining revenue for essential services while also considering the financial burden on property owners. Additionally, there are some exceptions and adjustments that municipalities can make under certain circumstances, but the default maximum increase when starting from a base exceeding $.10 is indeed two percent. This regulation reflects the state’s commitment to curtail excessive tax growth while maintaining adequate funding for various local services.