Under what circumstance can a local unit with a tax rate above $.10 exceed the two percent increase in tax levy?

A local unit with a tax rate above $.10 can exceed the two percent increase in tax levy primarily under certain emergency situations and specified circumstances. This provision allows municipalities to respond effectively to situations that could negatively impact public services or safety, such as natural disasters or other urgent needs, without being constrained by the typical limits on tax increases.

The framework is established to ensure that local governments can adequately fund essential services that may require greater financial resources beyond the standard levy cap. This flexibility is crucial for maintaining public welfare and addressing unforeseen expenditures that might arise throughout the fiscal year.

Such specified circumstances are typically defined in state legislation and can include factors like revenue shortfalls, major capital projects that cannot be deferred, or significant cost increases in mandated services. This regulatory approach prevents a rigid tax cap from hindering local units' ability to adequately serve their communities in times of need while still maintaining some level of oversight on tax increases.

Other options are less effective in this context as they either limit the reasons for exceeding the tax levy or do not encompass the broad range of emergencies that might necessitate additional funding.