The current state-mandated 4% cap on annual town real estate tax increases will not protect us from further increases on top of the 4% if necessary – and they WILL BE necessary in order to service our massive bond debt, should the megabond be approved.

Below you will find the relevant statute language pertaining to this, from 2006, as amended. Here also is the full statute, as amended.

(c)(d) The amount levied by a city or town may exceed the five and one-half percent (5.5%) percentage increase as specified in subsection (a) or (b) of this section if the city or town qualifies under one or more of the following provisions:

(1) The city or town forecasts or experiences a loss in total non-property tax revenues and the loss is certified by the department of administration.

(2) The city or town experiences or anticipates an emergency situation, which causes or will cause the levy to exceed five and one-half percent (5.5%) the percentage increase as specified in subsection (a) or (b) of this section. In the event of an emergency or an anticipated emergency, the city or town shall notify the auditor general who shall certify the existence or anticipated existence of the emergency. Without limiting the generality of the foregoing, an emergency shall be deemed to exist when the city or town experiences or anticipates health insurance costs, retirement contributions or utility expenditures which exceed the prior fiscal year’s health insurance costs, retirement contributions or utility expenditures by a percentage greater than three (3) times the percentage increase as specified in subsection (a) or (b) of this section.

(3) A city or town forecasts or experiences debt services expenditures which are more than one hundred five and one-half percent (105.5%) of exceed the prior year’s debt service expenditures by an amount greater than the percentage increase as specified in subsection (a) or (b) of this section and which are the result of bonded debt issued in a manner consistent with general law or a special act. In the event of the debt service increase, the city or town shall notify the department of administration which shall certify the debt service increase above one hundred five and one-half percent (105.5%) of the percentage increase as specified in subsection (a) or (b) of this section the prior year’s debt service. No action approving or disapproving exceeding a levy cap under the provisions of this section affects the requirement to pay obligations as described in subsection (d) of this section.