My tax bill went up by more than 2 1/2%, so much for the law. I think someone commented on that or wrote it and sent it to me via the old electronic mail system. One of the more popular myths out there of the under educated populace. No disrespect to anyone, but unless you spend most of your time reading on this subject along with many others or are a professional in some way with regards to these things, that is an easy position to be in, my self included. So i will try to shed some light on these items by putting some information forward on the subject as well as sources where you can go to read it all if you are so inclined. So here is some more information concerning prop 2 1/2 and it comes from "A primer on prop 2 1/2 from the MA DOR, division of local services"

Levy Increases
 Once a community’s levy limit is established for a particular year, the community can determine what its levy will be. The community may set its levy at any amount up to the levy limit. (Or, if it has voted a debt exclusion or capital outlay expenditure exclusion, it may levy up to the levy limit plus the additional temporary capacity resulting from the exclusion.) It is important to note that as long as a community levies no more than its levy limit, there is no restriction on the dollar increase or percentage increase in its levy from year to year. Proposition 21 ⁄2 restricts increases in the levy limit, not the levy. A community is permitted to tax up to its levy limit, even if it must raise its levy by a large percentage over the previous year’s levy. For example, a community could decide to increase its levy between FY2007 and FY2008 because the people of the community feel that the town should respond to some unmet local needs.

 Below we highlight the community’s FY2007 and FY2008 levy limits and levies:

 FY2007 Levy Limit = $1,000,000
 FY2007 Levy           = $   900,000

FY2008 Levy Limit = $1,025,000
FY2008 Levy           = $1,025,000

Percentage Change In Levy Limit = 2.5%
Percentage Change In Levy = 13.8% From FY2007 to FY2008,

 the community’s levy limit only increases by the allowed 2.5 percent. (In this example assume the community has no new growth and has not voted an override.) The community’s levy increases from the FY2007 amount of $900,000 up to its FY2008 levy limit of $1,025,000. This is a total dollar increase in the actual levy of $125,000 — and a percentage increase in the actual levy of 13.8 percent. From FY2007 to FY2008, the actual levy increases by 13.8 percent while the levy limit only increases by the allowed 2.5 percent. It is important to note that the 13.8 percent increase described here is allowable under the provisions of Proposition 21 ⁄2. As long as the levy limit only increases each year by the amount allowed under Proposition 21 ⁄2, the actual levy can increase or decrease within the levy limit established each year, as decided by the community. The community may increase its levy up to its new levy limit regardless of the percentage increase in the levy.

I hope this helps,
Jeff Bennett