“LD1” Levy Limit Calculated Annually

Training for: Legal Notes

We want to again remind members that every municipality’s “LD 1” levy limit must be calculated each budget year using the formula set out in 30-A M.R.S. § 5721-A.

The starting point for calculating the current year’s levy limit is the previous year’s levy limit. That number is then adjusted by several factors to arrive at a new levy limit for the current year. A worksheet to assist in calculating the 2023 limit (prepared by MMA’s Advocacy & Communications staff) is available on MMA’s website under “State & Federal Relations Resources” (https://www.memun.org/Legislative-Advocacy/Resources ).

If the proposed municipal budget exceeds the new levy limit, the voters must: (1) reduce the budget, (2) vote to “exceed” the levy limit, or (3) vote to “increase” the levy limit. See “LD 1 Revisited,” Maine Townsman, Legal Notes, March 2015, for more details and sample warrant articles.

Confusion about the impact of a vote to increase the levy limit has persisted in recent years. Because such a vote increases the limit permanently, some members have mistakenly believed it was unnecessary to revisit the LD 1 threshold in succeeding years. However, a vote to increase the levy limit only increases the current year’s levy limit permanently and is only “permanent” in the sense that the increased limit becomes the starting point for calculating the next year’s levy limit. A new levy limit must still be calculated each budget year. (By S.F.P.)

We want to again remind members that every municipality’s “LD 1” levy limit must be calculated each budget year using the formula set out in 30-A M.R.S. § 5721-A.

The starting point for calculating the current year’s levy limit is the previous year’s levy limit. That number is then adjusted by several factors to arrive at a new levy limit for the current year. A worksheet to assist in calculating the 2023 limit (prepared by MMA’s Advocacy & Communications staff) is available on MMA’s website under “State & Federal Relations Resources” (https://www.memun.org/Legislative-Advocacy/Resources ).

If the proposed municipal budget exceeds the new levy limit, the voters must: (1) reduce the budget, (2) vote to “exceed” the levy limit, or (3) vote to “increase” the levy limit. See “LD 1 Revisited,” Maine Townsman, Legal Notes, March 2015, for more details and sample warrant articles.

Confusion about the impact of a vote to increase the levy limit has persisted in recent years. Because such a vote increases the limit permanently, some members have mistakenly believed it was unnecessary to revisit the LD 1 threshold in succeeding years. However, a vote to increase the levy limit only increases the current year’s levy limit permanently and is only “permanent” in the sense that the increased limit becomes the starting point for calculating the next year’s levy limit. A new levy limit must still be calculated each budget year. (By S.F.P.)