How does the Headlee amendment affect local tax revenue growth?

The Headlee amendment significantly influences local tax revenue growth by requiring a rollback of property tax rates if the growth in assessed values exceeds the rate of inflation or the increase in the population. This mechanism is designed to protect taxpayers from rapid increases in property taxes that might occur due to rising property values. Consequently, when assessed values rise more than the predetermined limits, typically measured by changes in the Consumer Price Index, local governments must adjust their tax rates downward to comply with the amendment. This ensures a balance between generating necessary revenue for public services and preventing excessive taxation, thereby safeguarding the interests of property owners. Understanding this process is essential for comprehending how local governments manage tax revenues and the implications of property value assessments on tax rates.