Yes, Proposition 2½ contains several provisions for an increase in the tax levy limit.
The levy limit can be increased by 2½% each year. This percentage increase is less than the annual rate of inflation for each year since the adoption of Proposition 2½.
The levy can be increased by the value of the new construction and newly taxable parcels. This provision ensures that the town can recover additional service costs resulting from new taxable projects.
The levy can be increased by the adoption of an override. An override provision allows the voters of the town to raise additional revenues (or to reduce the levy) by a specific amount. This can be accomplished by placing an override question on the ballot in a general or special election and approving the measure by a simple majority of voters. The increase approved by the voters then becomes part of the base for the calculation of future years' levy limits.
It is important to consider, however, that Proposition 2½ also mandates the property tax levy limit for any given year can never exceed the property tax levy ceiling (which is again, 2½% of the assessed value of all taxable properties within the town. An override of the Proposition 2½ levy limit does not allow the levy to exceed the levy ceiling.
The levy can also be increased by the adoption of the debt exclusion. The exclusion provision allows the voters of the town to exclude bonds or debt issued for municipal capital improvements for a specified period of time.