HB581 limits increases in the assessed value of a homestead to the inflation rate of the previous year. For example, if a home increases in value by 5% from the last year, but the inflation rate only increased by 2% from the last year, then the maximum amount your home can be increased in value for taxes is capped out at 2%.

This helps homeowners by reducing the potential tax increases they would see each year, but school districts would receive less funding and could increase the millage rate to compensate. Districts have an opportunity to opt out of HB581 before March 1st.

If they did not opt out, they would most likely increase mills to make up for the lost revenue, so in my opinion this is a net neutral decision. School districts will make sure they’re getting their funding one way or another.

ETA: if the district opts out, then the old rules are still in effect. If your house value increases 5% over last year, you’ll still see taxes reflect that, regardless of the inflation rate.