1.__Appropriation limit established.__Notwithstanding any other provision of law, a municipality may not in any fiscal year make an appropriation, including amounts appropriated or allocated to reserves, except as otherwise provided in this section when that appropriation uses the revenues collected through property taxes levied by the municipality and when the appropriation would cause the municipality to exceed its property tax levy limit for the fiscal year.__A municipality's property tax levy limit for any fiscal year must be set at its property tax levy limit for the prior fiscal year multiplied by the following sum: one plus the income growth factor set forth in subsection 4 plus the municipality's annual property growth factor.__The annual property growth factor for a municipality is a fraction, established by the municipality, whose denominator is the total taxable valuation of the municipality for the tax year associated with the municipality's fiscal year and whose numerator is the amount of increase in the assessed valuation of any real or personal property in the municipality during the prior tax year that may become subject to taxation for the first time, may be taxed as a separate parcel for the first time during the current tax year or has had an increase in its assessed valuation over the prior year's valuation as a result of improvements to or expansion of the property.

2.__Scope.__Appropriation and property tax levy limits established in subsection 1 apply to any general fund appropriation of a municipality, other than appropriations and revenues related to tax increment financing districts or similar special tax districts pursuant to state law, but do not apply to expenditures related to the budget of a school administrative unit or county or to assessments or tuition expenditures properly issued by a school administrative unit or county of which the municipality is a member.

3.__Transition; extraordinary events.__The appropriation limit established in subsection 1 must become effective for a municipality for its first full fiscal year following the effective date of this section.

A.__For purposes of determining the property tax levy limit for the first fiscal year for which this section is effective, the limit must be set at the property tax commitment of the municipality for the fiscal year during which this section becomes effective multiplied by the following sum:__one plus the income growth factor set forth in subsection 4 plus the municipality's annual property growth factor set forth in subsection 1.