The taxable value can increase from year to year by 5.0% or the amount of the consumer price index, whichever is less. Additions or losses to the property are also taken into consideration. The formula is the previous taxable value, minus losses, x 1.05 % or the consumer price index, whichever is less, plus any additions = Capped Value 

The Taxable Value is the lower of the State Equalized Value or the capped value. The taxable value is then multiplied by the millage rate to produces the amount of tax dollars. The taxable value was created upon the passage of Proposal A, by the electorate in 1994.