Children watched glumly on July 14, 1992, as Dracut officials hanged a "CLOSED" sign on
Moses Greeley Parker Memorial Library.
The previous day, voters had refused to pump $250,000 into
the library, a victim of a tightened town budget, reduced state aid and a national recession.
The library stayed closed for six months.
"It was a depressing time for the community, and one that
won't go down as a bright time in its history," says Susan Schwarz, the library's director since 1990.
But, residents had made the choice. For many residents, it
was their first encounter with Proposition 2½, the law that restricts the growth of property taxes.
Voters approved Proposition 2½ in 1980, and it went into
effect 20 years ago today. Opponents looked at the law as a fiscal Armageddon: massive layoffs would ensue; needed
services would be eliminated or drastically cut; high school sports would vanish; children
would be walking miles to school each day rather than ride buses.
But to proponents, Proposition 2½ was overdue discipline
imposed on government that treated tax dollars like a bottomless well.
To Schwarz, the library director, it was a measure that made
her do the unthinkable.
"It was probably one of the things I don't want to remember,
having to turn away children, and that's not my job," she says. "I can't fault the people who said they couldn't afford the
override. It was an economically horrible time. I can understand it, but that doesn't mean I
can believe it," she says.
To others, it was the product of heavy-handed government,
the overbearing uncle whom we learned to live with.
"One reason people can live under 2½ is inflation is
low," says John Robertson, deputy legislative director for the Massachusetts Municipal Association, which represents city and
"But if inflation gets up to 5 or 7 percent, the gap between
normal costs and what communities can receive gets stressful. That's why in the past, when inflation was higher,
there were proposals to change Prop 2½," he says.
Then there are the converts.
"I was against it, but right now, if anyone tried to take it
away, I'd fight for it -- to death," says Warren Shaw, a Dracut selectman for 23 years. "Local municipal officials have become
better at budgeting and it's probably been the thing that's brought about many changes in the
Dracut has since adopted a strong town manager form of
government, one that purportedly makes the budget-setting process more participatory.
"But the biggest thing it's done is forced the state to pick
up a large share of services, particularly education. From my standpoint, that's a good thing," Shaw says.
Tewksbury Selectman Joe Gill also was leery of Proposition 2½. But unlike Shaw, Gill
says the law has been a failure.
"It's made government lazy. The government always tries to
spend the most it can, and at 2½ percent above last year's level it became an easy way to get money whether it was
needed or not," says Gill, who served on the budget-preparing Finance Committee when
Tewksbury and other communities were grappling with budget cuts, which some contend
were caused, if not exacerbated, by Prop 2½.
To those who still feel unduly hampered by the constraints
of Prop 2½, proponents ask them to recall the days when property taxes fluctuated unpredictably and spending was out
"There was a structure and custom to state and local finances in the years prior to 2½.
Cities and towns relied heavily on property taxes while state aid was not a main
component of spending," says the MMA's. "Keep in mind that after 20 years, Prop 2½
is part of the whole pattern of how state and local finance is done in Massachusetts. Clearly what
we saw (since 1980) was a new state commitment to local aid. The downside of reduced reliance on
property taxes is that state aid is less stable while cities and towns have to project
Prior to its passage, critics called the law the "Mad As
Hell Vote." The anger was embodied in Barbara Anderson, the housewife-turned-executive director and lightning rod spokesman
of Citizens for Limited Taxation. CLT is the nonprofit anti-tax grassroots group that collected
the signatures to put the question on the 1980 ballot.
Anderson, a Pennsylvania native who was incensed in the late
1970s about rising taxes in the face of reduced municipal services, laughs as she recalls how the Boston Globe predicted
ominously that legions of disabled veterans would lose their benefits.
"I said, 'What about the disabled vets who can't afford
their property tax and could lose their homes?'" she says.
"The major benefit of Prop 2½ is voter control," Anderson
But did Prop 2½ give control over taxation back to the
Tewksbury's Gill said municipal budgets in pre-Prop 2½
days were balanced and hammered out by a bevy of accountable elected officials and ultimately approved by the
unquestionably democratic Town Meeting.
But Anderson says budgets were built on the backs of taxpayers who weren't privy to the
"Once we got the cuts and adjusted the education budgets to
suit the declining student population -- believe it or not, the number of students was declining then -- and once we got
through the initial years, the biggest benefit was voter empowerment, the fact that elected
leaders in every community have to ask or remind themselves, 'Who's in charge here?' They
have to make their case with the voters. You used to hear about the arrogance of local
officials, that they don't listen," Anderson says.
Under Prop 2½, if a community wants a new school, expanded library or bigger budget for
police or ambulance service -- and if such an expense would exceed the 2½
percent limit -- proponents may mount a campaign to pass a general override or debt exclusion override.
Passage requires approval at Town Meeting, then a special
election with ballots.
The general override expands the levy limit permanently
while a debt exclusion does so only for the duration of the debt incurred for a specific project. Both expand the levy
limit and result in raising taxes for the purpose of building tax revenue.
But even though the overrides and debt exclusions that go
hand-in-glove with the law appear to place the ability to raise taxes with the majority of a community's voters, Anderson said
the CLT opposes all overrides, regardless of the projects they fund.
"We like the concept of voter approval, but not voting to
raise my neighbor's taxes. If a majority wants to spend their money that way, that's how the majority works. But once it's
on the ballot, we support a no vote," says Anderson.
CLT occasionally lobbies to defeat override attempts. CLT
has 8,000 supporters in its data bank and four full-time paid leaders, including Anderson, who takes a $34,000 salary.
An unofficial part of the Prop 2½ package, and the reason
some say the measure became palatable, was the wholesale increase in state aid to local communities. CLT and the
Massachusetts Municipal Association teamed up to lobby for greater spending.
At the time in Massachusetts, we got lot less from the state
than other states," says Anderson. "The state was the target as much as cities and towns. The way we see the world,
(control over taxes goes) to the individual, second is the local community and third the state.
We prefer to see our money sent back to the communities."
The Prop 2½ package also eliminated school autonomy, a
law that prohibited non-school officials from reviewing and possibly cutting school budgets.
"That's where the non-accountability was, and that's why
schools appeared to have taken hits," says Anderson, adding that eliminating school autonomy "was inevitable and the right
thing to do."
Its name is usually spoken with a tone of weariness by
public officials, in particular, by school committees battling to keep budgets and services intact.
The tax-saddled homeowner, who may favor one or more of
those budgets, probably praises the 1980 state law that limits the amount of new local taxes raised annually to 2.5
percent plus growth.
It's the 20-year anniversary of the implementation Proposition 2½, the bane of bedroom
community government, but possibly a boon for cities.
Ashburnham Selectman Ronald W. Reed said the measure has had
a big impact on his town and in small towns in central and western Massachusetts in general.
"We have learned to live within it. But our vendors don't
necessarily raise their fees by 2.5 percent a year. The risk of living in a bedroom town is that you may not have services,"
Costs and inflation rise annually at more than 2.5 percent.
In Ashburnham health and liability insurance alone increased by 18 percent in Fiscal 2002.
Add to that, an effort to disband county government. In
Worcester County cities and towns are now forced to pay rising retirement costs for former county workers, while the state
government scooped up the assets, Reed said.
Water and sewer are user-based services, paid by customers,
and that is the only way it could have been done, Reed said.
"But police, fire and highway services can't be user-based.
People can't say they don't have to pay for a cruiser if it doesn't drive by their house," Reed said.
Town vehicles and equipment are kept longer than recommended, with attendant repair bills,
and building maintenance budgets the first to go in fiscal crisis.
The foundation of Ashburnham's historic Steven's Memorial
Library leaks and needs replacing on three sides, its Fairbanks Memorial Town Hall needs painting, and there is little
money to take care of parks and playgrounds.
But the state mandates towns to fund schools at a minimum
level, in spite of what many say are out of control special education costs.
The fault is in the formula the state Department of Education uses to determine school
spending, generating massive budgets which take up more of a town's operating budget each
year, he said.
"I think that formula is extremely unfair to regional
schools, because it looks at each town as having equal value, and that's not the case," Reed said.
Ashburnham goes right up to the levy limit every year, and
annually voters place override and debt exclusion questions on the ballot to fund projects.
"But it's still not enough, and the voters just say no,"
A debt exclusion allows taxes to be raised above the tax
levy limit to fund a project, and then expires when the debt is paid. An override raises taxes by the amount requested, and
then becomes a permanent part of the formula used to determine the tax rate.
Since 1983, Ashburnham voters have said no to 16 overrides,
and yes to three. They said no to four one-time capital exclusions this year. Since 1990 they said yes to 72 one-time
debt exclusions and no to nine.
Debt exclusions have become a customary method to fund
everything from fire truck to road repairs.
With a $551,515 Proposition 2 1/2 school override on a
special election ballot this month, the second of the year, Reed said tax revenue wasn't enough to fund municipal
government this year.
"I was recently talking to selectman from Marshfield. They
have $10 million in their free cash account. They don't have to worry about Prop 2½," he said. Ashburnham had just over
$59,000 in its stabilization fund as of June 2000.
"I think it's the old story that the state capital is in
Boston and they think Massachusetts ends just outside of Route 495," Reed said.
The city of Leominster has never reached the 2.5 percent tax
levy limit, said Mayor Dean J. Mazzarella.
"I will say one thing. Prop 2½ has forced municipal governments to look at the roots of
doing business and focus on costs," Mazzarella said.
The city has $6 million in excess levy capacity, and hasn't
had to go to voters for overrides to fund anything, he said.
"Even with Prop 2½ though, the elderly have a hard time
keeping pace with their taxes," Mazzarella said.
Leominster has a mix of commerce, industry and residential
property, so the entire burden of taxes is not set upon homeowners.
That is a factor that may place cities at an advantage over
Fitchburg has had one override and one debt exclusion, both
of which failed at the polls, said Councilor at large Dan H. Mylott.
"It's worked well for the property owner. It's made property
affordable. That vote was a landmark to limit taxes that were geting out of control. And the state has increased local aid,
so it's not adversely harmed us," said Mylott.
Fitchburg is poised to spend $89 million this fiscal year. State aid has increased 66 percent
from 1981, he said.
Barbara Anderson, the principal mover and shaker in changing
the identity of "Taxachusetts," is the director of Citizens for
Limited Taxation, the non-profit grass-roots organization that placed the tax levy limit before voters.
"I came here from another country, and as a Navy wife I've
lived all over the U.S. So, I knew it was possible for municipal government to offer good services without having
taxes that were 81 percent higher than the national average," Anderson said.
Proposition 22½ wasn't really a new idea, she said.
A group tried to pass a similar measure in the 1920s when
they realized that local governments were becoming over-reliant on the property tax.
"Then the state passed an income tax to alleviate the local
tax. Then we had an income tax and property tax. Then we passed a sales tax and we had a property, state and sales tax.
Then the state tried the state lottery to alleviate lower property taxes and fund schools. It just
got out of hand," Anderson said.
The doomsayers lost the battle to defeat the legislation,
and dire predictions of lost services to the state vulnerable populations fell on deaf ears.
Anderson remembers people were marching in the streets to
protest the passage of the bill in the eight months between the ballot and the start of the fiscal year.
"I saw a photo of a stack of bills filed in the state
legislature being carried by someone into the chambers that reached the man's face. They were attempts to repeal it,"
Eventually legislators sharpened their pencils and came up
with a plan to provide state aid to cities and towns.
Anderson said the strongest effect of the bill's passage was
to remind government officials who was really in charge: Voters.
The return of financial power to voters has engendered a new
relationship between local government and citizens, one of respect, she said.
"People used to complain about how arrogant local politicians were. But we never hear that
now. It's probably because those politicians know they may have to ask voters to
fund something," she said.
The citizens group rarely hears complaints from cities, and
finance committees will contact them for information.
"Assessors and tax collectors are actually relieved, because
people used to blame them for high taxes. Now they can blame Proposition 2½," she said.
Any visitor to a town meeting may observe how easily a small
number of voters will place a Proposition 2½ override on a special election ballot.
The same visitor to a polling place would also observe the
large number at the polls that frequently defeat the question.
Town officials often comment that voters at the election
haven't taken the time to become informed about an issue for which an override is requested.
Anderson doesn't hesitate.
"I wouldn't begin to describe the voters at a town meeting
as more informed than voters at the ballot. What I usually see is people representing special interests who come just to pass
one article, and then leave," Anderson said.
Voters don't have to understand much to know what they can
afford, she said.
It's not perfect, she admitted.
Regional school systems with one wealthy and one less than
affluent member do suffer. But she said before Prop 2½ passed, it was possible for the wealthier member of the school
district to bully the other to pay more than it could afford.
The bill wasn't designed to assist small towns, but was
targeted for medium-sized ones.
"We're working on a solution. We'd like to pass a bill that
would place a box on people's tax bills so they can voluntarily pay more taxes. It's such a foreign concept, paying more taxes,
but people donate to charities all the time," she said.
Citizen's for Limited Taxation is opposed to both overrides
and debt exclusions.
"We don't feel that we should raise our neighbor's taxes,"
Anderson said the group is also working on a broader-based
tax which would require state government to fund schools, and give voters vouchers to pay the school of their choice.
That would take school funding off the property tax all
together, she said.
Citizens for Limited Taxation released the results of a
20-year study on the effect of Proposition 2½ Wednesday.
Copies are available on the Web site: http://cltg.org