CLT
UPDATE
Friday, November 4, 2005
HAPPY
25TH BIRTHDAY PROPOSITION 2½
!
November 4, 1980 - November 4, 2005
Proposition 2½ was passed by voters on
Nov. 4, 1980. It was a revolution, a passionate and controversial ballot
campaign; now, 25 years later, it is an institution.
Yes, once upon a time the property tax burden was the second-highest in
the nation, which called us Taxachusetts....
A new study by CLT, available on its website,
www.cltg.org,
tracked the property taxes of nine individuals and families, including
me, before and after Prop 2½. I pay $3,109 on my five-room cottage in
Marblehead, assessed at $376,400 this year. If I had to pay the same
annual increase I was paying during the 1970s, my taxes would be $6,710.
The Boston Globe
Friday, November 4, 2005
Celebrating Prop 2½
By Barbara Anderson
Once an initiative petition, then a
controversial ballot question, Prop 2½ is now an institution....
Prop 2½, though generally beloved, has occasionally been misunderstood.
Here are three of the most prevalent examples....
However, Prop 2½ cut the auto excise by 62 percent, and property
taxpayers have saved a bundle.
The Boston Herald
Friday, November 4, 2005
Let the party continue for tax savings
By Barbara Anderson
Here's a scary thought for Halloween:
What if Proposition 2½ had not been passed by the voters on Nov. 4,
1980? ...
The property tax limit may still scare people who like unlimited taxes,
but it's safe to say that all homeowners, renters and drivers have saved
a bundle over 25 years.
Happy Halloween-week birthday, Proposition 2½ — and many more.
The Salem News
Tuesday, November 1, 2005
Tax limits have put more money in your pocket
By Barbara Anderson
Twenty five years ago this week,
voters put their leaders in their place....
The law is known as Proposition 2½, and it's as powerful today as it was
a quarter of a century ago....
But the doom-and-gloom forecasts before Nov. 4, 1980 never really
materialized. Crime did not become widespread, fires did not engulf
entire communities and our kids continue to receive an excellent
education. Just this month, Massachusetts students were rated tops in
the nation in English and math....
The voters' message was that powerful. If there's one law that's a
sacred cow in Massachusetts, it's Proposition 2½.
The Attleboro Sun-Chronicle
Monday, October 31, 2005
3 cheers for 2½
By Mike Kirby
A taxpayer revolt swept into
Massachusetts on Nov. 4, 1980, hot on the heels of a similar uprising in
California two years earlier. Despite nearly unanimous opposition from
legislators, Bay Staters handily approved drastic changes in the way
cities and towns collect taxes.
Proposition 2½, a citizens petition championed by a group called
Citizens for Limited Taxation, permanently altered the conduct of local
government....
While the new law also substantially decreased the automobile excise tax
and changed the way police and fire contracts are negotiated, its
primary goal was stabilizing and reducing property taxes. And for the
most part it has worked....
Since 1983, overrides have been requested 3,509 times statewide and
rejected 2,136 times, a failure rate just over 60 percent...
By giving voters the last word on sizeable budget increases, Prop. 2½
has stabilized property taxes, and made them more equitable. It's hard
to argue it has corralled local spending, however.
The Eagle-Tribune
Sunday, October 30, 2005
Law gave voters final say on how much cities,
towns can spend
Once again, false compassion is oozing
from the Statehouse.
No surprise there. Nor is it a surprise that it is aimed at one of the
three sacred demographic groups that are always invoked every time
politicians want to slip their hands a bit deeper into the wallets of
those who have to pay the bill for their kindness — senior citizens,
"the children" and "the less fortunate."
In this case, the pols are going for a two-fer. They contend that
legislation now pending is about property tax relief for those who are
both elderly and less fortunate.
Still, the hypocrisy should outrage us, even if it doesn't amaze us any
more....
When is it going to register with politicians about who is really less
fortunate here?
But of course, it does register. The pols know all this. Compassion for
seniors is just a cover to mask the real agenda — too much is never
enough.
The Eagle-Tribune
Sunday, October 30, 2005
Buying off the opposition with false compassion
By Taylor Armerding
This basic promise of equal opportunity and a
fair chance in life was seriously undermined 25 years ago. Proposition 2½
created a patchwork quilt, instead of a uniform blanket of opportunity, for
schoolchildren in Massachusetts.
Proposition 2½, passed by the voters of Massachusetts in 1980, limits the amount
of revenue that can be raised for schools and other essential community
services. It may have sounded reasonable at the time, but 25 years later, it's
time to take a look around....
By hindering a community's ability to pay for needed services, Proposition 2½
has had a devastating effect that voters 25 years ago surely did not intend....
Beyond the damage to homeowners' property values, whole communities have been
harmed....
Our state now ranks at the bottom in the amount of government spending as a
share of personal income. We are 43rd among states in K-12 spending, 37th in
public safety, and last among all 50 states in the share we invest in higher
education and in parks and recreation....
Voters 25 years ago made a decision that helped determine the quality of our
schools and our community life. That choice does not lie only in the past. The
citizens of this great state, today, have choices, too. We can — and must — do
better, Massachusetts!
The Salem News
Tuesday, November 1, 2005
Our children are chief victims of restrictive tax law
By Meg Ansara
Barbara Anderson's CLT
Commentary
Dear CLT members:
It has seemed in recent years that Prop 2½ has become
an institution, controversial only at the local level during override
campaigns. But the enemies of 2½ are still out there, biding their time.
Here is one, with my responses to her points of attack (in italics).
Our children are chief victims of restrictive tax law
By Meg Ansara
"Doesn't every child in Massachusetts deserve a
fair chance in life? That's the historic promise of the cornerstone of
American democracy — our public school system.
"A child of a fisherman, a child of immigrants, a child of a janitor —
all have a shot at admission to Harvard as long as they get a good
K-12 education in our public schools."
My response: So far, so good!
"This basic promise of equal opportunity and a
fair chance in life was seriously undermined 25 years ago. Proposition
2½ created a patchwork quilt, instead of a uniform blanket of
opportunity, for schoolchildren in Massachusetts."
My response: Where to start when debating someone who
doesn’t know much? The locally-funded property tax has always created a
patchwork quilt. That was the basis of the lawsuit, brought years before
Prop 2½ was even on the ballot, which argues that children in different
communities have different amounts spend on their education. CLT’s
longtime solution, vouchers funded by existing state taxes, addresses
this by giving each child in Massachusetts, no matter where he lives,
the same amount of money to spend on the school of his parents’ choice.
"Proposition 2½, passed by the voters of
Massachusetts in 1980, limits the amount of revenue that can be raised
for schools and other essential community services. It may have
sounded reasonable at the time, but 25 years later, it's time to take
a look around."
My response: Look around and what do you see: K-12
per pupil spending that is 4th highest in the nation, 35 percent above
the national average.
"Who could have anticipated, in 1980, the
multimillion-dollar cuts in state and federal dollars Massachusetts
communities have weathered in recent years?"
My response: Actually, we anticipated that pressure
from Prop 2½ would force the state to finally start sharing more of its
own revenues with the cities and towns. Before 1981, there were many
promises: if voters allow an income tax, sales tax, lottery, they will
be used to reduce property taxes. In 1981, we had all these taxes plus
the second highest property tax burden in the nation, 70 percent above
the national average, and very little local aid. Directly after Prop 2½,
local aid increased over 10%, and has increased almost three billion
dollars in 25 years. Most of this is earmarked for education. Since
state aid is erratic and growth limited during state fiscal crises,
communities should avoid overspending in good years.
"Who could have known the blow to budgets
delivered by double-digit increases in health-care costs?"
My response: It is important to note that taxpayers
also have trouble paying for heath care; raising their property taxes is
not a solution, health care reform is necessary for both individuals and
communities.
"Was anyone considering the boom we've
experienced in our state's school-aged population or the cost of
deferred maintenance for our aging roads and buildings?"
My response: Actually, at the time we were
considering the drop in our state’s school age population, during which
our property taxes kept growing. With school board fiscal autonomy
(which Prop 2½ repealed), school committees had to be given any amount
of money they wanted, no matter how much the school population declined.
"The arbitrary ceiling of 2.5 percent simply
does not match reality. Costs of the everyday services our communities
depend on — schools, police, libraries, public works — grow at a much
faster rate. Factors such as energy prices, health insurance rates,
and the cost of unfunded state and federal mandates are outside the
control of those who deliver these vital local services."
My response: The percentage was recommended by Warren
Brookes, economic columnist for the Boston Herald, who studied Prop 13
in California’s cut to 1 percent and computed that 2,5 percent would be
a better goal here. I’d be happy with the 1 percent though. The property
tax is regressive and especially hurts people on fixed incomes -– not
just the elderly, but people who don’t get annual pay raises or lose
their jobs.
There are two 2.5 percent ceilings. One is 2.5 percent of fair market
value, which keeps rising, so that most communities are taxing far below
that rate – because the second 2.5 percent allows the annual levy to
increase only 2.5 percent no matter how much values go up. But even that
2.5 percent isn’t a limit on revenue or spending, only on property
taxes, and it has often doubled with the provision for new growth. The
per capita average annual levy increase has been .06 percent after
inflation.
"By hindering a community's ability to pay for
needed services, Proposition 2½ has had a devastating effect that
voters 25 years ago surely did not intend. A study done at the 20-year
mark found that the measure actually lowers property values.
Researchers found: "The evidence is compelling that restrictions on a
community's ability to raise taxes did lower its property values."
(Lang and Jian, "Property Taxes and Property Values: Evidence from
Proposition 2½," August 2000)"
My response: Warren Brookes predicted in 1980 that
for every $1 saved in taxes, a property’s value would increase $10.
Anyone following the housing market here finds that more believable than
the study cited by Ansara.
"Beyond the damage to homeowners' property
values, whole communities have been harmed. Immediately after the
passage of Proposition 2½, many communities began making the first in
a long series of serious cuts to schools and other municipal services.
Class sizes have increased, textbooks have grown out of date,
educational offerings have been reduced, aging buildings have been
neglected, and critical police and fire services have been reduced to
dangerous levels.
My response: Because of the pre-Prop 2½ school
committee fiscal autonomy, local officials first looked at the
uncontrolled school budgets after Prop 2½. But we still have the 4th
highest per student spending in the nation. If the money is all going to
teacher salaries and pensions, instead of textbooks and infrastructure,
it’s not our decision. And overall, local spending has increased since
Prop 2½.
"Our state now ranks at the bottom in the amount
of government spending as a share of personal income. We are 43rd
among states in K-12 spending, 37th in public safety, and last among
all 50 states in the share we invest in higher education and in parks
and recreation."
My response: Our state’s per capita total tax burden
ranks 4th in the nation. Presumably it spends the money on something.
And we are 4th highest in K-12 per pupil spending.
"But not all schoolchildren are suffering
equally."
My response: This reminds me of the opponent during a
post-2½ debate who referred to “the suffering children of Wellesley.”
All communities, no matter how wealthy, complain that they can’t tax
more.
"In part thanks to Proposition 2½, our state
also leads the nation in the gap between our highest- and
lowest-poverty school districts. Children in more affluent communities
are educated with $1,343 more in public support than those in
struggling cities. Wealthier communities are more likely to muster the
support for overrides, widening the inequities that already exist."
My response: Another good argument for equal
education vouchers for each child.
"At a time when our economic survival demands a
better-educated work force, Massachusetts led the nation in 2002 to
2004 in cutting state funding for K-12 education. While most states
spared K-12 education from budget cuts during these two years, we were
one of four states that cut spending in both years. Massachusetts
education spending dropped by 7.2 percent, compared to a nationwide
average increase of 4.4 percent."
My response: But of course we start from a higher
base!
"In a study of the impact of state fiscal
policies on education, researcher Andrew Reschovsky found that 'the
combination of cuts in state funding for education, the inability to
adequately raise property taxes, and the rising costs of meeting new
performance standards suggests that over the next few years there will
be a significant increase in both the number of schools classified as
failing and the number of students receiving an inadequate
education.'"
My response: Education nationally needs more
accountability for the money its taxpayers spend, more choice for its
parents, less control by self-serving teachers unions.
"Proposition 2½ is a failed fiscal policy. It
has placed our communities on a roller coaster of uncertainty and made
them more vulnerable to economic downturns. Not only has it lowered
property values, it has created a structural deficit that is eroding
schools, public safety and other valued services."
My response: Prop 2½ is the best thing that ever
happened to Massachusetts. It has returned control of school spending to
town meeting and city councils, raised property values to incredible
levels, saved property taxpayers thousands of dollars, and helped dispel
the economy-damaging image of Taxachusetts.
"Stand for Children is a grass-roots movement of
everyday people who refuse to sit by while our children's future is
put at risk. We have helped pass Proposition 2½ overrides in Lexington
and Arlington to lower class sizes and restore educational programs
that had been cut. As a growing statewide organization, we are
committed to moving beyond a piecemeal approach to improving
children's chance in life. We welcome the involvement of everyone who
recognizes the failures of Proposition 2½, and who wants to work with
us to improve our state's investment in education."
My response: Stand for Children stands for higher
taxes on the children’s parents, grandparents, and neighbors, regardless
of their ability to pay.
"Voters 25 years ago made a decision that helped
determine the quality of our schools and our community life."
My response: Yes, we did. Good for us. Schools and
communities must now respect us, and should be grateful for the property
tax revenues we still pay, 8th highest in the nation.
"That choice does not lie only in the past. The
citizens of this great state, today, have choices, too. We can — and
must — do better, Massachusetts! Stand with us for children, and for
communities based on sound fiscal policies and a commitment to the
well-being of all."
My response: Stand with CLT for limited taxes,
respect from those we support with our taxes, and a stronger economy.
Meg Ansara is the Massachusetts state director for Stand for
Children, an Arlington-based organization describing itself as "a
citizen voice for children" that advocates "for improvements to and
funding for programs that give every child a fair chance in life."
|
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|
Barbara Anderson |
The Boston Globe
Friday, November 4, 2005
Celebrating Prop 2½
By Barbara Anderson
Proposition 2½ was passed by voters on Nov. 4, 1980. It was a
revolution, a passionate and controversial ballot campaign; now, 25
years later, it is an institution.
Yes, once upon a time the property tax burden was the second-highest in
the nation, which called us Taxachusetts.
Over the decades, taxpayers had been promised lower property taxes in
return for other revenue sources. So by 1980 we had a high income tax, a
sales tax, a lottery, and high property taxes. Further, we were one of
the few states with an automobile excise and something called school
committee fiscal autonomy, which gave local schools any amount of money
they requested regardless of the wishes of city councils or town
meetings.
On top of this, instead of getting a fair share of state tax revenues in
local aid, the cities and towns had to fund any new bright idea that
came down from Beacon Hill. On top of that, the courts had just ordered
all communities to comply with the state Constitution and assess all
property at its full and fair market value. Many homes were assessed
much lower; people imagined the community's existing tax rate being
applied to their home's true value.
Between outrage at broken tax relief promises and panic about the coming
revaluation, Proposition 2½ was born. Citizens for Limited Taxation
collected signatures on an initiative petition that limited property
taxes to 2.5 percent of a community's value, cut the auto excise from
$66 per $1,000 to $25 per $1,000, gave renters an income tax deduction,
repealed school committee fiscal autonomy, and forbade new unfunded
state mandates on cities and towns.
Battle lines were drawn: CLT, the Massachusetts High Technology Council,
the Massachusetts Auto Dealers Association, and the National Federation
of Independent Business against almost everybody else. Leading opponents
were the Legislature, the Massachusetts Municipal Association, the
Massachusetts Taxpayers Foundation, the Massachusetts Teachers
Association, and other public employee unions, various human service
organizations, the Massachusetts Council of Churches, the Catholic
Church, and, incredibly, the Massachusetts Association of Older
Americans.
Union fliers featured either a picture of a gun shooting backward,
titled "How Prop 2½ Works," or the heading "Cutting taxes? Or cutting
our throats?" Human service fliers featured a senior with a walker, a
young man in a wheelchair, and a couple of minority kids looking
terrified.
There were debates galore, hours of talk radio devoted to the issue,
yard signs, bumper stickers. The League of Women Voters held one-sided
forums that presented only its point of view: "Prop 2½ will cause
drastic cutbacks in basic public services."
Nevertheless, the people passed Prop 2½, 59-41.
Then the battle really began: public employee marches, demands for
repeal. But the Legislature, getting the message, decided to work with
the people's law. CLT teamed up with MMA, legislative Republicans, and
conservative Democrats to get more local aid. Town finance committees
finally had access to the overgrown school budgets.
With Governor Ed King promising a veto of any changes that would damage
Prop 2½, a sensible provision for new growth was added, and the 2/3 vote
for an override became a majority vote for various kinds of overrides,
intended for bonding projects or emergencies. Local officials were more
respectful of taxpayers whose support might be needed to pass them.
Local aid increased almost every year. Opponents who had prophesied the
end of the world looked silly.
Back then, of course, it was impossible to imagine voters raising their
own taxes for operating expenses and teacher pay raises. Twenty-five
years later, the property tax burden is still too high, at eighth in the
nation. The long-term goal, to get education spending off the property
tax, has yet to be realized. But individual taxpayers have saved a
bundle on both the property tax limit, the rental deduction, and the
auto excise cut.
A new study by CLT, available on its website, www.cltg.org, tracked the
property taxes of nine individuals and families, including me, before
and after Prop 2½. I pay $3,109 on my five-room cottage in Marblehead,
assessed at $376,400 this year. If I had to pay the same annual increase
I was paying during the 1970s, my taxes would be $6,710.
A family in Malden saved $5,834 this year alone. A recently married gay
couple in Saugus saved $2,173. A straight married couple who raised
three children in Scituate, $5,787. A widowed retired social worker in
East Bridgewater, $1,260. A former military family in Billerica, $2,400.
They all celebrate 2½, 25 years old this week.
Barbara Anderson is executive director of Citizens for Limited
Taxation, which created Proposition 2½.
Return to top
The Boston Herald
Friday, November 4, 2005
Let the party continue for tax savings
By Barbara Anderson
Proposition 2½ is 25 years old this week.
Once an initiative petition, then a controversial ballot question, Prop
2½ is now an institution. Older taxpayers remember that there was a time
when property taxes in Taxachusetts were the second highest in the
nation, 70 percnt above the national average. Younger taxpayers take the
levy limit for granted and only know that if their community wants more
taxes it has to ask voters for an override. C’est la vie!
Prop 2½, though generally beloved, has occasionally been misunderstood.
Here are three of the most prevalent examples.
Misconception One: Prop 2½ caused revaluation, and increasing the
assessed value of our homes was a way around it.
Fact: The Massachusetts constitution requires that all property be
assessed at full and fair market value. For decades, residential
property was assessed at only a portion of its value, with newer homes
and businesses usually valued higher than older homes so that they paid
more than their share of local taxes. Eventually some of those unfairly
burdened taxpayers in the town of Sudbury went to court, and in 1974 all
communities were ordered to revalue and assess all properties at full
market value. Prop 2½ was a race against revaluation, drafted to require
tax rates to drop as values increased.
Even today if a town were to double in value, the local tax rate would
be cut in half, so higher values do not mean higher taxes to a
community. Under Prop 2½, the levy is allowed to increase only 2.5
percent a year, plus a factor for new growth, and overrides if passed by
voters.
However, in communities where commercial/industrial property is taxed a
larger share of the total, recessions cause a shift from business onto
residential taxpayers.
Misconception Two: Proposition 2½ will be with us forever.
Fact: Prop 2½ is only a statute and can be amended or repealed by the
Legislature. However, while legislators initially opposed the initiative
petition and some of them filed bills attacking it, to the Legislature’s
credit most of them didn’t pass, and those that did were vetoed by Gov.
Bill Weld. It helps to have a supportive governor, and constant
vigilance.
Misconception Three: Proposition 2½ didn’t work. Fees were hiked, and my
taxes are still too high!
Fact. Yes, they are. After Prop 2½ passed, the property tax burden
dropped, but it is creeping up again and in 2002 was 8th highest in the
nation. When we drafted the override provision as a safety net, it
didn’t occur to us that voters would someday raise their own taxes, and
those of their neighbors on fixed incomes, to cover local operating
expenses and teacher pay raises.
The total per capita Massachusetts tax burden is still 4th highest in
the nation. Per pupil spending is also 4th highest. Our long-term goal,
to get education off the property tax, has not been realized, though
increases in local aid for education are moving us slowly in the right
direction. Fees increased, but they were increasing already before Prop
2½; unlimited governments can never get enough!
However, Prop 2½ cut the auto excise by 62 percent, and property
taxpayers have saved a bundle. A new study by CLT, available on its
website [www.cltg.org],
tracked the property taxes of nine individuals and families, including
me, before and after Prop 2½. I pay $3,109 on my five-room cottage in
Marblehead, assessed at $376,400 this year. If I had to pay the same
annual increase I was paying during the 1970s, my taxes would be $6,710.
Happy birthday, Proposition 2½!
Barbara Anderson is executive director of Citizens for Limited
Taxation.
Return to top
The Salem News
Tuesday, November 1, 2005
Tax limits have put more money in your pocket
By Barbara Anderson
Here's a scary thought for Halloween: What if Proposition 2½ had not
been passed by the voters on Nov. 4, 1980?
Citizens for Limited Taxation (CLT) recently hired Gerald Amirault to
research the impact of Prop. 2½ on some individual taxpayers, whose
assessed values and tax rates could be traced by their local assessors
back to 1970. Using an annual compounding factor, their average property
tax increase was determined for those 10 years prior to 1980, along with
their average increase in the 25 years since. From these figures we were
able to determine what they would be paying this year if Prop. 2½ hadn't
passed.
Of course this is a "what if" study. It could be speculated that if
Prop. 2½ had not passed, angry voters might have eventually abolished
the property tax altogether. Or after continuing years of the third
highest taxes in the nation, there may have been a population exodus and
property value decline.
The CLT study assumes a status quo over 25 years, with compliant
taxpayers, and property values that increase despite the tax burden on
owners.
Since government can never get enough, so it is assumed that even
without Proposition 2½, the trend toward higher user fees, particularly
water, sewer and trash fees, would have continued after 1980. Some of
the tax increases during this period were the result of Prop. 2½
overrides or debt exclusions, with all but one of the communities
studied having passed at least one. What follows are case studies of
nine actual tax-paying households in Massachusetts. I begin with myself.
Taxpayer A, in my five-room cottage that was purchased in 1975.
Property value, 2005: $376,400. Tax bill: $3,109.
Average annual property tax increase before Prop. 2½: 8.81 percent.
Average annual increase since Prop. 2½, even with several Marblehead
overrides: 5.38 percent.
If the pre-Prop. 2½ trend had continued, my present property tax bill
would be $6,710. I saved $3,601 this year alone!
Taxpayer B, a Marblehead businessman living with his wife and four
children in the small cape that was built by his lobsterman grandfather.
Located on Marblehead Harbor, it has always carried a relatively high
assessment. So the savings for Taxpayer B is a relatively small $617
this year. However, he also owns the property next to Taxpayer A, which
he rents to ...
Taxpayer C, a taxpayer activist who pays part of the $4,032 tax bill in
his rent on this cottage that is assessed at $488,100 because it's
attached to some rare Marblehead open space. The savings from Prop. 2½
on this property: $6,341 this year alone.
Along with the property tax levy limit, Prop. 2½ created a rental
deduction from the state income tax, and cut the annual auto excise rate
from $66 per $1,000 of valuation to $25 per $1,000. The tenant also
deducted $2,448 from his state income tax for this year, and saved
$77.99 from the auto excise cut.
Taxpayer D, a couple, now in their early 50s, bought their four-bedroom
colonial in 1977 and raised three children, one still at home. The city
of Malden, where she teaches, has never had an override. The taxes
increased 5.75 percent a year on average during the 1970s and 0.966
percent annually after Prop. 2½ became law, saving them $5,834 this year
alone.
Taxpayer E, an orthodontic lab technician and illustrator of children's
books, with two dogs and two cats, reside in a Topsy-style, four-bedroom
cottage near the water in Scituate, where the couple raised three
children as they added rooms. Their savings this year was $5,787.
Taxpayer F, a semi-retired executive-federal official-educator and his
wife, who have three sons and five grandchildren, live in a home now
valued at over $1 million in Rockport, which has had many overrides and
debt exclusions. Their annual tax increases before and after Prop. 2½
were not as dramatically different as those of the other taxpayers —
7.985 percent before, and 6.249 percent afterward. Nevertheless they
saved $5,520 this year.
Taxpayer G, a couple that has lived together for many years in a modest
home with a swimming pool. One is a systems analyst and the other was
appointed by then-Gov. William Weld as the official astrologer of the
commonwealth. They have two dogs. Their taxes increased 3.083 percent a
year on average until Saugus had the highest vote for Prop. 2½ in 1980.
Since then the average increase has been 0.906 percent and they saved
$2,173 this year alone.
Taxpayer H, a retired Air Force master sergeant and his wife, raised
four sons in a Billerica bungalow, where two sons still live and they
entertain three granddaughters. They saved $2,400 this year toward the
one-story home they are building.
Taxpayer I, a recent widow with one grown son, has just retired from
social work and lives in her East Bridgewater family home, inherited
from her grandmother. She saved $1,260 this year.
The property tax limit may still scare people who like unlimited taxes,
but it's safe to say that all homeowners, renters and drivers have saved
a bundle over 25 years.
Happy Halloween-week birthday, Proposition 2½ — and many more.
Return to top
The Attleboro
Sun-Chronicle
Monday, October 31, 2005
3 cheers for 2½
By Mike Kirby
Twenty five years ago this week, voters put their leaders in their
place.
The date, Nov. 4, 1980, is famous because it was the day Ronald Reagan
defeated Jimmy Carter for president, launching the conservative
revolution that continues across America today.
But here in Massachusetts, voters made history by passing a law that the
political establishment just hated. When the law first appeared before
the Massachusetts House, it was rejected by a vote of 155-5. Virtually
every mayor, every selectman, every school committee chairman in the Bay
State opposed it. But the voters loved it, approving it by a margin of
60-40 percent. In the Attleboro area, support was even greater, 67 to 33
percent.
The law is known as Proposition 2½, and it's as powerful today as it was
a quarter of a century ago. There's hardly a meeting in a Massachusetts
city hall or town hall in which the rules demanded by the voters on that
day don't come into play. The rules basically come down to this:
* Property taxes and automobile excise taxes are limited to 2½ percent
of their value.
* Cities and towns can't increase property taxes more than 2½ percent a
year.
Enforcing the rules was difficult at first, no doubt. Attleboro area
communities had to cut property taxes by $5.3 million the first year
alone, a lot of money at a time when most town budgets were still in
seven figures. Excise taxes were slashed by 62 percent. Attleboro and
Norton each had to cut their property tax levies by 15 percent.
Attleboro lost more than 200 school positions.
But -- to their credit -- Massachusetts leaders got the message quickly.
State aid to communities, which had been minuscule compared to most
states, increased dramatically. Within five years of its passage,
municipal spending was up 13.1 percent in the Attleboro area, thanks to
a huge increase in state aid.
Some may argue that the state, which now controls the pursestrings, has
too much authority over local government. But the doom-and-gloom
forecasts before Nov. 4, 1980 never really materialized. Crime did not
become widespread, fires did not engulf entire communities and our kids
continue to receive an excellent education. Just this month,
Massachusetts students were rated tops in the nation in English and
math.
It happened because voters put their foot down. Taxpayers were getting
socked with huge property tax increases each year, despite weak attempts
by the Legislature to curb local spending. Leaders, both at the state
and local level, seemed either unable or unwilling to make the tough
decisions to put an end to it.
So the voters did it for them. They rewrote the rule book. Sometimes,
those rules are tough to live by, but the smart leaders know how to deal
with them.
And they know that they can't be changed. Because Proposition 2½ is a
law and not a constitutional amendment, it is subject to change and even
abolition by the Legislature.
It's not going to happen. The voters' message was that powerful. If
there's one law that's a sacred cow in Massachusetts, it's Proposition
2½.
So next time if you're wondering if you should bother voting, remember
Nov. 4, 1980, the day the voters of Massachusetts let the politicians
know who is boss.
Mike Kirby is editor of The Sun Chronicle.
Return to top
The Eagle-Tribune
Sunday, October 30, 2005
Law gave voters final say on how much cities,
towns can spend
By Steve Landwehr, Staff writer
A taxpayer revolt swept into Massachusetts on Nov. 4, 1980, hot on the
heels of a similar uprising in California two years earlier. Despite
nearly unanimous opposition from legislators, Bay Staters handily
approved drastic changes in the way cities and towns collect taxes.
Proposition 2½, a citizens petition championed by a group called
Citizens for Limited Taxation, permanently altered the conduct of local
government. For the past 25 years, cities and towns have had to limit
any increase in the amount of money raised via the property tax to no
more than 2.5 percent each year, plus a factor that takes into account
any new construction.
While the new law also substantially decreased the automobile excise tax
and changed the way police and fire contracts are negotiated, its
primary goal was stabilizing and reducing property taxes. And for the
most part it has worked.
Gone are the days when taxes varied wildly on the same street, and
longtime residents paid far smaller tax bills than newcomers moving into
similar homes across the road. Prop. 2½ requires that all property be
assessed at its "full and fair cash value," and be reassessed every
three years.
Gone, too, are dual tax rates — one to raise money to run schools, the
other to pay for other town business — and school boards that spent
without any oversight.
Increases beyond what Prop. 2½ allows require approval by a majority of
voters, and an analysis of a quarter-century's worth of records shows
they've balked at those tax hikes more than half the time.
Since 1983, overrides have been requested 3,509 times statewide and
rejected 2,136 times, a failure rate just over 60 percent, which is
mirrored in Essex County.
Data kept by the state Department of Revenue shows that overrides have
become a fact of life in most of the region's towns, and are all but
unheard of in the cities. Sizeable commercial and industrial bases have
allowed Beverly, Danvers, Gloucester, Methuen, Newburyport, Peabody, and
Salem to conduct business each year without ever asking for an override,
or permanent increase in their operating budgets.
With small or nonexistent business districts, smaller towns haven't had
the same luxury. Homeowners foot nearly the entire bill for school and
town services, and face frequent override requests. The DOR records
indicate that for the most part, those requests are likeliest to win
approval in the wealthiest communities.
Rowley has placed more overrides on the ballot than any other Essex
County community in the last 25 years. But it has not been a case of
"ask and you shall receive." With a median household income of $62,130,
voters in Rowley have only approved 12 of those overrides.
Jack DiMento has been chairman of the town's Finance Committee for a
dozen years. One reason the town has had so many override requests is
that officials have adopted a policy of offering voters a "menu" of
small budget increase choices each year.
When residents were asked for general budget overrides, DiMento said,
"We were getting killed, getting nothing."
By contrast, Boxford town officials have requested 46 overrides in the
same time period, and having by far the county's highest median income,
$113,212, voters have gone along with the overrides 25 times — more than
any other community. Neighboring Topsfield, where the median income is
$96,430, also has been generous with override approvals, granting eight
of the 16 requested.
Hamilton voters have also passed more than half of the 30 budget
increases they've voted on, but 10 of those were not permanent. They
were for a string of road improvements that, once completed, were
dropped from the annual budget. The median income in the town is
$72,000.
At $27,983, Lawrence has the lowest median income in the county, and
voters have rejected all four overrides they've faced since 1980.
Swampscott residents are considerably wealthier, with median household
incomes of $71,089 a year. Yet before last spring, they had only been
asked for one override, and approved it.
Town Administrator Andrew Maylor said that parsimony has come at a cost
— decreased town services. He surveyed staffing at town halls recently
and found Swampscott has five to seven fewer employees than similar
communities. He also noted residents already pay annual average property
taxes of $5,600, making it hard to ask them to approve even higher
bills.
While Prop. 2½ has made the process of putting a budget together easier
— town finance directors can accurately predict how much revenue they'll
have each year — in Maylor's view it has also prevented some necessary
philosophical discussions.
Because overrides can be so divisive, "it's made it in some ways
difficult to get into a deep debate about what the community really
needs," Maylor said.
The state data indicate town officials are becoming more astute at
judging when to ask for more spending money. Between 1990 and 1999, only
34 percent of overrides countywide won approval. But since 2000, the
approval rate has soared to 80 percent.
By giving voters the last word on sizeable budget increases, Prop. 2½
has stabilized property taxes, and made them more equitable. It's hard
to argue it has corralled local spending, however.
A 1989 study in the American Journal of Economics and Sociology found
that by 1990, per-capita property taxes in the state were still well
below their 1980, pre-Prop. 2½ levels. Yet in the same 10-year time
frame, fees and other nontax charges nearly doubled — more than making
up the revenue lost due to lower property taxes.
Locally, that trend continues, in the form of new or increased fees for
everything from building permits to participation in school sports.
A taxpayer revolt swept into Massachusetts on Nov. 4, 1980, hot on the
heels of a similar uprising in California two years earlier. Despite
nearly unanimous opposition from legislators, Bay Staters handily
approved drastic changes in the way cities and towns collect taxes.
Proposition 2½, a citizens petition championed by a group called
Citizens for Limited Taxation, permanently altered the conduct of local
government. For the past 25 years, cities and towns have had to limit
any increase in the amount of money raised via the property tax to no
more than 2.5 percent each year, plus a factor that takes into account
any new construction.
While the new law also substantially decreased the automobile excise tax
and changed the way police and fire contracts are negotiated, its
primary goal was stabilizing and reducing property taxes. And for the
most part it has worked.
Gone are the days when taxes varied wildly on the same street, and
longtime residents paid far smaller tax bills than newcomers moving into
similar homes across the road. Prop. 2½ requires that all property be
assessed at its "full and fair cash value," and be reassessed every
three years.
Gone, too, are dual tax rates — one to raise money to run schools, the
other to pay for other town business — and school boards that spent
without any oversight.
Increases beyond what Prop. 2½ allows require approval by a majority of
voters, and an analysis of a quarter-century's worth of records shows
they've balked at those tax hikes more than half the time.
Since 1983, overrides have been requested 3,509 times statewide and
rejected 2,136 times, a failure rate just over 60 percent, which is
mirrored in Essex County.
Data kept by the state Department of Revenue shows that overrides have
become a fact of life in most of the region's towns, and are all but
unheard of in the cities. Sizeable commercial and industrial bases have
allowed Beverly, Danvers, Gloucester, Methuen, Newburyport, Peabody, and
Salem to conduct business each year without ever asking for an override,
or permanent increase in their operating budgets.
With small or nonexistent business districts, smaller towns haven't had
the same luxury. Homeowners foot nearly the entire bill for school and
town services, and face frequent override requests. The DOR records
indicate that for the most part, those requests are likeliest to win
approval in the wealthiest communities.
Rowley has placed more overrides on the ballot than any other Essex
County community in the last 25 years. But it has not been a case of
"ask and you shall receive." With a median household income of $62,130,
voters in Rowley have only approved 12 of those overrides.
Jack DiMento has been chairman of the town's Finance Committee for a
dozen years. One reason the town has had so many override requests is
that officials have adopted a policy of offering voters a "menu" of
small budget increase choices each year.
When residents were asked for general budget overrides, DiMento said,
"We were getting killed, getting nothing."
By contrast, Boxford town officials have requested 46 overrides in the
same time period, and having by far the county's highest median income,
$113,212, voters have gone along with the overrides 25 times — more than
any other community. Neighboring Topsfield, where the median income is
$96,430, also has been generous with override approvals, granting eight
of the 16 requested.
Hamilton voters have also passed more than half of the 30 budget
increases they've voted on, but 10 of those were not permanent. They
were for a string of road improvements that, once completed, were
dropped from the annual budget. The median income in the town is
$72,000.
At $27,983, Lawrence has the lowest median income in the county, and
voters have rejected all four overrides they've faced since 1980.
Swampscott residents are considerably wealthier, with median household
incomes of $71,089 a year. Yet before last spring, they had only been
asked for one override, and approved it.
Town Administrator Andrew Maylor said that parsimony has come at a cost
— decreased town services. He surveyed staffing at town halls recently
and found Swampscott has five to seven fewer employees than similar
communities. He also noted residents already pay annual average property
taxes of $5,600, making it hard to ask them to approve even higher
bills.
While Prop. 2½ has made the process of putting a budget together easier
— town finance directors can accurately predict how much revenue they'll
have each year — in Maylor's view it has also prevented some necessary
philosophical discussions.
Because overrides can be so divisive, "it's made it in some ways
difficult to get into a deep debate about what the community really
needs," Maylor said.
The state data indicate town officials are becoming more astute at
judging when to ask for more spending money. Between 1990 and 1999, only
34 percent of overrides countywide won approval. But since 2000, the
approval rate has soared to 80 percent.
By giving voters the last word on sizeable budget increases, Prop. 2½
has stabilized property taxes, and made them more equitable. It's hard
to argue it has corralled local spending, however.
A 1989 study in the American Journal of Economics and Sociology found
that by 1990, per-capita property taxes in the state were still well
below their 1980, pre-Prop. 2½ levels. Yet in the same 10-year time
frame, fees and other nontax charges nearly doubled — more than making
up the revenue lost due to lower property taxes.
Locally, that trend continues, in the form of new or increased fees for
everything from building permits to participation in school sports.
Return to top
The Eagle-Tribune
Sunday, October 30, 2005
A Prop 2½ primer
Levy ceiling — The maximum amount of taxes any community can
collect on real and personal property. It represents 2.5 percent of the
full cash value of all properties. If cash value totals $100 million,
the levy ceiling would be $2.5 million.
Levy limit — The maximum amount of taxes that can be raised in a given
year. It can be no more than 2.5 percent higher than the previous year's
levy limit (not what was actually raised in taxes) plus any new growth,
such as new businesses or homes that have been built.
If the previous year's levy limit was $1 million, increasing it 2.5
percent results in a new limit of $1,025,000. If a community's property
tax base increased by $15,000, that would be added to create a levy
limit of $1,040,000.
Although some communities don't tax to their levy limit, leaving a
cushion for emergencies, they gamble doing so. Any taxes not collected
in a year are lost forever. Although the following year's levy limit
goes up by 2.5 percent, any taxes not levied the previous year cannot be
recaptured.
Override — Communities can permanently increase their levy limit
by passing an override at the ballot box. The amount of the override is
added to the previous year's levy limit, plus the automatic 2.5 percent
increase and new growth, to set the new levy limit.
Using the previous example, if voters approved a $100,000 override, the
levy limit would be raised to $1,140,000.
An override cannot be used to raise the levy limit above the levy
ceiling.
Debt exclusion — A community can temporarily raises taxes higher
than the levy limit or levy ceiling to pay off bonds for large projects,
such as a new school. A debt exclusion does not permanently increase the
levy limit. This is similar to a mortgage a homeowner would take on
their dwelling.
Capital outlay expenditure exclusion — Another way a community can
temporarily raise taxes even above its levy ceiling, typically for such
things as purchasing new town vehicles.
Overrides, debt, and capital outlay expenditure exclusions all require a
favorable majority vote at the ballot box.
Return to top
The Eagle-Tribune
Sunday, October 30, 2005
Buying off the opposition with false compassion
By Taylor Armerding
Once again, false compassion is oozing from the Statehouse.
No surprise there. Nor is it a surprise that it is aimed at one of the
three sacred demographic groups that are always invoked every time
politicians want to slip their hands a bit deeper into the wallets of
those who have to pay the bill for their kindness — senior citizens,
"the children" and "the less fortunate."
In this case, the pols are going for a two-fer. They contend that
legislation now pending is about property tax relief for those who are
both elderly and less fortunate.
Still, the hypocrisy should outrage us, even if it doesn't amaze us any
more.
It's interesting, just for starters, that "less fortunate" would include
those with homes worth as much as $750,000. But that, of course, is
because this isn't really about being compassionate to seniors. If it
was, legislators would dig into their own pockets to help pay somebody
else's property tax bills. Instead, they want to dig into yours.
No, this is about feeding the government's insatiable appetite. Seniors,
you see, tend to vote against runaway government spending, which is on a
runaway pace despite their opposition. The median property tax on a
single-family home in Massachusetts jumped 9 percent just since last
year and has increased 38 percent since 2000.
So what better way to defuse their opposition than to tell them that
when taxes go up, they won't have to pay? This, of course, from
legislators and local officials who are forever lecturing me that there
is "no free lunch" every time I ask them why the price of government
"lunch" has to increase at two or three times the rate of inflation
every year.
But even if this wasn't just about making it easier for municipalities
to raise property taxes, it would be a bad idea. It is not necessary and
it is unfair.
It is true that some senior citizens are poor and some are on relatively
fixed incomes (although even Social Security is not a "fixed" income).
But they are a small percentage of the elderly population. And there is
already plenty of help available for those who truly need it.
Already, people aged 65 and older can claim a credit (not a deduction —
a credit) on their state income taxes if their property taxes plus water
and sewer fees are more than 10 percent of their income. The pending
bill would cut that to 8 percent.
Already, seniors with homes valued at $441,000 qualify for this credit.
The pending bill would raise that to $750,000.
Already, seniors in most communities qualify for property tax
abatements.
Most significantly, if seniors are really strapped financially because
their property taxes have skyrocketed along with the value of their
home, they can start to tap all that increased value with a reverse
mortgage.
Ah, but how cruel that would be, say senior advocates. These people have
lived in their homes for decades and raised their families. Why
shouldn't they be able to pass their homes on to their children, without
burdening it with a new mortgage after they worked all their lives to
pay the old one off?
Well, anyone can relate to that desire. I'd love to pass along my house,
debt-free, to my kids. But why should the rest of the working people of
the state have to subsidize my desire? Are legislators deliberately
trying to start generational warfare? It's a bit like saying I should
get a tax break because I don't want to dip into that $750,000 I spent
my life saving and now have stuffed under the bed. I want to pass it
along to my kids! I shouldn't have to spend it paying my bills!
Finally, seniors who are complaining about the increased value of their
homes ought to be giving thanks that all they have to pay is the taxes
on them. How would they like to be trying to break into home ownership
at these prices? Who is more "deserving" of a tax break: One who has
lived in a nice house for several decades, or one who is in his 30s or
40s and has never been able to own a home because of insanely high
prices? Who is more deserving: A senior paying 15 percent of his income
for property taxes, or a younger worker paying 30 to 50 percent of his
income on a mortgage, taxes and other fees?
When is it going to register with politicians about who is really less
fortunate here?
But of course, it does register. The pols know all this. Compassion for
seniors is just a cover to mask the real agenda — too much is never
enough.
Return to top
The Salem News
Tuesday, November 1, 2005
Our children are chief victims of restrictive tax law
By Meg Ansara
Doesn't every child in Massachusetts deserve a fair chance in life?
That's the historic promise of the cornerstone of American democracy —
our public school system.
A child of a fisherman, a child of immigrants, a child of a janitor —
all have a shot at admission to Harvard as long as they get a good K-12
education in our public schools.
This basic promise of equal opportunity and a fair chance in life was
seriously undermined 25 years ago. Proposition 2½ created a patchwork
quilt, instead of a uniform blanket of opportunity, for schoolchildren
in Massachusetts.
Proposition 2½, passed by the voters of Massachusetts in 1980, limits
the amount of revenue that can be raised for schools and other essential
community services. It may have sounded reasonable at the time, but 25
years later, it's time to take a look around.
Who could have anticipated, in 1980, the multimillion-dollar cuts in
state and federal dollars Massachusetts communities have weathered in
recent years? Who could have known the blow to budgets delivered by
double-digit increases in health-care costs? Was anyone considering the
boom we've experienced in our state's school-aged population or the cost
of deferred maintenance for our aging roads and buildings?
The arbitrary ceiling of 2.5 percent simply does not match reality.
Costs of the everyday services our communities depend on — schools,
police, libraries, public works — grow at a much faster rate. Factors
such as energy prices, health insurance rates, and the cost of unfunded
state and federal mandates are outside the control of those who deliver
these vital local services.
By hindering a community's ability to pay for needed services,
Proposition 2½ has had a devastating effect that voters 25 years ago
surely did not intend. A study done at the 20-year mark found that the
measure actually lowers property values. Researchers found: "The
evidence is compelling that restrictions on a community's ability to
raise taxes did lower its property values." (Lang and Jian, "Property
Taxes and Property Values: Evidence from Proposition 2½," August 2000)
Beyond the damage to homeowners' property values, whole communities have
been harmed. Immediately after the passage of Proposition 2½, many
communities began making the first in a long series of serious cuts to
schools and other municipal services. Class sizes have increased,
textbooks have grown out of date, educational offerings have been
reduced, aging buildings have been neglected, and critical police and
fire services have been reduced to dangerous levels.
Our state now ranks at the bottom in the amount of government spending
as a share of personal income. We are 43rd among states in K-12
spending, 37th in public safety, and last among all 50 states in the
share we invest in higher education and in parks and recreation.
But not all schoolchildren are suffering equally. In part thanks to
Proposition 2½, our state also leads the nation in the gap between our
highest- and lowest-poverty school districts. Children in more affluent
communities are educated with $1,343 more in public support than those
in struggling cities. Wealthier communities are more likely to muster
the support for overrides, widening the inequities that already exist.
At a time when our economic survival demands a better-educated work
force, Massachusetts led the nation in 2002 to 2004 in cutting state
funding for K-12 education. While most states spared K-12 education from
budget cuts during these two years, we were one of four states that cut
spending in both years. Massachusetts education spending dropped by 7.2
percent, compared to a nationwide average increase of 4.4 percent.
In a study of the impact of state fiscal policies on education,
researcher Andrew Reschovsky found that "the combination of cuts in
state funding for education, the inability to adequately raise property
taxes, and the rising costs of meeting new performance standards
suggests that over the next few years there will be a significant
increase in both the number of schools classified as failing and the
number of students receiving an inadequate education."
Proposition 2½ is a failed fiscal policy. It has placed our communities
on a roller coaster of uncertainty and made them more vulnerable to
economic downturns. Not only has it lowered property values, it has
created a structural deficit that is eroding schools, public safety and
other valued services.
Stand for Children is a grass-roots movement of everyday people who
refuse to sit by while our children's future is put at risk. We have
helped pass Proposition 2½ overrides in Lexington and Arlington to lower
class sizes and restore educational programs that had been cut. As a
growing statewide organization, we are committed to moving beyond a
piecemeal approach to improving children's chance in life. We welcome
the involvement of everyone who recognizes the failures of Proposition
2½, and who wants to work with us to improve our state's investment in
education.
Voters 25 years ago made a decision that helped determine the quality of
our schools and our community life. That choice does not lie only in the
past. The citizens of this great state, today, have choices, too. We can
— and must — do better, Massachusetts! Stand with us for children, and
for communities based on sound fiscal policies and a commitment to the
well-being of all.
Meg Ansara is the Massachusetts state director for Stand for
Children, an Arlington-based organization describing itself as "a
citizen voice for children" that advocates "for improvements to and
funding for programs that give every child a fair chance in life."
Return to top
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