and the
Citizens Economic Research Foundation

October 2, 2006

"Christy’s Proposition 1"

Nowhere except in my recent column in some Massachusetts dailies have we seen an analysis of "Christy’s Proposition 1," even though it is his signature issue.

We do not blame editors and reporters who haven’t done this: their instincts probably tell them there is little substance on the other side of a proposition that is too muddy to wade through. But on the surface, it is making sense to some voters, who need to know what it is.

"Proposition 1," according to the Mihos website, "will cap property values from the time of purchase until the property is sold." Christy promises that, if the Legislature won’t pass this, he will put it on the 2008 ballot.

This is not possible. The state constitution requires that all property be assessed at full market value (Sudbury decision, 1974, which mandated regular property revaluations). It would take a constitutional amendment to freeze assessments, and that would require the cooperation of the Legislature and take at least four years.

Christy says he has found a way around this, and cites "Sylvester vs. the Commissioner of Revenue," which says that the state can have residency requirements for the veteran property tax exemption. We see no connection here to freezing assessments, so "Proposition 1" would require a constitutional amendment.

If it did get to the ballot in 2010, we would expect voters to reject it on the grounds of unfairness: why should homeowners who move -- for a job, for other economic reasons, to be near parents or grandchildren, to a larger or a smaller house that fits their family – pay more than those who stay put, and then also be forced to pay the stay-putters share of tax increases?

This is what would happen under Proposition 2½: a community gets a 2.5 percent increase in the property tax levy each year, regardless of what happens with assessments – so all local taxpayers subsidize any property tax break. Christy doesn’t seem to understand this, saying only that the "missing" revenue would be replaced with more local aid. Does he plan to change Prop 2½?

Mihos and Deval Patrick tell us that an income tax rollback causes higher property taxes. No, only a Prop 2½ override can cause a community’s property taxes to increase more than Prop 2½ allows. Overrides occur– or don’t occur – whether or not there is new local aid. In the past, local aid has been used for pay raises that increase "fixed costs," leading to more requests for overrides. We await a proposal that, by law, cuts all property tax bills when local aid increases; otherwise we will have both higher income taxes and higher property taxes, as in the past.

It is also interesting that some of those who oppose the income tax rollback by expressing concern about property taxes -- like the so-called Massachusetts Taxpayers Foundation and Edward Moscovitch of Cape Ann Economics – have been long-standing opponents of Proposition 2½.

For more detailed information about "Proposition 1," you can read my column, "Mihos offers Massachusetts voters a pig in a poke."

Barbara Anderson --


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