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Tuesday, December 9, 2014

Is it time to update Proposition 2½?

Chip Ford's CLT Commentary

Since 1980, CLT's Proposition 2½  has limited overall municipal property tax increases to 2.5 percent per year, dropped the auto excise tax from $66/$1000 assessed value to $25/$1000 (a 60% reduction), and provides an income tax deduction for renters.

How much has it saved you over the years and decades?

How much more will living in Taxachusetts cost you if Prop is taken away?

Keeping Prop 2½ — like the price of freedom — requires eternal vigilance.  There have been many attacks on it over the decades, some blatant and some subtle.  CLT has been here to push back and preserve our law, and your savings.

There appears to be a new appetite growing to "reform" Proposition 2½.

We hope Citizens for Limited Taxation is around when the next assault is launched.

Thank you to the many who've recently responded to CLT's fall fund-raising appeal.  It's keeping us hanging on for a while longer.

If you haven't responded to our mailing yet, please do so quickly — or you can make your contribution right now by credit card HERE.

Chip Ford


The Boston Globe Metro-North
Sunday, December 7, 2014

Is it time to update Proposition 2½?

Is it time to update Proposition 2½ to enable cities and towns to increase property taxes by more than the current limit of 2.5 percent plus new growth revenues?


By Robert J. Dolan, Mayor of Melrose

I don't believe Proposition 2½ should be eliminated, but it needs to be reformed. The local government of 1982 is unrecognizable compared to today in terms of technology, health care, mandates, and particularly public education. Very few policies in the public or private sector have endured over 32 years without any change or reform. Here are some ways that government is different in 2014 than 1982, and why reform is needed:



Robert J. Dolan, Mayor of Melrose

Federal and state mandates, particularly in education and water/sewer, have never been more stringent or costly. Mandates don’t come with funding.

Proposition 2½ has brought in an era of fees, and it has cost families more: Fees for trash, sports, kindergarten, busing, etc. We have gone from a taxation system to a regressive fee system that hurts families, and unlike property taxes, these fees are not tax deductible. This costs residents more money than adjusting Prop 2½ and creates a have/have not society, particularly in education. Yet without fees, many programs would not exist.

Local education funding is dictated by outside factors like unpredictable snow removal costs or fluctuating electricity rates. That is not sound, operationally or fiscally.

The success of Proposition 2½ was based on revenue sharing between the state and federal government and cities and towns. That partnership is shrinking, or ending, and the model no longer works. For example, Melrose has lost several million dollars in federal and state aid between fiscal 2009 and 2015.

Massachusetts has reformed many complicated laws. Governor Romney reformed heath care; Governor Patrick reformed pensions and education. We need to have a mature discussion about how much things cost and how they are paid for at the level of government that most directly touches people's lives and is most accountable to taxpayers.

One budget stress that links the private and public sectors is health insurance. For most cities and towns, the majority of new revenue brought in under Proposition 2½ is used to offset rising health insurance costs. That issue didn’t exist in 1982, and those costs are not going away, but they are not acknowledged in the Proposition 2½ formula.

These are just a few examples, but most importantly, every community is different, with varying demographics and needs. Proposition 2½ doesn't allow any flexibility to deal with those variations from community to community and year to year. That was not the purpose of the law. It’s time for reform.


By Barbara Anderson, executive director, Citizens for Limited Taxation, Marblehead

Absolutely not. Why would Massachusetts want to raise property taxes? It’s hard enough for property taxpayers, who may be on fixed incomes, unemployed, or underemployed in this economy, or not getting raises every year, to pay the property taxes they have now.



Barbara Anderson, executive director
of Citizens for Limited Taxation

Property taxes in Massachusetts are eighth-highest per capita in the nation, 38.4 percent, above the national average – which is at least an improvement over the highest in the nation, as they were before Prop 2½.

Before 1980, we’d been promised property tax relief, and local officials had been promised local aid. Finally, voters took matters into their own hands with an initiative petition, which passed 59 percent to 41 percent on the 1980 statewide ballot. Property taxes were cut in some cities, then the annual levy increase was limited in all communities to 2.5 percent a year. The auto excise was reduced, a rental deduction created.

Along with cutting/limiting property taxes, Prop 2½ encouraged the sharing of state revenues with cities and towns. Unfortunately, too much of that local aid windfall was negotiated away to public employee unions, providing extraordinary benefits, which is why some communities now carry unfunded pension and health insurance liabilities.

This problem shouldn’t be solved with tax hikes on other working people who struggle to pay their own retirement and health insurance. And if inflation increases, taxpayers will suffer from it, too. Certainly, we don’t want to raise property taxes on the businesses we need for fighting unemployment.

Prop 2½ forbade new unfunded state mandates and gave municipal leaders more control over school and public safety budgets. It also allows overrides and debt exclusions, if local voters can be convinced to approve them. When local officials want more money than the levy limit allows, they must ask for it, instead of just taking it as they did before 1980. Citizen empowerment is one of the best things about our property tax limit.

This is no time in history for another assault on the middle class. Deval Patrick broke his campaign promise for property tax relief. Massachusetts has elected a new governor who has long supported Prop 2½ and I’m confident would veto any attempt to change it. Anyone who wants to “update Proposition 2½” should instead focus on making the Commonwealth more productive and better managed, so more local aid is possible. Until then, if local officials want more money from their taxpayers, they can ask.


NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. For more information go to:

Citizens for Limited Taxation    PO Box 1147    Marblehead, MA 01945    508-915-3665