Post Office Box 1147  ●  Marblehead, Massachusetts 01945  ●  (781) 639-9709
 “Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
 45 years as “The Voice of Massachusetts Taxpayers”
— and their Institutional Memory —

CLT Memo to Legislators
Wednesday, October 9, 2019

Stealth attack on Proposition 2½

To:  Republican members of the House of Representatives
October 9, 2019

Dear Representative;

I want to bring to your attention, if you’re not already aware of it, an amendment to the Senate’s “Education Funding Reform” bill, S-2365 (originally S-2350), now in the House Ways & Means Committee.

Amendment #27, offered by Sen. Joanne M. Comerford (D-Northampton) and supported by Sen. Eric P. Lesser (D-Longmeadow), was adopted by a vote of 34-4 in Roll Call #102.  Beacon Hill Roll Call described it as:

“[A]n amendment requiring the Department of Elementary and Secondary Education to analyze the impact of Proposition 2½ on the ability of municipalities to make their required local contributions in the short-term and long-term and recommendations to mitigate the constraints of Proposition 2½.” [Emphasis added.]

The amendment is quite vague with the intentions of its sponsors, or the thirty-four senators who chose to include it in the education funding bill, but “mitigating the constraints of Proposition 2½” is cause for alarm here at Citizens for Limited Taxation, which provided Proposition 2½ to property taxpayers in 1980.

Over the decades Proposition 2½ has come under many stealth attacks to dilute and circumvent it, so another would not be surprising.  We at Citizens for Limited Taxation — and property taxpayers across the commonwealth, I’m sure — hope you and other House members will look into this carefully and ensure that this proposed “mitigation” isn’t another such stealth attack before allowing it to become law, at least without exposure and opposition.

Thank you for your time and interest.

Chip Ford
Executive Director
Citizens for Limited Taxation
781-639-9709

MORE INFORMATION FOLLOWS

State House News Service
Thursday, October 3, 2019
SENATE SESSION – THURSDAY, OCT. 3, 2019

 EDUCATION FUNDING: Question came on ordering S-2350 relative to educational opportunity for students redrafted by the Ways and Means Committee to a third reading.

COMERFORD AMENDMENT 27 - Analyze Impact of Proposition 2½

Sen. Comerford said, thank you. What this amendment does is it requires DESE to consider the impact of Proposition 2½ on local communities and their ability to make required local contributions.

Some of my towns and your towns are bumping up against the Prop 2½ ceiling, and some of my towns have the highest tax rates in the commonwealth. The towns want to contribute to public education spending. They are, however, constrained. In Prop 2½, municipalities are subject to two ceilings.

The first is the amount raised by a municipality shall not exceed 2.5 percent the assessed value of all property in it. The second is the annual increase.

For many of our towns in the Hampden, Franklin and Worcester District, the constraints of Prop 2½ is making it impossible to meet the needs of our districts. Of the top 20 highest taxpaying municipalities in the commonwealth, seven are in the Hampden, Franklin and Worcester District. We're facing many challenges such as still no broadband in any communities. This will allow us to analyze the impact and grapple with the impacts.

Sen. Comerford requested a roll call vote. There was sufficient support.

Sen. Lesser said, I rise in support of this amendment. This is an urgent need. We have to examine our underly property tax system in the state.

One important way to illuminate this is to show a list of the communities in Massachusetts with the highest property tax rates, the top 50 towns. The highlighted ones come from Worcester, Franklin, Hampden, Hampshire or Berkshire counties. Almost all of the highest property tax towns are in Western Massachusetts.

In Western Mass., for a variety of reasons, we have economic growth that is not as robust as other parts of the state. Those forces combine to mean overall property values in our region are flat or going down, in some cases down precipitously. When property values are flat or falling you need to raise the rate just to keep up with inflation and incremental costs that every town faces.

As a result, some of our lowest-income communities have higher property tax rates than many of our wealthy communities. A lot of our towns are willing to step up and to tax themselves more to pay for these vital services but Proposition 2½ puts a cap on that.

The real-life consequence is once the levy limit is reached, towns have no ability to raise revenue to pay for services. What happens is you hit the ceiling and cannot raise property taxes anymore and there are no more ways to collect additional revenue and yet other costs continue to rise. Those towns have to start laying people off and cutting services.

It's a ticking time bomb for our communities and is an urgent municipal finance problem facing our communities. The conversations around Chapter 70 shows how dependent on state aid cities and towns are.

The subject of broader municipal finance reform is part and parcel with a real conversation about education equities. I hope the amendment is adopted.

BY A ROLL CALL VOTE OF 34-4, the amendment was ADOPTED. Time was 6:24 p.m.

https://malegislature.gov/RollCall/191/SenateRollCall102.pdf

Beacon Hill Roll Call
Volume 44 - Report No. 40
By Bob Katzen
September 30-October 4, 2019

PROP 2½ (S-2350)

Senate 34-4, approved an amendment requiring the Department of Elementary and Secondary Education to analyze the impact of Proposition 2½ on the ability of municipalities to make their required local contributions in the short-term and long-term and recommendations to mitigate the constraints of Proposition 2½.

Prop 2½ allows communities to raise property taxes only 2.5 percent a year over the previous year’s levy. The limit can be overridden by a majority of voters.

Amendment supporters said many cities and towns are willing to step up and to tax themselves more to pay for vital services but Proposition 2½ puts a cap on that. They said that once the levy limit is reached, towns have no ability to raise revenue to pay for services and have to start laying people off and cutting services.

“Since the moment I began campaigning, I heard about the pressure that multiple municipalities in my district are under as a result of Prop. 2½ constraints,” said the amendment’s sponsor Sen. Jo Comerford (D-Northampton). “A major driver of municipal expenses has been education. These towns want to go the distance for our schools, and so it is only fitting that we use this education legislation to understand the impact Prop 2½ is having on their ability to help fund our schools, and then work with these communities to find an equitable way forward.”

"Proposition 2½ caps property tax hikes unilaterally imposed by municipal officials at 2.5 percent, but there is no limit to how much willing municipal taxpayers can tax themselves through a Proposition 2½ operational override — if a majority of the city’s or town’s electorate is so inclined," said Chip Ford, executive director of Citizens for Limited Taxation (CLT), the group that created and put Prop 2½ on the 1980 ballot. "If those officials want to spend more, let them ask their constituents for more to spend. This is precisely why CLT proposed its property tax cap and why voters overwhelmingly adopted it. They can 'study the impact' but a solution is in their hands."

CLT UPDATE
Sunday, October 6, 2019
 Proposition 2½ again under attack
 http://cltg.org/cltg/clt2019/19-10-06.htm#Commentary

 

“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”

#     #     #

Citizens for Limited Taxation  ▪  PO Box 1147  ▪  Marblehead, MA 01945  ▪  (781) 639-9709