Citizens for Limited Taxation - which put Prop 2½
on the
1980 ballot - asked its research arm, the Citizens Economic Research Foundation (CERF), to determine what the 20-year
impact has been. CERF commissioned a report from Gloucester-based Lane & Company, which provides a municipal
database used by the municipal bond market.
Highlights of the report, which adjusts for both population
change and inflation, show the impact of the Prop 2½ levy limit in constant per capita dollars from FY '82 through FY
2000:
Conclusion: Prop 2½ cut and/or limited the growth in
property taxes; it actually kept per capita residential property tax increases under inflation while limiting the
increases in commercial/industrial property taxes that were inevitable with classification. Local spending, however,
continued to grow faster than inflation. And it is important to note that the education establishment certainly did its share
of that spending growth!
CLT's goal, to cut and limit the regressive property tax,
was realized. The auto excise rate was cut, though revenues increased with motor vehicle prices over the years. Water and
sewer charges and appropriations were removed from the property tax in many communities as enterprise funds were created.
Other major effects were to change the relationship between
local government and the state by encouraging more local aid and discouraging state mandates; and between local voters and
local government by requiring voter overrides for taxes above the base levy limit.
Property taxes are still too high in Massachusetts but not
as high as they were and certainly not as high as they were heading before the passage and implementation of the initiative
petition known as Proposition 2½.
The Boston Globe
Tuesday, April 2, 2002
The case to amend Proposition 2½
Lawmaker's comments spur a discussion
By Scott W. Helman
Globe Staff Correspondent
State Representative Susan Pope says she didn't intend to
drop a bombshell last week when she suggested that the state consider amending Proposition
2½, the state law that has held property tax increases in check for more than two decades.
But it dropped anyway. Since Pope, a Wayland Republican,
broached the idea last Wednesday at a meeting of the MetroWest Growth Management Committee, town officials
in the region have been abuzz. Proposition 2½ mandates that local property
taxes cannot rise by more than 2.5 percent annually.
Pope said yesterday she was merely relaying what a working
group of the Legislature has been studying. Relaxing the grip of Proposition
2½, she said, was simply one idea among many, and is not likely to be seriously considered on Beacon Hill any
time soon.
Her comments may have reverberated loudly in the area
because they jibe with a prevailing sentiment among many local officials who believe that after 20 years, the 2.5 percent
annual property tax cap has become a vise on necessary town spending.
A chief complaint from municipal officials about Proposition
2½ is that because it imposes an arbitrary ceiling on local spending, it has forced budgets to absorb routine cost
increases due to inflation.
Inflation has risen 93 percent in Greater Boston from 20
years ago, according to the consumer price index from the US Bureau of Labor Statistics. But two decades' worth of
Proposition 2½ has allowed communities to increase cumulative spending by just 64
percent. That means the law has forced communities, unless they've passed overrides, to
take in significantly less money than inflation demands they pay out.
The record number of override attempts this season among the
state's 351 cities and towns are evidence that the cap is becoming more difficult to live under, proponents of amending
the law say. Some communities, including Lincoln, have even had to ask voters for overrides
to balance budgets that include cuts in existing services.
"I think it has some merit to at least look at it," said
George P. King Jr., the town manager in Framingham, where a $7 million override may go before voters this spring. "There are
certainly things that increase a lot quicker than the limit imposed by Proposition
2½."
Two municipal expense areas that have risen dramatically are
employee benefits and special education. These are the things, said Natick Finance Committee chairman Frank Foss, "that
are essentially creating this fiscal nightmare."
"It's certainly been warranted for several years now that
something be done with Proposition 2½," Foss added.
For some, Proposition 2½ remains a guarantor that government spending won't tax people
out of their homes. Barbara Anderson, executive director of Citizens for Limited
Taxation and Government, said any effort to repeal or loosen Proposition
2½ would result in a throwback to the years before the 1980s, when Massachusetts communities had some of
the highest property tax rates in the country.
"That's why we were called 'Taxachusetts,'" she said.
Anderson said communities have simply become too accustomed
to full coffers from the recent boom.
"It's been pouring in, and they think they should be getting
it every year for the rest of their lives," she said. "And if they don't they think they have a fiscal crisis."
Among state lawmakers, said House Majority Whip Lida
Harkins, there's little appetite for making substantive changes to Proposition
2½, but there is an increasing recognition of the limits it imposes. The solution, she said, is more likely
to come from a more equitable form of taxation, particularly for funding the state's public schools.
"I just don't see political will for dismantling Proposition
2½, but I do think that there's a growing awareness that we have to look at alternatives to property taxes for funding
education," said Harkins, a Needham Democrat.
State Senator David Magnani, a Framingham Democrat, said
excise taxes and local income taxes are two possibilities.
"I think property taxes are a particularly difficult way for
us to solve our problem," he said, citing the burden it places on low- and fixed-income residents.
Geoffrey Beckwith, executive director of the Massachusetts
Municipal Association, said the state ought to halt the voter-approved state income tax rollback before expanding a
reliance on property taxes.
One proposed change in Proposition 2½ that Pope's working
group is recommending the Legislature consider is allowing cities and towns to exclude their overlay accounts - reserve
funds used to cover local property tax abatements and exemptions - from the annual cap.
Return to top
The Patriot Ledger
Monday, April 1, 2002
Scituate rejects override:
$1.9M would have gone toward school budget
By Jeffrey White
SCITUATE - Concern about raising property taxes and a feeling
the school committee had to better control spending were factors in the defeat of a $1.99 million Proposition
2½ override for next year's school budget.
The measure failed, 3,134-2,759, in town voting Saturday.
The election drew 5,952 voters, a turnout of 46.8 percent.
While rejecting the school override, voters did approve
adoption of the Community Preservation Act. It will increase property taxes to preserve open spaces and other
purposes.
In addressing the defeat of the school-funding override,
school committee Chairman Mary Mason said yesterday: "It was a very difficult outcome, but the voters have spoken. The
school committee will have to go back and see what we have to do." ...
In the end, it was what the override could mean for the
average Scituate homeowner that drove residents to reject it, opponents said. Had the override passed, the property taxes for
the average Scituate homeowner would have increased $261 a year.
That figure did not include paying back $31.3 million worth
of loans the town took out several years ago to fund renovation of Scituate High School and the Jenkins project.
Residents are just starting to pay the principal and interest on that loan.
With those payments included, passage of the override would
have meant that the typical Scituate homeowners would have seen a property taxes increase of from $393 to $623,
depending on when state reimbursements for the school projects becomes
available.
"Voters said no more," said resident Norm Paley, who opposed
the override. "Nobody, including me, is saying that we don't want kids to be educated, but the school committee just
has not managed its money well."
Scituate's elderly community provided a large voting bloc
against the override. Many seniors are on fixed incomes and said they could not have afforded a tax increase....
"It puts me in a position to have to vote on issues that I
don't want to vote on," committee member Edward Tibbetts said. "The school committee is going to have to make some
significant changes on how we educate our kids."...
School officials yesterday said there are no plans yet to go
back to voters with another override request at a special election.
As school supporters and officials left town hall Saturday
night, many in silence after the override vote was announced, some signaled that the fight had just begun.
"We're disappointed, but not defeated. We're determined to
go on," said Maura Curran, a member of the group United for Scituate Schools.
In other election results, voters also rejected a nonbinding
public opinion question asking whether they would support delaying the state's proposed income tax rollback. The measure
failed 2,722-2,709....
Return to top
