The chief goal of the conference committee examining a proposed education bill on Beacon Hill is to dot the Is and cross the Ts on how the state will spend $1.5 billion more into public education over the next seven years. But negotiators also have to decide whether to retain an amendment that requires an analysis of the state law that limits increases in property taxes, the main source of local funding for K-12 education.
When the Senate adopted its version of the education funding reform bill last month, it adopted an amendment from Northampton state Senator Jo Comerford, a Democrat, that requires the Massachusetts Department of Elementary and Secondary Education to consider the impact that Proposition 2 ½ has on local communities and their ability to make the required local contributions to education.
Proposition 2 ½, approved by voters in 1980 and implemented in 1982, limits the total annual property tax revenue a municipality can raise to no more than 2.5 percent of the assessed value of all taxable property plus allowances for new growth and prohibits cities and towns from raising property taxes by more than 2.5 percent a year without first securing support from voters. It was an effort of Citizens for Limited Taxation and Republican lawmakers like then-state representative Royall Switzler (a Republican from Wellesley) that got the proposal onto the ballot and into law.
“Some of my towns, as I know some of your towns, are bumping up against the Prop 2 ½ ceiling and some of my towns also have some of the highest tax rates in the commonwealth. The main driver of both is education spending,” Comerford said in the Massachusetts Senate, noting that her district’s towns all want to contribute to public education but “they are however constrained.” She added, “For many of our towns in the Hampshire, Franklin and Worcester District, the constraints of Prop 2 ½ make it impossible to meet the demands for sufficient local school funding and this is causing real strain and burden on municipalities.”
The amendment passed the Senate on a 34-4 vote. It requires the state Department of Elementary and Secondary Education to produce “an analysis of the impact of Proposition 2 ½ 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 2 ½.”
State Senator Eric Lesser (D-Longmeadow), who also represents parts of western Massachusetts, said Proposition 2 ½ is a big issue for his communities because many have total property valuations that are either flat or declining, but costs for public services rise and municipalities have to keep pace with inflation.
“What happens is you hit the ceiling, you can’t raise property taxes any more and there are no other ways to collect income often in these relatively small towns. Well, there’s still a 2 percent health care cost increase, there’s still a collective bargaining increase, there’s a snowstorm and you have higher fees for plowing than normal. What do you have to do? You start laying people off, you start cutting services, you could see schools close, you could see police stations and police shifts cut back,” Lesser said. “There are potentially catastrophic consequences if we don’t get this under control. Quite frankly, it’s a ticking time bomb for our communities.”
Lesser acknowledged that “dealing with this in this [education] bill is probably beyond the scope of this bill,” but said it is an urgent issue for “several communities that have already hit the levy limit.”
The House, when it adopted its education bill later in October, did not approve a similar amendment filed by Pittsfield state Representative Tricia Farley-Bouvier, a Democrat. Before the House took the bill up, Citizens for Limited Taxation sent a letter to all House Republicans imploring them to keep Farley-Bouvier’s amendment out of the bill. The group said the Senate amendment “is cause for alarm.”
“Over the decades Proposition 2 ½ has come under many stealth attacks in efforts to dilute and circumvent it, so another is not surprising,” wrote Chip Ford, executive director of Citizens for Limited Taxation, in the letter. In a statement, he added, “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.”
The executive branch’s Division of Local Services says that “Proposition 2 ½ revolutionized property tax administration and is a fundamental feature of the Massachusetts municipal fiscal landscape, yet there is still some confusion about its meaning for cities and towns.”
House Speaker Robert DeLeo defended Proposition 2 ½ in 2010 when Republican lawmakers launched an effort to strike language they claimed would permit sizable property tax increases without voter approval from a Democrat-sponsored so-called municipal relief bill.
“Speaker DeLeo does not favor, and will not support, any weakening of Proposition 2 ½,” Seth Gitell, then the speaker’s spokesman, told State House News Service at the time. “The intent of the language in the municipal relief package is to provide cities and towns with a tool for addressing tax abatements and for better managing their municipal budgets. It is not the intent of the bill to affect Proposition 2 ½.”
Then-gubernatorial candidate Charlie Baker said the House proposal would be “dead on arrival” if he were governor.
“Four years after Governor Patrick vowed to cut property taxes, this proposal by House leadership to raise property taxes shows exactly what happens under one party rule on Beacon Hill,” Baker said in a 2010 statement. Patrick had promised to alleviate property taxes as a pillar of his successful 2006 campaign for governor, but failed to deliver in two terms in office.
Bills that would have altered Proposition 2 ½ have been reviewed over the years by the Revenue Committee but have failed to gain momentum in the Legislature. In 2018, since-retired state representative Jay Kaufman talked to WBZ-TV’s Jon Keller about the potential for changes to Proposition 2 ½.
“I think that’s been another one of those third rail issues that we have avoided, quite frankly, and that’s disappointing as well,” Kaufman said. He added, “We need to be taking a look at Prop 2 ½ all over again because it may have made a lot of sense when it was first initiated. It’s had some unintended consequences ever since that make it very difficult to make good tax policy.”
