Affordable Housing Institute : US

How we raise revenue for essential government services powerfully affects which government services we buy, and how much control customers have over those services.

 

For two and a half decades, ever since 1980, when Massachusetts voters enacted Proposition 2½, local real estate taxes (or rates as they are called in Britain) have been capped at 2½% of assessed value — that is, a $500,000 house can pay no more than $12,500 in taxes.  Such taxes, which are very high relative to other nations, are the core revenue source for local government (cities and towns), where they directly fund schools, police, fire, and many other services.  As a safety valve, however, as a fascinating new study from Mass INC (free registration required) points out:

 

 

… officials can bust this cap if – and it’s an increasingly big if - they can get a majority of voters to agree.

 

A glance at Mass INC’s outstanding township map reveals the wide disparity in Prop 2½ overrides:

 

 

You might think poorer communities in the western part of the state, whose property has lower value and who thus have smaller budgets, would most need to override the cap — but you’d be wrong.  It’s the affluent suburbs around Boston, and the tony enclaves on Cape Cod (the scrawny arm at lower right), Martha’s Vineyard (Napoleonic hat island), and Nantucket (the sickle-shaped island):

 

But in smaller communities, especially on Cape Cod and the islands, Prop. 2½ has resulted in dozens of votes on tiny, narrowly defined spending requests. Chatham, Tisbury, and West Tisbury have each put more than 90 override questions to voters since the cap was enacted.

 

One place that hasn’t overridden Prop 2½?  The City of Boston itself (the white irregular patch at right center).

 

Prop 2½ and other tax cuts are both a leash on politicians and a voter impulse-interrupt device, a legacy of the New England town meeting, whose citizen-government is enshrined in American iconography:

 

 

This makes government more responsive (Google “Proposition 2 1/2 Massachusetts and watch the local-government sites pop up offering you town budgets!) because there is a very active retail-level citizen politics:

 

In all three communities, about half the overrides have passed, suggesting a deliberate evenhandedness on the part of voters.  Did Chatham voters approve $2,600 for Christmas lights in 1989 because they could reject $2,600 for portable radios for the fire department on the same ballot?

 

The grand-daddy of all such real estate tax caps is California’s landmark Proposition 13, enacted in 1978 and fueled by garrulous citizen advocate Howard Jarvis,

 

 

who rode its success to fifteen seconds of movie fame and left an enduring legacy that today divides California politics. 

 

“All politics is local politics,” said Thomas P. (Tip) O’Neill, who rose to Speaker of the House of Representatives from humble beginnings in the Irish wards of North Cambridge.  And in local politics, voters often show the same horizon-effect thinking as Saint Augustine, who lamented:

 

O God, give me chastity … but not yet!

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