Celebrating Proposition 2 1/2
Proposition 2 1/2 was passed by voters on Nov. 4, 1980. It was a revolution, a passionate and controversial ballot campaign; now, 25 years later, it is an institution. Yes, once upon a time the property tax burden was the second-highest in the nation, which called us Taxachusetts.
Over the decades, taxpayers had been promised lower property taxes in return for other revenue sources. So by 1980 we had a high income tax, a sales tax, a lottery, and high property taxes. Further, we were one of the few states with an automobile excise and something called school committee fiscal autonomy, which gave local schools any amount of money they requested regardless of the wishes of city councils or town meetings.
On top of this, instead of getting a fair share of state tax revenues in local aid, the cities and towns had to fund any new bright idea that came down from Beacon Hill. And on top of that, the courts had just ordered all communities to comply with the state Constitution and assess all property at its full and fair market value. Many homes were assessed much lower; people imagined the communitys existing tax rate being applied to their homes true value.
Between outrage at broken tax-relief promises and panic about the coming revaluation, Proposition 2 1/2 was born. Citizens for Limited Taxation (CLT) collected signatures on an initiative petition that limited property taxes to 2.5% of a communitys value, cut the auto excise from $66 per $1,000 to $25 per $1,000, gave renters an income tax deduction, repealed school committee fiscal autonomy, and forbade new unfunded state mandates on cities and towns.
Battle lines were drawn: CLT, the Mass. High Technology Council, the Mass. Auto Dealers Assoc., and the National Federation of Independent Business against almost everyone else. Leading opponents were the Legislature, the Mass.
Municipal Assoc., the Mass. Taxpayers Foundation, the Mass. Teachers Assoc. and other public employee unions, various human service organizations, the Mass. Council of Churches, the Catholic Church, and, incredibly, the Mass. Assoc. of Older Americans.
Union fliers featured either a picture of a gun shooting backward, titled “How Prop 2 1./2 Works,” or the heading “Cutting Taxes? Or Cutting Our Throats? Human service fliers featured a senior with a walker, a young man in a wheelchair, and a couple of minority kids looking terrified. There were debates galore, hours of talk radio devoted to the issue, yard signs, and bumper stickers.
The League of Women Voters held onesided forums that presented only its point of view: Prop 2 1/2 will cause drastic cutbacks to basic public services.
Nevertheless, the people passed Prop 2 1/2, 59%-41%.
Then the battle really began: public employee marches, demands for repeal. But the Leguslature, getting the message, decided to work with the peoples law. CLT teamed up with the MMA, legislative Republicans, and conservative Democrats to get more local aid. With Gov. Ed King promising a veto of any changes that would damage Prop 2 1/2, a sensible provision for new growth was added, and the two-thirds vote for an override became a majority vote for various kinds of overrides, intended for bonded projects or emergencies.
Local officials were more respectful of taxpayers whose support might be needed to pass them. Local aid increased almost every year. Opponents who prophesied the end of the world looked silly.
Back then, of course, it was impossible to imagine voters raising their own taxes for operating expenses and teacher pay raises.
Twenty-five years later, the property tax burden is still too high, at eighth in the nation.
The long-term goal, to get education spending off the property tax, has yet to be realized, But individual taxpayers have saved a bundle on both the property tax limit, the rental deduction, and the auto excise cut. Twenty-five years later, Proposition 2 1/2 is still cause for celebration.
Barbara Anderson is executive director of Citizens for Limited Taxation, which created Proposition 2 1/2.
