While Proposition 2 ½ sent a powerful message that municipal spending needs to be kept in check, after 25 years, its effectiveness at fairly controlling spending and reducing property taxes is in question..  Instead, cities and towns that are wealthy have passed numerous overrides, while poorer municipalities have been incapable of doing so and have experienced significant decline in services.  

Among the potential changes to Prop 2 ½ that are under consideration:

Allow municipalities to choose their own Prop 2 1/2 cap: Cities and towns might be allowed to choose, by local option vote at town meeting or city council with approval of the mayor, to either cap the entire property tax levy at 2 ½ percent (as currently provided) OR to cap total municipal budgets at their previous year’s local budget plus the rate of inflation (as certified by the State Treasurer).

Eliminate new growth exemption for development projects inconsistent with the regional plans: Cash-starved municipalities may readily approve commercial/industrial developments that are inconsistent with local or regional plans in order to achieve the new growth property taxes that are currently exempt form the levy limit of Prop 2 ½.  This exemption should only be permitted for developments that are consistent with MetroFuture.  This will encourage more communities to steer development into areas consistent with the regional growth plan.

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