Our Opinion: Taking a look at Proposition 2½

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The landmark education funding bill that Gov. Charles Baker signed into law on Sunday has generated plenty of well-deserved comment, but the law has a provision that could have considerable impact on the state overall: An analysis of the impact of Proposition 2½ with recommendations for possible changes.

Proposition 2½ became law in 1980 during a wave of anti-tax sentiment in this commonwealth in what was then derided, not entirely without merit, as Taxachusetts. Proposition 2½ prevents cities and towns from increasing taxes by more than 2½ percent a year (new growth is excluded) and caps taxation at 2½ percent of the value of all taxable properties within the municipality.

The economic struggles of communities in the western end of the state, however, have exposed the limitations of Proposition 2½. Boston and the economically thriving towns within the Route 128 belt have no trouble living within its restrictions, but towns in the Berkshires, for example, are having increasing difficulty meeting their financial obligations while staying within the limits of Proposition 2½. City and town officials can request an override of Proposition 2½, but this is a tough sell to voters, as North Adams found out in 2011. And communities up against the levy limit of $25 per $1,000 of a municipality's total property value can't resort to an override vote. This is a worrisome problem for Pittsfield and other county communities where operating budgets keep rising, generated in part by increasing health care costs and higher price tags on capital projects and other improvements, and the approaching ceiling restricts revenue-raising proposals.

Boston Globe business columnist Jon Chesto observes that this dilemma confronting Northampton led to the successful legislative effort to take another look at Proposition 2½. New state Sen. Jo Comerford, a Northampton Democrat, observed that a number of towns in her district shared Northampton's dilemma, prompting her to advocate for the provision in the bill calling for a study of Proposition 2½. Proponents say they are not interested in expanding or eradicating taxation limits but believe regional economic inequities must be factored in.

Citizens for Limited Taxation, the state organization that effectively argued for Proposition 2½'s passage, is opposed to this effort and asked Governor Baker to insist that it be dropped from the bill before signing it. He declined to do so, a wise decision. Those objections would have merit if the legislation included changes to Proposition 2½ that had not been adequately vetted with public input but the bill asks only for a study and recommendations for legislators to consider and the public to discuss. Proposition 2½ was passed nearly 40 years ago and Citizens for Limited Taxation should acknowledge the changes that have taken place. By any measure, Massachusetts is no longer Taxachusetts, and economic inequities between rich and poor and east and west require an analysis of Proposition 2½ and its impact on economic health of many communities and the taxpayers within them.

We look forward to the creation of a legislative group to study Proposition 2½ and to its analysis and recommendations. This assessment is necessary and overdue.

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