Property tax limits, East and West: the squeeze is on; Massachusetts: impact of Prop. 2 1/2 cuts taxes, and services, statewide
Steadily climbing property taxes may be a thing of the past in Massachusetts. Although it is too early to accurately assess the long-range impact of the current efforts by cities to tighten their belts, progress is being made.Skip to next paragraph
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Tax reductions -- several of them of substantial proportions -- have been achieved in all but one of the first 17 cities and towns to set their 1982 property tax rates. The lone exception held the line at last year's level.
These and scores of similar actions to come over the next several months are the fruits of a voter-mandated tax rollback.
The controversial measure, approved by a nearly 3-to-2 margin by Massachusetts voters last November, is patterned after Proposition 13, a tax-restricting measure passed in California in June 1978.
Under Proposition 2 1/2, as the Massachusetts statute is best known, each community is limited in its revenue-raising to an amount equal to 2 1/2 percent of the total full-market value of all property within its boundaries.
At least 184 of the commonwealth's 351 municipalities thus had little choice but to trim their spending this year.
Although most have yet to complete the necessary budget-slimming process, headway is being made, albeit with considerable strife and criticism.
Some 12,000 municipal employees, at least 6,000 of them teachers, have been laid off or are scheduled to be let go.
Also substantially represented in the Prop 2 1/2 payroll thinning are police and firefighters, public-works employees, and clerical personnel.
Tallies of layoffs are all but impossible to keep, since the situation is fluid with people still being let go and others brought back, explains Allan Tosti of the Massachusetts Municipal Association.
The 12,000 figure, however, he says, is "reasonably accurate" in terms of eliminated jobs.
Pointing out that no two communities have been faced with the same situation or have responded to their budget-cutting challenge in the same way, Mr. Tosti and others close to the scene say that libraries, recreational programs, and public works are among the major casualties of the revenue squeeze.
Many cities and towns are averting, at least temporarily, even heavier personnel reductions by using cash reserves to partially make up for revenues lost through the Prop. 2 1/2-forced tax reductions.
Others are postponing equipment replacement and deferring road repair and other essential improvements. Even so, "there is a limit to how long this can continue," cautions Richard Manley, president of the Massachusetts Taxpayers' Foundation.
Teacher layoffs are only about half as numerous as was predicted last spring.
Many of the threatened school workers, as well as those on police and fire forces, were spared when state aid to cities and towns was increased in July by including $265 million in additional local aid in the 1982 state budget.
The increased funding brings to $1.6 billion the portion of the commonwealth's $6.3 billion annual budget earmarked for municipalities.
Considerable dispute, howeveR, still surrounds the allocation of the additional aid to communities. Under the distribution arrangement announced in August, some municipalities stand to receive several times the amount they will lose in property tax revenue under Prop. 2 1/2.
For example, the town of Harvard, in the heart of the apple country northwest of Boston, is promised over 900 percent of what it will lose in decreased local real estate taxes. Boston, on the other hand, will receive only 44 percent as much in state aid as it will lose in property taxes. Nearby Everett will recoup only 13 percent of its property tax losses.
The tax cut mandate has made it possible for Boston to chop its levy $41.80 to$230.90 per $1,000 of assessed valuation, the first reduction since 1966.
The biggest fiscal 1982 property tax reduction thus far is in Revere where thetax of $221.20 per $1,000 is $48.80 less than last year.
A similar reduction will be required in fiscal 1983, which commences next July 1, and again in fiscal 1984, if the city is to fully comply with Prop. 2 1/ 2.
Mayor George V. Colella warns that these further reductions will be impossibleunless modifications are made in Prop. 2 1/2 or new state taxes provide replacement revenues.
Others close to the scene, including officials of the Massachusetts Municipal Association, are similarly concerned over the adverse impact of the already required tax ratecuts over the next two years.
Sixty-two cities and towns will not reach full compliance with Prop. 2 1/2 until fiscal 1983 and 33 others, including Boston, until fiscal 1984.
Ordinarily by this time of year well over a half of the commonwealth's cities and towns have set their annual property tax rates.