Is your town going to have an override vote? What that means
Voters in Braintree could be asked whether to support a measure that would raise their property taxes in order for the town to avoid more widespread layoffs, loss of services and to move the budget back in the black. And the town of Hanover will ask its voters to do the same in May.
For more than four decades, municipalities in Massachusetts have been limited in how much revenue they can raise from local property taxes without voter intervention.
Voters across the South Shore have been asked in recent years whether to approve or deny a tax increase to pay for various needs, either on a temporary or permanent basis. Last year, Hingham voters supported a temporary $7.9 million tax increase and Cohasset voters at town meeting blocked a $23.5 million proposed increase.
Braintree voters for the first time passed a temporary tax increase to pay for the new South Middle School in 2020, but have never supported a permanent override when asked on ballots in 1997 and 2003.
Here’s what else to know about Proposition 2½.
Previous coverage: Braintree school budget plan: Cut 33 jobs. Will there be a tax override vote?
What is Proposition 2½?
This was a citizen-led initiative that was voted on in 1980 and enacted two years later. It constrains the amount of money towns and cities could raise from local property taxes to pay for its operations.
How does Proposition 2½ relate to a town's budget?
Proposition 2½ limits towns in two ways so that it can't just set a budget and fund it by raising whatever taxes it wants.
First of all, know that levy is just a fancy word for the tax revenue generated from real estate or personal property.
LEVY LIMIT: This is the maximum amount of money that a municipality can get from property taxes in any year for its budget. A simplified calculation goes like this: the previous year’s levy limit, plus a 2.5% increase, plus whatever new growth happened over the past year.
THE LEVY CEILING: This is what determines the maximum amount a levy limit can be. It is 2.5% of the full cash value of all taxable property in a municipality. This number changes every year. Think of these as nesting dolls: the levy limit must always be smaller than the levy ceiling.
Then, the tax rate is calculated. Those rates in Braintree are typically approved by the town council in November or December for the next year and must be finalized by the state Department of Revenue. Sometimes, there isn't enough money to meet budgetary needs and an override vote looms.
Only voters have the power to increase or decrease the levy limit, either permanently or temporarily. In other words, voters have a say in whether a town gets to increase or decrease taxes instead of just using the formula of a 2.5% increase plus last year's new growth.
What is an override? What is an exclusion?
The key difference between an override and exclusion is the permanence. A tax override permanently changes the levy limit, whereas an exclusion temporarily changes this limit for a specific purpose.
Voters can support an override to allow revenues to increase beyond the annual 2.5% increase and new growth, but it is still restricted by the levy ceiling, or 2.5% of the municipality’s value of all taxable property. The override permanently becomes part of the levy limit base and can be used for any purpose.
What is an underride? Do towns ever really have them?
An underride permanently lowers the levy limit base.
Since 1992, the only South Shore town to have an underride vote is Plymouth, where voters approved it in 1995, reducing taxes by a total of $2 million.
In all of Massachusetts, there have been only 24 underride votes since 1993; voters passed 22 of them. (Overrides are not nearly as popular for obvious reasons. For example, just the town of Abington has had 5 override votes since 1990. Three of them passed – one by just five votes.)
Not all tax votes are the same
There are two types of exclusions, which are meant for specific purposes: debt and capital outlay expenditure. A debt exclusion raises money for a loan that a municipality takes out to pay for a project. A capital outlay expenditure exclusion raises money for capital projects like new public buildings or repairs to existing ones.
The exclusion is an amount added to the levy limit for a set period of time.
How does an override or exclusion get to voters?
A tax override or underride requires a majority vote of a municipality’s select board or council for it to be placed on the ballot. An exclusion requires a two-thirds vote from the select board or council before it can go to voters.
Voters must be told the dollar amount as well as the purpose for the tax increase. A majority of voters must support the override or exclusion for it to pass.
Ahead of past override or exclusion votes, some towns have offered their residents a calculator to determine an estimate of how much their property taxes would increase.
For communities that have an open town meeting form of government, voters effectively vote on the override or exclusion twice. First, voters must pass a budget that accounts for the proposed override or exclusion amount at town meeting. If that passes, voters will decide on the actual override or exclusion.
This will be the case for Hanover voters during their town meeting on May 6 and their town election on May 18. They will be asked whether to support a $6 million override, to go into effect July 1.
The next Braintree Town Council meeting will take place at 7:30 p.m. April 30 at Cahill Auditorium, 1 John F. Kennedy Memorial Drive.
Hannah Morse covers growth and development for The Patriot Ledger. Contact her at hmorse@patriotledger.com.
This article originally appeared on The Patriot Ledger: Proposition 2½ overrides: What you need to know
