New report says cities and towns struggle with property tax limit, shrunken state aid

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City and town officials in Massachusetts have long lobbied Beacon Hill for more power to tax and spend within their borders, with limited success.

But the Massachusetts Municipal Association (MMA), the nonprofit that represents the state’s 351 local governments, is hoping to restart the conversation with a new report it commissioned.

Handled by Tufts University’s Center for State Policy Analysis, the report suggests that Prop 2 ½, the cap on property taxes, may be “too restrictive.” Adam Chapdelaine, the MMA’s executive director, says that’s “not the whole story,” and changing the decades-old, voter-approved measure “will not fix every city or town’s problems.” (Any attempt to change the measure would also face significant headwinds, with some considering it almost sacrosanct.)

That puts focus on what the report says about the state aid to cities and towns that lawmakers like to tout. The aid level is actually “sluggish,” falling below the nationwide average, and it’s eroding the ability to fund services. The MMA is looking to build a case for finding a way back to higher levels, as well as for Gov. Maura Healey’s twice-proposed “Municipal Empowerment Act,” which offers the option of raising taxes on hotel stays and vehicles.

The MMA plans to release its proposed policy solutions in November. For now, they’re focused on outlining the problem. Between 2010 and 2022, inflation-adjusted spending on Massachusetts municipal operations grew 0.6 percent per year, slower than the U.S. average, and “vastly slower than the growth in real spending through the state budget, which has risen at roughly 2.8 percent per year,” the report said.

Unsurprisingly, the budgetary pressures facing cities and towns vary, depending on whether they’re urban centers, the suburbs, or rural areas, which count more trees than people. The declines in state aid have limited rural and suburban towns’ education spending, and rural towns have had to “aggressively” raise salaries to keep “their starkly shrinking public workforce from being truly hollowed out,” the report said.

Prop 2 ½ allows for tax overrides, but they are an expensive voter referendum in addition to being a “short-term fix,” according to the report. While there has been an increase in overrides, overall nearly 200 out of 351 cities and towns have not had one in the last 15 years, despite their financial struggles. “Overwhelmingly, it’s the suburban towns that have been able to pass overrides in recent years, helping them to maintain services when local needs exceed the state-imposed tax restrictions,” the report said.

Rural communities have an “acute problem: not only is it challenging for them to pursue temporary overrides, but a lack of local income and wealth makes it difficult for them to raise local taxes at all.” the report added.

The MMA’s Chapdelaine said the report confirms what he’s heard anecdotally from city and town officials. “We have no interest in a blame game for any of this,” he said, when asked about the report, and its conclusions about state aid. “We have an interest in taking stock of where cities and towns are, and the stresses, and working collaboratively to alleviate these challenges.”

When I recently wrote up Mayor Wu’s comments criticizing Prop 2 1/2, my inbox flooded with emails from readers on all sides of the topic. What’s your take on the MMA’s report, which comes ahead of an Oct. 28 hearing on Gov. Healey’s “Municipal Empowerment Act”? Drop me a line: [email protected].

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HAPPENING TODAY

8:30 | Massachusetts Health and Hospital Association holds its Communications Summit, which will bring together communications officials at hospitals and health systems. Sam Melnick, chief communications officer at MHA, gives welcome remarks. | MHA Conference Center, 500 District Ave., Burlington | More Info and Register

10:00 | U.S. Court of Appeals for the Federal Circuit holds a special sitting at UMass Dartmouth School of Law. The court is slated to hear four cases. | UMass School of Law, Rooms 231 & 232, 333 Faunce Corner Road, Dartmouth

10:00 | MASSPIRG hosts legislative briefing on PFAS, which begins with a PFAS "show and tell" to inform attendees of the common products that contain PFAS and alternative products that are the same but don't include the so-called forever chemicals. | Room 428, State House, Boston

11:00 | Auditor Diana DiZoglio speaks at the Mass. Retirees United Luncheon. | Teresa's Prime Steakhouse, 20 Elm St., North Reading

2:00 | The Department of Public Utilities holds a public hearing regarding Eversource’s petition for a 10-year firm transportation agreement with Algonquin Gas Transmission. The agreement will provide increased natural gas supplies to customers in New Bedford, South Attleboro, and/or Taunton, according to a DPU advisory. | More Info & Access

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FROM BEACON HILL

TIES THAT BIND: In announcing a slate of judicial picks, Gov. Maura Healey has nominated an attorney who works for her partner, Joanna Lydgate, to serve as a Superior Court justice. – Boston Globe

SERVICE PLAZA REQUEST: Beacon Hill Republicans are asking the state inspector general to review the bidding process that imploded after the losing bidder waged a campaign against Dublin-based Applegreen, the winning bidder. –Boston Herald

NEWS NEXT DOOR

SOCCER STADIUM SAGA: Everett Mayor Carlo DeMaria has been eager to get going on the Kraft Group’s proposed soccer stadium near the Encore casino. But surrounding mayors and city officials from Revere, Malden and Medford, echoing Boston’s Michelle Wu, say they haven’t received requested information about the project. – Boston Globe

MASSMUTUAL INVESTIGATION: Regulators at the Securities and Exchange Commission have issued subpoenas as part of their investigation into insurer and asset manager MassMutual’s investment operations. — Wall Street Journal

MBTA COMMUNITIES: Voters in Hanson reversed course and approved zoning rules to come into compliance with the MBTA Communities law, while voters in Carver overwhelmingly rejected a zoning plan. – Patriot Ledger

VACCINE CONFUSION: The federal government’s stance on vaccines is causing confusion and misinformation, Massachusetts public health officials said. – WBUR

FENCED OUT: With little notice and explanation, the MBTA put up a fence on the station-side platform at the commuter rail’s Worcester terminus, forcing riders to use a center platform. – StreetsBlogMass

MOBSTER BAR: Celebrity chef Gordon Ramsay’s suggested re-branding of a Dorchester bar – encouraging owners to lean into mobster history – has led to some neighbors expressing discomfort with large photos of crime lord Whitey Bulger and his hitman. – Dorchester Reporter

NEXT STOP, PALMER: Plans for a Palmer passenger rail station are trundling along, but the owners of the Steaming Tender restaurant inside an old station are asking questions about why their site was dropped from consideration. – MassLive

IN MEMORIAM: Joan Kennedy, a mental health advocate and the late Ted Kennedy’s first wife, died. She was 89. – Associated Press

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