Property taxpayers across the country are sending a loud message: enough is enough. Rising property tax bills are not a challenge unique to any one state, they are a national theme, and taxpayers are increasingly pushing back. In states without strong guardrails, that frustration is translating into calls for legislatures to step in and provide meaningful protection. Massachusetts offers a good example of what those protections can look like. Its longstanding Proposition 2½ limits how quickly property taxes can grow, while also allowing voters a direct say when local officials seek to go beyond those limits.
In fact, a recent override defeat at the ballot in the small town of South Hadley, Massachusetts, illustrates exactly how that protection works in practice, and why similar safeguards are gaining attention elsewhere. Voters there overwhelmingly rejected (65%-34%) a measure that would have allowed the city to raise $11 million in new property tax revenue. If the measure had been approved taxpayers would have seen a 50% increase in their property tax bills. In addition, voters also rejected a smaller $9 million proposal that was on the ballot.
The debate surrounding the override garnered national attention not only because of the overall interest in property tax reform, but the campaign on both sides within the city of South Hadley was fierce, including allegations of campaign signs being stolen from yards.
The reaction to the results of the override election is similar to what we are hearing in Iowa. Proponents for the override are arguing that painful budget cuts will now be the direct result. As a result “funding for school sports and extracurriculars, library accreditation, full hours at the Senior Center, and current staffing levels,” among others will be in jeopardy. One local official even said it could lead to a “decrease in the student population,” and reduced police and public works.
Property taxpayers viewed the situation differently. Affordability is a major concern for many citizens, and higher property tax bills are not helping. Voters who opposed the override stated that they wanted the city government to find more efficiencies in government and less taxes. “They keep taking money out of the taxpayer’s pocket. I hate to see cuts, but that’s what I do in my own budget when things get tight,” reflected one concerned taxpayer.
How did South Hadley get to this position? The city is currently confronted with a $3 million budget gap for Fiscal Year 2027. To fill the budget gap the city called for an override of Massachusetts proposition 2 1/2, which serves as the state’s property tax cap or levy limit.
In 1980, Massachusetts voters approved Proposition 2 ½, in response to escalating property taxes. Proposition 2 ½ established two types of levy limits:
1. The law imposes a ceiling on the total property tax revenue that municipalities can raise, which is capped at 2.5 percent of the assessed value of all taxable property within the municipality.
2. The law additionally imposes a levy limit, restricting the amount the levy can increase from year to year. The levy limit will always be below or equal to the levy ceiling. The levy limit for a municipality is based on the previous year’s levy limit, not the previous year’s actual levy. The new levy limit becomes the base for the next year’s limit. Each year, the property tax levy can only increase by 2.5 percent, not counting new construction.
According to the Tax Foundation, Proposition 2½ has helped keep property tax growth in check: “With Proposition 2½, property taxes in Massachusetts are still high, but without it, property tax bills would have risen significantly more than they already have in the past 40 years.”
From Massachusetts to Texas (where Austin voters also rejected a property tax increase), taxpayers are spurning efforts by local officials to raise property taxes to support continued government spending. The message is clear: taxpayers expect local governments to examine their budgets and make adjustments, just as families and businesses must do.
Taxpayers are no longer willing to accept the idea that local governments should be “held harmless” from reforms. When local budgets get tight, the answer cannot simply be to look for new funding sources or shift the burden elsewhere. Instead, priorities must be reassessed and spending brought into alignment with what taxpayers can reasonably afford.
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