What is a Proposition 2 ½ override? A primer

  • Voting stickers. GAZETTE FILE PHOTO

Staff Writer
Published: 1/17/2020 3:25:24 PM

NORTHAMPTON — They are the focus of some political campaigns. They are often the way municipalities raise money for what they say are essential services. They are cheered by some residents and derided by others. 

But for many, the term “override” is municipal jargon. And as Northampton prepares to vote on one, some residents are likely asking the same question: What exactly is a Proposition 2½ override?

Proposition 2½, also known as the Massachusetts Local Property Tax Limitations Act, was passed by state voters in 1980. The law limits the amount of money a municipality can raise through property taxes — the largest source of revenue for most cities and towns — and how much that amount can be increased every year.

The amount of revenue that a community can raise through property taxes is known as the “levy.” 

Proposition 2½ bars a community from increasing the levy by more than 2.5% of the total value of all taxable property in that municipality. That is known as the “levy ceiling.”

The law also places a “levy limit” on how much a community can increase its levy from year to year. That limit is always below or equal to the levy ceiling.

There are ways around those levy limits, however. For starters, a municipality’s levy limit automatically increases every year by 2.5% over the previous year’s levy limit. And if the community’s tax base increases, it can increase its levy limit to reflect that growth.

There are also Proposition 2½ overrides, which allow a community to tax its residents and businesses above that 2.5% yearly increase and any growth in the tax base. 

A Proposition 2½ override is a permanent increase to property taxes and must be approved by voters after a select board, city council or town council votes to place an override question on the ballot.

Last month, Northampton’s City Council voted to put a $2.5 million Proposition 2½ override on the ballot. Residents will vote on the override on March 3.

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