Proposition 2½
Proposition 2½ is a Massachusetts law passed by voters in 1980 in an attempt to keep property taxes predictable and give communities control over local tax increases. The law sets strict, rigid limits on how much property tax revenue a city or town can collect each year.
Here's how it works:
2.5% annual growth cap: A municipality's property tax revenue can only increase by 2.5% per year, plus revenue from new construction
Levy ceiling: Cities and towns cannot collect more than 2.5% of the total assessed value of all taxable property
What this means: Even if property values soar, expenses drastically increase, or inflation spikes, total property tax collected can still only grow by that 2.5% cap
Costs go up much faster than 2.5% per year
The system was designed over 45 years ago to protect taxpayers from runaway tax bills. But here's the catch: 2.5% annual growth usually can't keep pace with the actual costs cities face. The price of everything from road salt to health insurance to teacher salaries tends to rise faster than 2.5% a year.
Over decades, this gap compounds, and communities find themselves doing more with less until eventually, "less" means devastating cuts to schools, public safety, infrastructure, and services. That's the bind many Massachusetts cities and towns face today, including Malden.
So what's an override?
So what's an override?
When a community needs to raise more revenue than Prop 2½ allows, state law gives voters the power to approve an "override" — a permanent increase to the tax levy that becomes part of the base budget going forward.
An override isn't a workaround or a loophole; it's the mechanism specifically built into the law to allow communities to invest in services that matter to them.
Malden has never passed an override in its history. The March 31st vote represents the first time residents will decide whether to authorize additional funding to address the City's budget gap and prevent cuts to essential services.