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Can local governments give citizens what they want? Referendum outcomes in Massachusetts

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  • Katharine L. Bradbury

Abstract

Economists and political scientists have long debated the nature of the process that determines government taxation and service levels in a democracy. During the 1980s, the role of referenda in determining city and town property taxes, and hence local spending, increased dramatically in Massachusetts. This article uses recent Massachusetts experience to examine the degree to which citizens \"get what they want\" from the local public sector and what it is they seem to want. ; The passage of Proposition 21/2 in November 1980 signalled both a shift in statewide voter sentiment against local officials previously \"unfettered\" decision-making and a change in rules, making it more difficult for localities to raise property taxes, their only major local revenue source. The impact has been uneven across communities. Nonetheless, until late in the decade, both sizable additions to local aid and a booming real estate market allowed many communities expenditures to grow moderately without bumping against their Proposition 2 limits.

Suggested Citation

  • Katharine L. Bradbury, 1991. "Can local governments give citizens what they want? Referendum outcomes in Massachusetts," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 3-22.
    • Handle: RePEc:fip:fedbne:y:1991:i:may:p:3-22
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    File URL: http://www.bostonfed.org/economic/neer/neer1991/neer391a.pdf
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    Cited by:

    1. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 203-230, June.
    2. Jeffrey Zabel, 2014. "Unintended Consequences: The Impact of Proposition 2½ Overrides on School Segregation in Massachusetts," Education Finance and Policy, MIT Press, vol. 9(4), pages 481-514, October.
    3. Bradbury, Katharine L. & Mayer, Christopher J. & Case, Karl E., 2001. "Property tax limits, local fiscal behavior, and property values: evidence from Massachusetts under Proposition," Journal of Public Economics, Elsevier, vol. 80(2), pages 287-311, May.
    4. Wenchi Wei, 2021. "State fiscal constraint and local overrides: a regression discontinuity design estimation of the fiscal effects," Public Choice, Springer, vol. 189(3), pages 347-373, December.
    5. Luz Amparo Saavedra, 2000. "Do Local Governments Engage In Strategic Property- Tax Competition," Borradores de Economia 2378, Banco de la Republica.
    6. Cutler, David M. & Elmendorf, Douglas W. & Zeckhauser, Richard, 1999. "Restraining the Leviathan: property tax limitation in Massachusetts," Journal of Public Economics, Elsevier, vol. 71(3), pages 313-334, March.
    7. Luz Amparo Saavedra, 2000. "Do Local Governments Engage in Strategic Property- Tax competition?," Borradores de Economia 139, Banco de la Republica de Colombia.
    8. Andrew Reschovsky & Amyellen Schwartz, 1992. "Evaluating the Success of Need-Based State Aid in the Presence of Property Tax Limitations," Public Finance Review, , vol. 20(4), pages 483-498, October.
    9. Hawley, Zackary & Rork, Jonathan C., 2015. "Competition and property tax limit overrides: Revisiting Massachusetts' Proposition 2½," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 93-107.
    10. Wallin, Bruce & Zabel, Jeffrey, 2011. "Property tax limitations and local fiscal conditions: The impact of Proposition 2½ in Massachusetts," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 382-393, July.
    11. Katharine L. Bradbury & Bo Zhao, 2007. "Measuring disparities in non-school costs and revenue capacity among Massachusetts cities and towns," Working Papers 06-19, Federal Reserve Bank of Boston.

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    Keywords

    Local finance; Massachusetts;

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