Students, seniors, and property taxes
When canvassing door to door, one of the clearest divisions I see is whether or not residents want their property taxes increased. Generally speaking — and this is a very broad brush — families with young kids want to see the increase happen to put more money into the school system (many are spending more on private schools anyway) while older residents who are living off a fixed income can see that things need to be fixed, but they won’t be able to afford the increase.
As noted in a recent newsletter by the vice-chair of the school committee, Medford is currently paying 31 staff members on one-time pandemic relief funds that are set to run out in 2024. On September 7th, a day that hit 90 degrees, the air conditioning in Medford High School was not operational. All of this points to the fact that Medford’s schools are underfunded. To get more money into the schools, Medford would need to pass a Proposition 2.5 override.
Proposition 2.5 is a 1980 Massachusetts law that doesn't allow the amount of money a city takes in every year from property taxes to increase by more than 2.5 percent. So, if the city received $10,000,000 in 2020 from property taxes and built exactly nothing that year, they would not be able to take in more than $10,250,000 in 2021. This can be a problem because inflation is usually more than 3%. There is an exception for new growth. If Medford built a giant arcade worth $5,000,000, then we could take in more money by taxing the new arcade. The easiest way to understand Prop 2.5 is to read the Wikipedia page and mentally replace "tax levy" with "all the money from property taxes".
What this mathematically implies is that if, barring growth, a municipality fails to increase its property tax rates for years and years — which, for instance, a politician may do for several terms to get re-elected — it's going to be underfunded for years to come, because there's limited opportunity to make up the difference later on. Medford is historically underfunded, inflation is usually more than 3%, and our property taxes are lower than those of surrounding municipalities. In 2023, we had 8.65% residential and 16.56% commercial rates, which gives us the 36th lowest residential tax rates in Massachusetts, out of 352 listed cities. Somerville and Melrose are 64th and 65th, Salem is 135th, and Everett is 107th. (Commercial rates vary across the board a bit more — in that area, Medford is at 211/352, so our commercial taxes are contextually high.)
In order to increase taxes by more than 2.5%, an override of Prop 2.5 is required. An override for any given year needs to be voted on at the ballot box. Do I support putting an override on the ballot? Yes. Yes I do. It is one important mechanism to get more resources into Medford. We need more businesses and more city staff to apply for grants, which will bring money eventually. But an override is the most immediate way to get more money.
Politically, I think that three things are needed to make an override successful.
The first thing needed to pass a Prop 2.5 override is a way for fixed-income seniors to not be so impacted by it. One way to do this is to allow them to defer any increases in property taxes. A mechanism for this, explained nicely in this Globe article, was actually implemented in Medford by Councilor Morell. If a fixed-income senior lives in a property and doesn't want to pay the increase, they can simply defer it until they sell their house. So, if they defer $60,000 worth of taxes and sell their house for $1,000,000, they get $940,000 [Note, Sept 11, 2023: this rough example doesn’t account for interest rates that accrue on deferred taxes, which Medford sets at 5% annually]. For this, I actually think that dropping money on a mailer to residents explaining the process and their options would be a worthwhile investment. There would also need to be dedicated staff to support seniors who want to enroll in the deferment program. I met a few weeks ago with Senator Jehlen, who chairs the Joint Committee on Elder Affairs, to pick her brain on other ways to protect fixed-income seniors from these sorts of increases. If I am elected and a Prop 2.5 override is on the horizon, making sure seniors aren’t priced out of Medford will be a top priority for me.
The second thing that's needed is support of the mayor. Neither the current mayor nor her challenger have expressed support for an override at this time. Both have expressed support for a debt exclusion, which is a temporary, project-based increase in taxes. This is less politically risky and could help with building projects, like installing a working air conditioning system in the high school. But for long-term, continuing expenses — pretty much anything involving increasing the number of staff or settling union contracts — a full override is necessary. The idea there is that new growth in Medford will address many of our financial problems, though an override would be more immediate, and residents with kids entering high school are more interested in the immediate.
The third necessity is clear messaging of how the money will be spent and — even more importantly — making it abundantly clear to voters that Medford's financial situation isn't great. This would help it get passed. I've been browsing through the state database of Prop 2.5 override votes. Across all municipalities, override votes have won 1810 times and lost 2621 times — about a 41% win rate. Medford, like many of the larger municipalities in Massachusetts, has never had a vote in its history. Among the various elections for the 301 municipalities that have, winning votes average $405,395 requested, while the losing votes average $298,376. 576 of these votes list nonspecific reasons, like "General Operating Budget", for the override (note that I isolated these based on a few text matches — this is a rough picture), and these requests average out at $708,613; of these, 273 passed and 303 did not. That's 47.4%, so better than the average. 1071 of these reasons contain the word "School" (so, the override was to fund various school expenses), averaging at $600,939, with a win rate of 46.8%.
The picture this paints for me is that towns and cities that are in more financial trouble — i.e., can't fund basic municipal and educational operating expenses — would tend to vote for larger overrides, at rates that are at least above average. So, in my view, Medford's chances of voting on this are fairly good, and we really need the money.
