Ballot Question 1 Explained

Weston Town Crier, May 6, 2021
The following was submitted by John Sallay

The Weston town election is this Saturday, May 8. If you are registered and have not already voted by mail, you can vote in person at Town Hall from 8 a.m. to 6 p.m. on Saturday. In addition to several elected positions on the ballot, there is a Ballot Question 1: Proposition 2 ½ Debt Exclusion, explained here in layperson’s terms. And that, in turn, raises some larger issues about the current relevance of Proposition 2 ½ in Weston.

Ballot Question 1 is not really about the specific projects mentioned in the Warrant book, but about Weston’s debt and disappearing spending constraints. You can vote “No” on Question 1 and still vote “Yes” at town meeting to support the three projects.

Ballot Question 1
Briefly, this ballot question asks, “Shall the Town of Weston be allowed to exempt from the provisions of Proposition two and one-half” the debt service payments for 1) some drainage improvements, 2) roof replacement on one wing of the High School, and 3) a new fire truck. These three projects result in $2.2 million of new town debt, requiring annual debt service payments of about $220,000.

These three items are largely uncontroversial and are supported unanimously by the Finance Committee. But this ballot question is not about whether these worthy municipal initiatives should be approved. It is at town meeting next week that residents will determine whether to approve them.

Rather, Ballot Question 1 simply asks whether the debt service from these items should be excluded from the Proposition 2 ½ constraints on tax increases. If the ballot question passes, but the initiatives themselves do not pass at town meeting, the Question 1 exclusion vote does not matter.

Proposition 2 ½
In 1980, Massachusetts voters approved a ballot initiative called Proposition 2 ½. In that period of more rapid inflation, the voters were attempting to gain greater control over their continually escalating local property taxes.

Fundamentally, Prop 2 ½ says that local governments cannot raise taxes from one year to the next by more than 2 ½% plus the rate of “new growth”, meaning the incremental value of new construction and major additions. So, if a town’s real estate appraised value is growing at, say, 1% above the rate of appreciation on existing homes, with Prop 2 ½ in place, taxes could be increased in this case by 3 ½%, but not more.

Exceptions can be made, however, with a two-thirds vote for an overall annual budget that allows the taxes to increase above the Proposition 2 ½ limits. Normally, a budget can be passed at a town meeting with only a majority vote. Weston has approved nine of these general overrides in the last 40 years, the last one in 2007, and only once defeated a general override, in 1998.

Exceptions can also be made with a two-thirds vote to exclude the debt service payments for specific debt-funded projects. These can range from the three relatively small projects this year, to major projects like the new high school science labs in 2012 and new police station in 2015 (each $12 million).

The debt service payments are still funded by our property tax bills, but do not count against the Prop 2 ½ constraints. Weston has voted for such exclusions literally every year since the law was first implemented in 1983. At this point, all of Weston’s outstanding debt has been excluded.

Excess Levy Capacity
Another important aspect of the constraints imposed by Proposition 2 ½ is that they are cumulative, meaning they add up if not completely used, creating headroom for future budget increases. Take, for example, a town adding about 1% new growth every year. The increase in the “levy limit” would then be 3 ½%, the 2 ½% constraint plus the extra 1% from the new growth. But if in one year, the budget increased only 3%, the town could save the extra ½% for future use. The following year, the town could increase taxes by 4%, the 2 ½% plus 1% new growth, plus the ½% left over from the year before.

Until about 15 years ago, Proposition 2 ½ was a meaningful constraint on Weston’s budget growth. Although we always (except once) approved the overrides, our budgets that grew faster than allowed by the Prop 2 ½ constraints required a two-thirds vote for approval.

Since then, however, our “unused levy capacity”, the sum of the annual differences between the Prop 2 ½ levy limits and our actual budget growth, has accumulated to nearly $10 million, or about 12% of the total tax levy. This unusual growth resulted from several factors, but primarily our annual votes to exclude all debt-funded projects.

The implication is that a Weston town budget with an annual increase of over 15% (2 ½% plus new growth of around 1% plus 12% unused levy capacity) could now be passed with only a majority vote at town meeting!

Last year, a concerned resident asked about submitting a citizen’s petition for an “underride”, to rescind this built-up excess levy capacity. While such an underride is possible within Proposition 2 ½, he was informed that under Weston’s bylaws, an underride is not possible by citizen’s petition, but would require the approval of the Select Board, and would not be considered.

Again, Ballot Question 1 is not about the three specific projects, but about Weston’s debt and disappearing spending constraints. Remember, you can vote “No” on Question 1 and still vote “Yes” at town meeting to support the three projects.