What the initiative process shows
In 1956, economist Charles Tiebout set out to explain how people choose the communities in which they live. When a family buys a home, as any realtor will remind us, they are also buying a community. Tiebout took this idea seriously.
people choose a community in which to live by sorting themselves out
among like-minded people. This goes beyond simple racial or ethnic affinity
or diversity. Tiebout considered peoples location decisions according
to their willingness to pay taxes and according to their demand for
public goods and services such as schools, open space, cultural amenities
and the like.
that some people want to live in high-tax, high-public-service communities
while others want to live in low-tax, low-public-service communities.
That they do so does not reflect negatively on either choice but shows
how diverse communities accommodate people with diverse tastes.
One of the key
elements of the Tiebout model is the notion that people vote with
their feet. If taxes are high in one community and some residents
dont want all the public services offered by that community, they
can move somewhere else that imposes lower taxes and offers fewer services.
Likewise, if services are poor, they can move to another community that
offers better services and higher taxes.
In the end,
this migration from one community to another reaches an equilibrium,
in which, much like the marketplace, the amenities offered by an individual
community reflect the demand for public services and how much the people
in that community are willing to pay for them. The Tiebout model shows
how like minded people tend to congregate when it comes
to taxes and public spending.
In an effort
to see how people thus sort themselves out in Massachusetts, the Beacon
Hill Institute examined the voting records of the 351 cities and towns
in Massachusetts on major state referenda since 1980 and on Proposition
2 1/2 overrides since 1983. The goal was to determine which communities
in the Commonwealth meet the preferences of persons who prefer limited
government and which meet the preferences of people who prefer more
expansive government. We can label these communities, respectively,
as anti-tax and pro-tax.
seven major ballot questions since 1980, beginning with the grandfather
of them all, Proposition 2 1/2, which limited the ability of local governments
to raise property taxes. The other questions included the successful
repeal of the tax surcharge (1986), the failed rollback of the personal
income tax rate to 4.25% (1990); the successful attempt to raise the
cigarette tax (1992); the failed attempt to institute a graduated income
tax (1994); the successful rollback of the personal income to 5% (2000)
and the failed attempt to abolish the state income tax (2002).
the data, we identified the top seven anti-tax towns and the top seven
pro-tax towns. The top seven anti-tax towns are Berkley, Billerica,
Carver, Halifax, Plympton, West Bridgewater and Whitman. The majority
of voters in these towns always declined to raise state taxes and was
less willing to raise them locally.
towns are: Amherst, Conway, Leverett, Pelham, Shutesbury, Wendell and
Williamstown. On every major statewide voter referendum, the majorities
in these towns opted for increased taxation.
We then considered
Proposition 2 1/2 overrides in all 14 communities. We found that preferences
to raise or cut taxes at the local level fairly reflected preferences
to raise or cut taxes at the state level. Since 1983, only eight of
64 overrides were successful in our anti-tax towns. Three towns, Berkley,
Billerica and Whitman, rejected every appeal since 1983 to override
Proposition 2 1/2.
The story is
predictably much the opposite for the pro-tax towns. Thirty-seven of
the 63 attempts to override Proposition 2 1/2 in these towns
more than half were successful in increasing local property tax
levies. Only one pro-tax town, Wendell, rejected more attempts to override
Proposition 2 1/2 than it approved. The town of Pelham approved all
six of the overrides taken up since 1983.
Pro-tax or anti-tax,
it appears that different communities permit different voters to accommodate
their preferences, much as the Tiebout model predicts. If you want to
live in a community thats open to more spending, take a tip from
Horace Greeley: Take Route 2 west. We found the towns most open to higher
taxes to be located in the western part of the state. Rural Massachusetts
offers both beauty and a preference for expansive government.
In contrast, people with the most fervent anti-tax sentiments tend, with one exception, to gravitate toward the southeastern portion of the state. If you are looking for towns that accommodate anti-tax preferences, go south or take Route 3A straight to Billerica.
How does your
city or town lie on the tax continuum? You can
discern your localitys tax preferences by visiting www.beaconhill.org,
where weve posted the voting records of all 351 cities and towns
on the major state tax questions of the past 23 years.
Director of Research John Barrett and intern Charles Gibbons assisted in the preparation of this article.
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