Prop 21/2 Cut Taxes by $311 Million Since 1981

Proposition 21/2 cut property taxes in Massachusetts about $311 million statewide, or 9.3 percent, between July 1981 and December 1982, the state tax agency reported yesterday.

The Revenue Department report said municipalities cut spending by more than $107 million during the period and increased income from licenses and user fees by $174.7 million.

The agency said the impact of the property tax limiting law on individual city and town budgets "was extremely diverse."

It said 301 communities decreased tax rates during the period; 27 increased, and 22 remained stable.

Not all property owners in communities where tax rates declined saw their individual tax bills go down, however, J. Robert Sherman, spokesman for the Revenue Department, said the "vast majority" of cities and towns have revalued their property since Proposition 21/2 took effect.

This has meant tax increases for some owners whose property values went up, even in the face of declining tax rates.

The state, meanwhile, has provided communities with substantial aid increases to help compensate for revenue losses caused by the tax limiting law.

Proposition 21/2 was approved by state voters in the 1980 election. All of its tax limiting provisions were in force by the following July.

The law limits property tax rates to 21 percent of the full market value of a community's property, and it also cut the automobile excise tax, another major source of local revenue, from $66 per $1,000 valuation to $25 per $1,000.

The revenue department said the cut in the auto excise has cost communities about $145 million.

The data were compiled by Deputy Tax Commissioner Edward J. Collins Jr., who prepared a report for the annual meeting of the association of town finance committees Dec. 4. The report was distributed to the media yesterday.

"The impact of Proposition 21/2 on Particular City and town budgets, and therefore to the specific property taxpayers, was extremely diverse..." Collins said.

"The impact upon various municipal services also various from very negligible to severe cuts, depending upon a community's per capita wealth and previous level of taxation.

Services

"Municipal services affected in many places were the public schools, recreation programs, libraries and public works. Fire and police personnel generally suffered lightly from direct dismissal..."

Collins also noted that "there was widespread postponement of capital outlays." But the Massachusetts Municipal Association said in a recent report that that response to Proposition 21/2 has been reversed, and communities have begun floating more bond issues for public construction and other capital improvements.