Martha Coakley [maybe] doesn’t know how Massachusetts property taxes work

UPDATE:  I’ve heard from Barbara Anderson that this take may not be right. in Real Estate school they teach you that the actual value of the house doesn’t matter for taxes. That cities and towns just mess with the tax rate to keep the levy from rising more than the prop 2 1/2 amount it can rise.  But Prop 2 1/2 also says that you can’t levy more than 2.5% of the total property value, that would be a maximum tax rate of $25/$1000 valuation.  In Springfield, Chicopee, and Holyoke where many homes go for way under $100,000 that means tax bills of under $2,500.  Which may not be able to run the city.

First Martha Coakley didn’t know what the gas tax was.  Now, from “trickleup” at Blue Mass Group we find out that Martha Coakley doesn’t even know how the property tax system in Massachusetts works.  

I tuned into the debate late so I did not hear the question, which I gather was about the economy.

Coakley set up her reply by referring to Wall Street “gambling” with our money, with the result that many lost their homes and homes lost value. Deft enough way to claim some Elizabeth Warren cred, and kudos to the team that prepped her. But then she said,

Cities and town are suffering from a lower return on their property taxes because of that.

This is fundamentally wrong and suggests that the likely next Governor of the Commonwealth is ignorant of perhaps the most basic fiscal fact of state government.*

Local property-tax revenues do not rise and fall with property values. If property values appreciate, the tax rate declines. If the values drop, the tax rate grows.

Cities and towns are where the Commonwealth delivers most of its services, including schools, sanitation, and protection from crime and fire. Each municipality in Massachusetts is responsible for executing important state programs and mandates.

It boggles my mind that any serious candidate for governor, let alone the frontrunner, could be so completely wrong about how those services are paid for.

We are not talking about fiscal minutia but about the heart muscle of Massachusetts. And she is exactly wrong.

I do not want Charlie Baker to make mincemeat of Martha Coakley, but I cannot escape the feeling that if he does it will be justified.

reposted under the Creative Commons 3.0 License

About Rob "EaBo Clipper" Eno

  • MY property taxes in $$ has now gone up 41% since I bought my house in 2009.

    THIS STATE IS KILLING ME!!!

  • Most folks with a passing knowledge of Proposition 2.5 understand the most commonly discussed aspects of the law. The levy limit goes up 2.5% plus growth, so if property values rise, the levy limit stays the same but the tax rate drops. Municipalities that want more revenue than +2.5% meed an override to raise the levy limit, or need new growth (the value of the taxes on the new growth is added to the levy limit).

    However, there is also a levy ceiling of 2.5% of the total assessed value of a municipality. Override or no override, the property tax may not exceed the levy ceiling.

    Holyoke and Springfield have reached their levy ceiling. Property taxes in these cities cannot go up at all unless the tax base increases, and if property values decline the authority to tax declines.

    So, the situation Martha Coakley described is absolutely correct in Springfield and Holyoke, as well as any other municipality at or near the levy ceiling. As the debate was taking place in Springfield, she was literally standing on the facts.

  • Vote3rdpartynow
  • Joshua Norman

    Baker endorsed Swampscott’s overrides, donated to the pro-override group and endorsed the Community Plundering Act Tax Surcharge.