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What is Proposition 2 1⁄2?
What is Proposition 2 1⁄2?
Proposition 2 ½ is a 1980 Massachusetts state law that limits the amount of that a town can raise property taxes, or levy, each year to no more than 2.5% of the maximum allowable limit for the previous year, plus any anticipated new growth.
For example, if the previous year's tax levy was $1,000,000, and the town was expecting $5,000 in new growth, the new limit would be $1,030,000. That's $1,000,000, plus the $5,000 in new growth, plus the 2.5% - which is $25,000.
Note that there is no consideration for inflation, and when inflation exceeds 2.5%, this means the real-dollar value of the budget effectively decreases. Unfortunately, this has been the case for years and the Town budget has been squeezed as far as it can go.
Do increased property values raise tax revenue and offset inflation?
Do increased property values raise tax revenue and offset inflation?
No. Proposition 2 1⁄2 caps the total levy increase to 2.5%. If the assessed value of a property increases, the effective tax rate on that property may actually decrease, even if the total tax bill for the property increases.
As a simplified example, if the tax rate is 10% and a property is valued at $100,000, the tax bill would be $10,000, or $10 per thousand. In the following year a 2.5% increase would allow the taxes, or levy, to increase to $10,250. If the assessed value of the property increased to $125,000 then the effective tax rate would decrease to 8.2%, or $8.20 per thousand.
What is the issue currently facing the Town of Bolton?
What is the issue currently facing the Town of Bolton?
Last year's levy was $25,537,420. New growth is estimated to be $150,000. And the 2.5% allowable levy increase is $638,438. This yields a new levy total of $26,325,858 - an increase of $788,438.
Unfortunately, due to large costs increases, particularly in education, health insurance, and pension costs, the Town is facing a budget shortfall of approximately $1,927,105.
The primary driver of this shortfall is inflation. For several years the inflation rate has greatly exceeded the 2.5% limit, resulting in a growing budget deficit. For the past few years the Town has been able to use other tools, such as one-time COVID relief funds, to avoid an override. However, there are no more levers to pull and we're now left with an override as the only option.
Are we going to have regular overrides?
Are we going to have regular overrides?
While the future is impossible to predict, and it depends on many variables - the future rate of inflation, future population growth in Bolton, future commercial development in Bolton, etc. - it has been 21 years since Bolton's last override.
The last time the Town of Bolton needed to pass an override was 2004, and 2003 before that:
In 2003 it was for $250,000 and passed with 64.1% of the vote
In 2004 it was for $385,000 and passed with 69.5% of the vote
In today's dollars, those would be $431,618 and $647,450, or a $1,079,068 across two fiscal years.
Years of low inflation, and tightening belts, allowed the Town to continue functioning without an override since then. However, the recent spate of years with high inflation, and budgets which had already been pared to the bone, make an override necessary again.
Has the Town of Bolton provided information?
Has the Town of Bolton provided information?
Yes, the Town has made information available:
There are also several YouTube videos on Bolton Access TV. There is a FY26 Budget Override playlist featuring videos which, in whole or in part, cover the override. For key videos we'd like to call out, see the YouTube Videos page.
Where can I find more information about the Annual Town Meeting?
Where can I find more information about the Annual Town Meeting?
The Town of Bolton has published a 2025 Town Meeting Documents page. This provides:
Where can I find the assessed value of my property?
Where can I find the assessed value of my property?
You can find your assessed value on your most recent Real Estate Tax Bill, listed as 'TOTAL VALUE'. If you receive and pay your bill online, you can find past bills in City Hall Systems.
Additionally, the Town of Bolton website has Valuation Information available for all properties. Specifically, the most recent FY 2025 Valuations by Address (PDF) can be downloaded.
How much will our taxes increase?
How much will our taxes increase?
Using an override value of $1,927,105 million, the Massachusetts Department of Revenue Division Of Local Services, Data Analytics and Resources Bureau online calculator specifically for Estimated Impact on Property Taxes with a Prop 2 ½ Referendum Question Approval returns the below values. To use the calculator, select 'Bolton' as the Municipality, enter '1927105' as the 'Amount to Adjust by', and 'Submit'.
The increase is $116 per $100,000 of Assessed Value. To determine your personal increase divide your Assessed Value by 100,000, and then multiply by 116.
For example, for a home with a valuation of 644,400 we first divide by 100,000, yielding 6.444. Then we multiply by 116, and rounding the result gives us an annual increase of $747.50.
From the table generated by the calculator we can see that is right in line with expectations, where a home with a $650,000 Assessed Value would see an increase of $754.00.
This is a percentage increase of just under 7%, so you could also multiply your current tax levy by 1.07 to estimate your new tax levy.
What are the Town of Bolton FY26 revenue projections?
What are the Town of Bolton FY26 revenue projections?
The following is taken from the 2025 Annual Town Meeting Warrant (PDF).
What are the Town of Bolton FY26 expenditures projections?
What are the Town of Bolton FY26 expenditures projections?
The following is taken from the 2025 Annual Town Meeting Warrant (PDF).
Is Bolton the only Town facing the need for an override?
Is Bolton the only Town facing the need for an override?
No. In fact this is an increasingly common issue as Town's across Massachusetts all facing the same combination of Proposition 2 1/2 limitations, high inflation, and increased costs. The April 2025 issue of the Massachusetts Municipal Association (MMA) publication 'The Beacon' has a front page article about this topic: MMA outlines municipal budget pressures at local aid hearing (PDF).
Are there other impacts on Town programs and services?
Are there other impacts on Town programs and services?
Yes. For example, on March 31st Executive Order 14238 placed the entire staff of the Institute of Museum and Library Sciences (IMLS) on administrative leave. The IMLS is the single largest source of critical federal funding for libraries. Through IMLS Grants, the Massachusetts Board of Library Commissioners (MBLC) received $3.6 million to support statewide library services and grants to local libraries.
Loss of these grants has caused immediate cuts in founding to libraries throughout the state, with further cuts expected. You can read more in the MBLC's news release, Federal Uncertainty Causes Cuts.
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