State Fiscal Constraints and Local Responses: Evidence from the Property Tax Limit Overrides in Massachusetts

This research examines the determinants of the likelihood of property tax limit override attempts and successes in the context of Massachusetts's Proposition 2½. The authors apply the “Leviathan” government theory, median voter theory, and agenda-setting theory to develop theoretical expectations and use data from Massachusetts municipalities for 1991–2013 as a sample for empirical tests. Override attempts are not randomly proposed; therefore, the two-stage Heckman selection model is used to address selection bias in the investigation of the likelihood of override successes. Results show that a higher property tax rate reduces the likelihood of government officials’ override attempts, but previous override experiences have a positive influence. Voters bearing a higher property tax rate are less likely to approve the override, but override experiences in the previous year and the “menu” approach increase the likelihood of approval. Relatively more evidence supports the Leviathan government and agenda-setting theories in explaining overrides of Massachusetts's property tax limit.