Can Local Governments Give Citizens What They Want? Referendum Outcomes in Massachusetts
Economists and political scientists have long debated the nature of the process that determines government taxation and service levels in a democracy. During the 1980s, the role of referenda in determining city and town property taxes, and hence local spending, increased dramatically in Massachusetts. This article uses recent Massachusetts experience to examine the degree to which citizens "get what they want" from the local public sector and what it is they seem to want.
The passage of Proposition 21/2 in November 1980 signalled both a shift in statewide voter sentiment against local officials' previously "unfettered" decision-making and a change in rules, making it more difficult for localities to raise property taxes, their only major local revenue source. The impact has been uneven across communities. Nonetheless, until late in the decade, both sizable additions to local aid and a booming real estate market allowed many communities' expenditures to grow moderately without bumping against their Proposition 2½ limits.