Abstract:
In November 1980, voters in Massachusetts overwhelmingly approved a tax limitation referendum called Proposition 2 l/2, which restricted the property tax levy for each Massachusetts city and town to 2 l/2 percent of the fair market value of all the community's taxable real and personal property. Boston was especially hard hit. In keeping with the Proposition 2 l/2 mandate, the city stood to absorb a cut of $175 million in property tax revenues over the next three fiscal years. To complicate the problem, the city recently had been found liable for over $100 million in tax abatements. To avoid insolvency or critical service and staff reductions -- including a total shutdown of the schools -- the city would have to seek special financial assistance legislation from the state. This case is the story of Mayor Kevin White's financial bailout package, and the unsuccessful ten-month struggle to get a bailout bill enacted.
Learning Objective:
The case has been taught with a focus on the following objectives: to enable non-elected public officials to work effectively with legislatures and legislators by understanding their special needs, motivations and perspectives; and to stimulate understanding about the consequences of the distribution of power and authority among the various levels of government.
