An Override is when registered voters in town vote on a ballot question to override the tax increase limit set by Proposition 2 ½.
In November of 1980, the people of Massachusetts passed by ballot vote Proposition 2 1/2 (MGL Chapter 580 of the Acts of 1980), a law that, among other things, placed constraints on city and town property tax levies beginning in 1982.
This constraint means the Town of Franklin is limited in its ability to raise revenue. Property taxes are the most significant source of revenue for Franklin. It is well documented that Franklin budgets and spends conservatively. This has earned Franklin a AAA bond rating for financial management and creditworthiness, and has enabled us to maintain one of the lowest tax rates for residents in the region. The community demands of both emergency services and public education has increased much more than the allowed 2 1/2%. Things like rising healthcare and inflation around expenses have far exceeded this allowed increase.
A debt exclusion vote (like the recent vote to fund our portion of Tri-County Regional) allows a town to raise tax revenue which is used to pay for debt (principal and interest) borrowed for a specific purpose. Think of it like a mortgage. In this way, a town can build a police station or other building, and not fund it from its existing revenues. In other words, a debt exclusion is a means of funding a particular project with a temporary increase in the levy limit. The debt is excluded from (that is, exempt from) the levy limitations of Proposition 2½.
Debt exclusions are a tool that towns use to show commitment for projects and willingness to support them financially. We are fortunate in Franklin to have a AAA bond rating which allows us to borrow at optimal interest rates. Debt exclusions may only be used for the specific purpose intended and do not contribute to operating costs of Franklin.
Franklin Massachusetts
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