`Loosening Up'

"I think it is time for there to be some loosening up of some of the restrictions [of Prop 2 1/2]," says Helen F. Ladd, a senior fellow at the Cambridge-based Urban Land Institute who studied the effects of Prop 2 1/2 in the law's early days.

Ladd says that the 2 1/2 percent increase cap on the property tax is not flexible enough to allow for high inflation rates. If inflation causes the cost of local government services to increase by 5 percent, the 2 1/2 increase in revenue becomes insuffi-

Boston, like many cities and towns in the state, has raised property taxes to the 2 1/2 percent limit each year since the law was instituted, says Samuel R. Tyler, executive director of the Boston Municipal Research Bureau.

But Boston has never put an override question on the ballot, and only two cities--Cambridge and Northhampton--have successfully overridden the tax cap.

Efforts to Override

Last year, more than 180 of the state's 351 cities and towns had some type of override question on the ballot, according to The Boston Globe.

"If we don't resolve the fiscal crisis at the state level, Prop 2 1/2 will be adjusted," says state Rep. Byron Rushing (D-Boston).

While no plans to alter Prop 2 1/2 are on the table for immediate discussion, a number of suggestions are circulating through the State House.

One idea--suggested by the Governor's Task Force on Local Finance--calls on the state to establish a revenue sharing policy between the state and local governments. Under the plan, 26 percent of state taxes would be earmarked for cities and towns.

"I think a revenue sharing policy will be instituted some time," says Tyler.

The task force also recommended changing the law to allow property tax increases based on a "sliding index," which would take into account such factors as a city's property values and population.

But the same leaders and experts who point to the disadvantages of Prop 2 1/2 and call for changes say that anti-tax sentiments in the state will make any type of modification politically difficult.

Cherished by Massachusetts property owners and guarded by anti-tax lobbies and legislators on Beacon Hill, Prop 2 1/2 is in no danger of dying soon.

"I don't think its days are numbered. I don't think people are currently inclined to do away with a tax limiting law even though services may be cut," Parsons says.

Prop 2 1/2 was approved during a nationwide tide of anti-tax sentiment, at a time when high property taxes were soaring even higher. In that political climate, many local governments were pegged as wasteful bureaucracies which overspent the revenue they collected.

Those anti-tax feelings are still very much alive in the state. When House speaker George Keverian '53 (D-Everett) tried to push a tax package through the legislature to trim the deficit, constituents responded by flooding their state representives' offices with phone calls and letters to protest new taxes.

`Almost Biblical'

Meanwhile small municipalities like Rockport and Manchester will struggle with Prop 2 1/2 overrides to come up with money the state cannot afford to give away anymore. And the tax limiting law will not be modified without lengthy and heated debate, says state Rep. Thomas M. Finneran (D-Boston).

"It's still looked upon as almost biblical," Finneran says.