Frequently Asked Questions
- What is Proposition 2 ½?
Proposition 2 ½ is a Massachusetts law enacted in 1980 that strictly limits the amount of property tax revenue a municipality can raise through real and personal property taxes. This revenue is called the “tax levy.”
Prop 2 ½ limits how much the tax levy can be increased from year-to-year. The maximum amount a community can levy in any given year is called the “levy limit.”
Prop 2 ½ also caps the tax levy at 2.5% of the total full and fair cash value of all taxable real and personal property in Hingham. Because our tax levy is nowhere near this “levy ceiling,” the Town does not need to worry about this restriction.
Under Proposition 2 ½, a community’s levy limit increases automatically by two factors:
- An incremental increase of 2.5% of the prior year’s levy limit, and
- A dollar amount derived from the value of new construction and other growth in the local tax base since the previous year, called “new growth.”
The 2.5% increase and the new growth number are both added to the prior year’s levy limit to reach the current year’s levy limit.
A community can exceed its levy limit with voter approval. Prop 2 ½ gives communities flexibility to permanently increase the levy limit through overrides to support municipal and school operations.
- What is an override?
An override is a voter-approved, permanent property tax increase. It is designed to provide a community with the ability to generate sufficient revenues to fund recurring costs that are likely to continue into the future, such as annual operating expenses for educational and municipal services.
A “general override,” a “Proposition 2½ override,” or an “operating override” are all different names for the same thing.
- How does an override work?
By passing an override, the Town can assess taxes in excess of the automatic annual 2.5% increase and any increase due to new growth. An override results in a permanent increase in the levy limit and allows the Town to fund services and programs we believe the community expects and desires.
- What’s the difference between an override and a debt exclusion?
While an override results in a permanent tax increase that is used to fund recurring operational expenses, debt exclusions result in a temporary tax increase to pay the debt service from bonding for a specific capital project, such as building a new school.
For debt exclusions, the debt service costs are added to the levy limit for the life of the debt only (typically between 10-30 years). Thus, unlike overrides, debt exclusions do not become part of the base used to calculate future years’ levy limits.
Hingham voters approved three debt exclusions in 2022. The debt exclusions will fund a new elementary school to replace the Foster School ($113 million), a new Public Safety Facility on Route 3A ($47 million), and a new Town Pool located at the South Shore County Club ($8 million).
- Why is an override needed? How did we get here?
Prior to the March 2020 onset of the COVID-19 pandemic, the Town was experiencing an increased demand for municipal and school services that was difficult to address with available revenue. Similar to many Massachusetts communities, the cost of providing services has outpaced revenue growth allowed under Proposition 2 ½. The global pandemic and inflationary environment further exacerbated these budget pressures.
With approval of Hingham’s 2021 Annual Town Meeting, resources were added across the Town to help students recover from COVID-19 and provide critical capacity to school and municipal operations. These resources included 32 positions in the School Department, four positions in municipal departments, and funds to support a new field maintenance program and address shortfalls in the legal and snow and ice budgets. To balance this large increase in FY22, the Town used approximately $5 million in one-time federal funds and local reserves.
Understanding that we were creating a structural deficit, the Town formed a task force to begin developing a long-term financial management plan. Through this Sustainable Budget Task Force, municipal and school leaders worked together to explore revenue opportunities and identify ways to fund the Town’s budget going forward.
At Hingham’s 2022 Annual Town Meeting, in accordance with recommendations from the Task Force and in acknowledgement of the continued pandemic, the Town chose to maintain the added positions and services, once again employ $3.8 million in available federal and local one-time monies to balance the FY23 budget, and begin planning for an override in FY24.
As a result, the Town is entering the FY24 budget season with a significant deficit ($6.0 million as of early March 2023). To bridge the funding gap and avoid further deepening the deficit, the Town must either reduce services to balance the FY24 budget or raise additional revenue through an override to maintain current educational and municipal operations.
The Select Board, School Committee, and Advisory Committee all unanimously recommended an FY24 budget that includes a proposed $7,890,467 override to fund the operating budgets of the Town and Hingham Public Schools. To pass, the override requires approval at Annual Town Meeting on April 24, 2023 and on the ballot at the Annual Town Election on April 29, 2023.
- What is the size of the proposed override?
The Select Board, School Committee, and Advisory Committee all unanimously recommended an FY24 budget that includes a proposed $7,890,467 override to fund the operating budgets of the Town and Hingham Public Schools. If approved this spring, the override would go into effect on July 1, 2023.
- Were other, lower override amounts considered?
Yes, several different levels and structures of overrides were considered. The Town needs just over $6 million to continue providing the same level of services we currently provide, so that makes up the bulk of the $7.89 million proposed override. At this time, the Select Board, School Committee, Advisory Committee are not recommending service cuts, which is what an override number smaller than $6 million would entail.
In addition to the $6 million to keep what we have in place, the Select Board, School Committee, and Advisory Committee recommended funding $1.9 million of the total additional $3.2 million requested by departments (to enhance services/capacity). The $1.9 million represents the most critical of those requests. The Town Administrator outlined the municipal requests on February 16 (slides 16-32 here, or the video is here starting at 1:55:40). The School Department also outlined its needs in many budget documents, including the presentation from February 27.
The Town is trying to balance its responsibility to provide quality services with the impact on taxpayers. With regards to taxpayer impact, we have made a concerted effort to increase awareness of the Town's property tax exemptions and relief programs. In addition, the Select Board advanced three warrant articles this spring (Articles 16, 17, and 18) that will further expand tax relief for Hingham homeowners.
- Who sets the actual dollar amount of the proposed override?
The Select Board is the only body that can place an override question on an election ballot, so the Board determines the override amount in that way. However, there are additional steps in the process, including the Advisory Committee making budget recommendations to Town Meeting (via Article 6 in the Warrant) and Town Meeting adopting a balanced budget.
On March 15, 2023, the Select Board voted to place the following question on the official ballot for the April 29, 2023 Town election:
- Question 1: Shall the Town of Hingham be allowed to assess an additional $7,890,467 in real estate and personal property taxes for the purposes of funding the operating budgets of the Town and the Public Schools for the fiscal year beginning July 1, 2023?
The Advisory Committee's FY24 budget recommendations to Town Meeting (via Article 6 in the Warrant) also reflect the proposed $7,890,467 override.
- How much will the proposed override increase my taxes?
We have developed a Tax Impact Calculator that residents can use to enter their street address and view the estimated FY24 property tax increase resulting from the proposed override.
Without the override, the median Hingham taxpayer, whose property is currently assessed at $898,850, would have an estimated FY24 tax bill of $9,634. With the override, the median taxpayer's FY24 estimated tax bill would increase by approximately $751 to $10,385.
For more detailed information related to estimated property tax impacts of the proposed override, please click here.
- When would the override go into effect?
If approved, the override would go into effect for FY24, which begins on July 1, 2023.
- What happens if the proposed override doesn’t pass?
If the override does not pass this spring, the Town will need to contract services and reduce personnel to lower its FY24 expenditures by $6,015,216 beginning July 1, 2023. Approximately $3.9 million, including 46.1 FTEs, will come from the School Department and approximately $2.1 million, including 19.4 FTEs, will come from the municipal departments. The reductions would affect a number of service areas as outlined below.
Hingham Public Schools
- Reduce approximately 46.1 FTEs across all schools, including teachers, administrators, paraprofessionals, and administrative assistants
- Reduce curriculum materials, textbooks, and materials for students
- Eliminate sub-varsity sports at the High School and after-school clubs at the Middle School
- Increase fees for athletics and full-day kindergarten
- Institute new fees for transportation grades 6-12, High School activities, and elementary instrumental music
General Government Services
- Reduce support for Conservation Commission, Planning Board, Zoning Board of Appeals, Affordable Housing Trust, and related applicants/projects
- Significantly slow economic development efforts – limit capacity to increase tax base
- Slow sustainability initiatives
- Reduce support for Select Board, Town Administrator, and boards/committees – decrease capacity and efficiency across Town
- Reduce support for department heads and their missions
- Close GAR Hall to the public; close 308 Cushing Street
- Decrease maintenance of municipal facilities
- Reduce GIS capacity to manage spatial data for strategic decision making
- Reduce Town’s ability to effectively communicate with the public
- Reduce Police support to schools – safety and security, presence at drop-off and pick-up, traffic safety, community and youth relations, DARE program, classroom curriculum
- Diminish ability to support community members with mental health crises
- Reduce Animal Control response capabilities
- Reduce support for Police administration – slow Police Department accreditation process
- Decrease Fire minimum staffing from 11 to 9 for certain shifts: remove one engine or ambulance from service per affected shift; increase response times, beyond normal standards; exacerbate remaining staff stress
- Eliminate Fire CPR training for school and municipal employees
- Reduce trash and recycling pickup, mowing of fields, maintenance of public grounds and parks, support for special/community events, and tree planting
- Delay filling of potholes
- Limit line painting
- Transfer Station: Close Yard Waste Area 1-2 days per week and trash compactors/trailers
- Decrease ability to provide public health services
- Eliminate Town social worker position – decrease support for community wellness and mental health needs
- Significantly reduce Senior Center transportation program – affects senior community’s ability to attend appointments, events, and programs
Culture & Recreation
- Eliminate Town-wide field maintenance program
- Close Hingham Public Library on Sundays
- Reduce children’s and other programs offered at Library - potentially jeopardizes Library certification (OCLN network and grant funding)
- Diminish Town ceremonies marking holidays and historical events
- When are we voting? Do I have to vote in person?
The override requires two separate votes this spring.
The first vote is at Annual Town Meeting on Monday, April 24, 2023 at 7pm at Hingham High School. This is an in-person event only. The override vote will be part of Warrant Article 6 and it requires a majority vote to pass. If you’re new to Town Meeting, the State has a helpful Citizen’s Guide to Town Meetings.
The second vote is at the Town Election on Saturday, April 29, 2023. The override question will be Question 1 (there is only one ballot question this spring) and it requires a majority vote to pass. For the Town Election, you can vote in person on Election Day or you can vote by mail ahead of time.
- In-person voting will take place on Saturday, April 29 from 8am-8pm. Precinct and voting location information is available here.
- Vote by Mail applications are available here. The deadline to submit Vote by Mail applications is Monday, April 24, but the Town Clerk’s office recommends submitting in advance.
You must be a registered voter in Hingham to participate in Town Meeting and the Town Election this spring. The last day to register to vote for these events is Friday, April 14, 2023.
- What is the Town's budget?
The Town’s current fiscal year (FY23) operating budget is approximately $141 million. (The $141 million includes approximately $19.1 million for water, sewer, and South Shore Country Club operations, which are funded from user rates and have no impact on property taxes.)
The largest five departmental budgets supported by property tax revenue include Schools ($61.8 million), Employee Benefits ($15.6 million), Police ($7.2 million), Fire ($7.2 million), and Debt Service ($5.8 million).
- Why does the FY24 deficit number keep changing?
The town uses a Five-Year Financial Forecast to project revenues and expenditures for future fiscal years. This document evolves during the budget process as new revenue and expenditure data/information becomes available. It is an iterative process, so the FY24 deficit will change as we incorporate updated revenue projections and expense estimates at different points in the budget cycle.
We typically put together the initial version of the Forecast each December once municipal and school budget requests are submitted for the upcoming fiscal year. The Forecast is then updated 2-3 more times – typically in late January/early February when Q2 revenue information becomes available and again in early March when health insurance rates are published for the upcoming fiscal year and preliminary State aid information becomes available. The Forecast is finalized in mid-March once the Advisory Committee votes final budget recommendations.
As of early March 2023, the current FY24 deficit is $6.0 million.
- How was it decided that the schools will cover 65% of the deficit and the municipal departments will cover 35% of the deficit?
The Town Administrator and School Superintendent have talked about the 65/35 allocation in recent discussions and that’s what the proposed school and municipal “balanced budget” scenarios are based on. The 65/35 split comes from the relative size of the school and municipal budgets (see pages 67-70 of the Sustainable Budget Task Force report, which includes the FY22 chart below). Ultimately, the budget recommendations from the Advisory Committee will be printed in the Warrant (in Article 6) and made to Town Meeting.
- When and how often has Hingham passed overrides?
Since Prop 2 ½ was passed in 1980, the Town of Hingham has considered eight overrides as shown in the table below. The last override that passed was in 2009. It supported funding for the opening of a fourth elementary school (East School) in FY10.
- How does Hingham compare with other communities on overrides?
According to the MA Department of Revenue’s Municipal Databank, our 19 benchmark communities have both proposed overrides more often than Hingham and passed overrides more often than Hingham.
Since 1990, our 19 benchmark communities have proposed a total of 211 overrides, which comes to an average of 11.1 proposed overrides per community compared to Hingham’s 8 proposed overrides during that period.
Hingham’s benchmark communities have also levied taxes through overrides more often. Since 1990, our 19 benchmark communities have passed a total of 120 overrides, which comes to an average of 6.3 “wins” per community compared to Hingham’s 4 “wins” during the same period.
Please see the table below for a breakdown by community.
- How does Hingham compare with other communities on property tax rates?
According to the MA Department of Revenue’s Municipal Databank, Hingham’s FY23 residential property tax rate is lower than most of our benchmark communities. As the chart below shows, Hingham’s FY23 residential tax rate of $10.00 is tied for second lowest among the 20 communities.
- How does Hingham compare with other communities on property tax bills?
According to the MA Department of Revenue’s Municipal Databank, Hingham’s average single family property tax bill is $11,177 for FY23. As the chart below shows, Hingham ranks just below the midpoint among our benchmark communities in terms of average single family property tax bills.
If we roll these numbers forward to FY24, taking the estimated increase from the $7.89M override and the first year of debt service for the Foster School and Public Safety Facility projects into account, Hingham would remain near the midpoint among our benchmark communities in terms of FY24 average single family property tax bills.