PROPOSITION 2 ½
Sudbury pays for its schools, police, fire, senior center, park & rec, and other public services through:
• State aid (e.g., Chapter 70 aid, Circuit Breaker Special Education funding, transportation funding)
Explanation of state aid (cherry sheets)
Sudbury's FY10 and FY11 cherry sheet estimates
• Local receipts (e.g., building permit fees, fines, dog licenses, liquor & entertainment licenses)
• Property taxes (real estate taxes as well as personal property taxes such as excise taxes)
o Property taxes are by far the largest source of revenue for Sudbury.
o Residential land owners pay a lower tax rate than commercial land owners, but
since Sudbury has a very small commercial tax base, the burden falls largely on
residential land owners.
“Proposition 2 ½” is a state law that was enacted in 1980. The law says that a town can only increase the
total dollar amount the town can tax (its “levy”) by 2 ½ % unless the town passes an override.1This does NOT
mean your individual taxes will go up by 2 ½ %.
For FY11, without an override:
• Sudbury’s levy will increase 2.93% (approximately $1.9 million), including new growth and
commercial property taxes.
• The percentage increase to the average existing homeowner’s tax bill will be 2.24% or
$235/year.
For more details about Proposition 2 ½, visit the Mass Department of Revenue's website.
BUDGET IMPLICATIONS
If there is no override, there will not be enough money to operate the town services and schools as they now
exist, and cuts will have to be made. Why? Because:
Sudbury will lose approximately $1.9 million in state aid and local revenue for FY112
The Board of Selectmen, the Finance Committee, and both School Committees are recommending a 2.75%
budget increase for FY11: an override of $1.75 million to help close the gap created by the loss of state
aid and revenue. If the override passes at Town Meeting and the ballot:
• Taxes on a $650,400 home (average assessed home value) will increase by 2.68% or
$280/year ($5/week). This tax increase, combined with the 2.24% increase allowed by Prop 2
½, will result in a total tax increase of 4.92% or $515/year.
o Taxes on a $300,000 home will increase by an additional $129/year or $2.50/week.
o Taxes on a $400,000 home will increase by an additional $172/year or $3.31/week.
o Taxes on an $800,000 home will increase by an additional $344/year or $6.62/week.
o Taxes on a $1,000,000 home will increase by an additional $430/year or $8.27/week.
_____________________________________
1 Proposition 2 ½ also allows the total levy to increase by a higher % to include new growth (new growth = new houses & businesses)
2 The non-override budget assumes a 7.5% decrease in state aid to Sudbury ($426,002), and a decrease of $1,483,238 in local
revenues.