A small town in western Mass. may be the 'canary in the coal mine' for cash-strapped municipalities across the U.S.

Anti-override activists insisted South Hadley town officials need
to address inefficiencies instead of raising taxes. 

After weeks of intense debate and campaigning, residents of South Hadley, Massachusetts, shot down a proposed 50% property tax increase, reports Scott Calvert of The Wall Street Journal. “South Hadley is a warning sign for financially strained municipalities across the U.S."

By 65% to 34% vote, residents from this small community rejected a "measure to allow the western Massachusetts college town to raise $11 million in new property taxes through what is called an override," Calvert explains. "A $9 million proposal also failed."

Override proponents said the town needed the cash infusion to address its current $3 million deficit, fund school operations and address rising costs. Calvert writes, "Override foes said a hefty property tax jump would overburden residents, particularly seniors."

Rudy Ternbach, who led the anti-override group Alliance for Fair Taxes, told the Journal, “Voters do not want to try and fix the government by increasing taxes on those least able to pay. They want more efficiencies in government and less taxes.”

South Hadley’s financial squeeze, partially due to a 42% increase in healthcare costs and declining state aid, may be part of a national trend, Calvert reports. Many municipalities are draining the last of their pandemic aid even as costs continue to rise.

Ternbach wants the town to "extract more money from Mount Holyoke College. . . which is largely tax-exempt," Calvert writes. "Both sides in the override debate want the college to do more."

Without additional taxes, local officials say, "there will be deep cuts: no school sports or extracurriculars and slashed Advanced Placement offerings, along with hits to police and public-works staffing," Calvert adds.

Chris Morrill, an expert in public finance, told Calvert, "It’s really a preview of what communities across the country are going to face. I think South Hadley’s perhaps the canary in the coal mine.”