Next week, the City of Malden will be the first Gateway City in 17 years to ask voters for a Proposition 2 ½ override tax hike or else face cuts to city services.
If it passes, it will be the first such city to do so in 35 years.
The ballot in the March 31 special election asks Malden voters to choose between three options: whether the city should collect an additional $5.4 million in property taxes over its levy limit; whether it should collect $8.2 million; or whether to reject the override altogether.
The city says that for the owner of the median single-family home in the city, worth $660,000, it would add an annual cost of $356.
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The city says the money is needed to help balance the budget, saying it’s at a “breaking point.” Proponents say voting for an increase is essential to sustaining existing city services long term, while opponents are concerned about the city’s spending and the election timeline.
“This is where we are … we have to ask voters which path they want to choose: keep our current level of service or see some pretty significant layoffs next year,” said Carey McDonald, the chair of the city’s finance committee and supporter of the override.
An $8.2 million increase in taxes would fully fund the city’s budget, while the $5.4 million would only “avoid the worst case scenarios,” McDonald said.
If the override fails, the city would need to cut about 15% of its workforce, which would include police, firefighters and library services.
Proposition 2 ½, enacted in 1980, caps the annual increase to a municipality’s total property tax revenue — it’s levy limit — at 2.5%. As cities and towns face financial instability brought on by inflation and limited revenue-raising options, local governments have increasingly sought to override the limit on tax increases.
Malden will be the first Gateway City — or one of 26 municipalities in the state where the median household income is below the state average — to attempt override since Brockton in 2008, according to a Massachusetts Department of Revenue database. If it passes, it will be the first such city to do so since Holyoke in 1991.
When compared to similar cities, Malden makes less in taxes per capita and spends less on government services, McDonald said.
“This demonstrates how pervasive the problem is — it’s not just wealthy communities who want to spend more,” McDonald said. “We’re just trying to meet our basic needs … and I do think other gateway cities are going to be increasingly in that position.”
Malden Mayor Gary Christenson said the tax override “should have been on the ballot four or five years ago,” but the city was able to hold off by using “Band-aid” solutions. The city has been using grant money for projects for the past several years, he said, and used $8.4 million from reserves to balance this year’s operating budget.
“Our revenues will no longer support our expenses,” he said. “If we do not take this step, city services will be greatly impacted.”
McDonald said inflation and mandatory school spending are the two major factors driving the need for the tax increase. In 2019, the state updated the minimum level of education spending for each district; municipalities are required to contribute an amount calculated on local income and property wealth, and the state covers the rest.
This year, Malden is required to spend $20 million more in school funding than it did in 2019, McDonald said.
“That calculation doesn’t work for our community — it doesn’t measure our ability to pay,” McDonald said. Christenson said the city is working with the state legislature to make changes to school funding requirements.
Ashley Freeman, a resident who teaches at and has a son enrolled in Malden High School, said that the education budget has been “bare bones,” and the school system already faces staffing shortages.
“If we have cuts … I’m concerned that it’s definitely going to be a crisis for us here in the schools, but it’s not going to just affect the schools,” Freeman said. “We need this funding to keep Malden safe and functioning, to ensure a good future for everyone here, but particularly the kids.”
As a single parent, Freeman said her finances are important, but says the city’s property tax exemption rate would help offset some of the increase. Using an online calculator, she calculated that her property taxes would increase $60 annually should the $8.2 million increase pass.
“Those of us who have tighter budgets, who have smaller properties, who don’t necessarily have that leeway to pay extra taxes — it’s not going to affect us that much,” she said.
Others in the city — including William Spadafora, a lifelong resident — don’t think the city has done enough to cut spending before introducing the tax increase.
“We feel that the city has been spending money without a lot of oversight,” Spadafora, who is the founder of Keep Malden Affordable, a campaign against the override, said.
Spadafora said the tax increase could price longtime residents out of homes, and tax increases would likely be passed down to the 60% of Malden residents who are renters.
He added that the process seemed “rushed” and criticized the city for spending extra money on a special election rather than waiting for the next scheduled municipal election.
Christenson said the city has held five public forums about the override and “has been letting people know of our situation over the past several years.”
“With some meaningful cuts and showing the residents that they’re willing to do their part in some of the tough financial decision-making, it would have sat better with a lot of people before they just decided to immediately go to the taxpayers,” he said.
