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Town of Hingham FY24 Override
Introduction
The Town is entering the FY24 budget season with a significant deficit that results from adding critical capacity to school and municipal services during COVID-19. In addition, Hingham is experiencing the same challenges as many Massachusetts communities where the cost of providing services has outpaced revenue growth allowed under Proposition 2 ½.
The Town used one-time federal and local reserve funds in FY22 and FY23 to offset these deficits. As we move away from the pandemic and seek to bridge the funding gap permanently, the Town must either reduce services to balance the FY24 budget or raise recurring revenue through an override to maintain current operations.
Given this context, the Town will propose an override for the FY24 budget. To pass, the override will require approval at both Annual Town Meeting on April 24, 2023 and on the ballot at the Annual Town Election on April 29, 2023.
We’ve compiled information, resources, and FAQs on this page to help community members learn more about the FY24 budget process and override proposal. We will continue to post additional information and updates below over the next few months.
Override Calculator
We are in the process of developing the Town’s FY24 budget and override proposal. Once that is complete, we will post a calculator here that residents can use to enter their street address and view the estimated property tax increase that would result from the override.
Property Tax Relief
The Town continues to expand property tax relief programs and enhance outreach efforts to encourage citizens to take advantage of these resources.
We offer a number of different property tax relief programs for residents based on age, income, and veteran or disability status. Town staff can help direct you to the right programs and exemptions. The Assessor's Office webpage provides a list of property tax relief programs and contact information to learn more.
In addition, did you know that you may be able to “work off” a portion of your property taxes by completing tasks/projects for Town Departments? The Town offers both a Senior Tax Workoff Program through the Senior Center and a Veterans’ Tax Workoff Program through our Veterans’ Services Department.
Not sure where to start? The Assessor’s Office would be happy to help:
- Visit: Town Hall, 1st floor, 210 Central Street, Hingham, MA
- Call: 781-741-1455
- Email: Assessors@hingham-ma.gov
January 2023
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Informational Materials
General Override Materials
- MA DOR Guide: Levy Limits: A Primer on Proposition 2 ½
- MA DOR Guide: Proposition 2 ½ Ballot Questions: Requirements and Procedures
- MA DOR Resources: Proposition 2 ½ Overrides & Exclusions
- MGL Chapter 59, Section 21C
- "Inside Town Finances"
General Budget Materials
- Final Town of Hingham FY23 Financial Forecast (April 2022)
- Sustainable Budget Task Force webpage and final report
- Hingham Public Schools Budget Documents
- Advisory Committee Report in the 2022 Annual Town Meeting Warrant (pages 5-17)
- Advisory Committee Report in the 2021 Annual Town Meeting Warrant (pages 4-16)
Meeting Presentations
- November 29, 2022 “Budget Procedures for a Proposition 2½ Override” Joint Session (Video: Joint Session portion starts at 16:24)
- November 29, 2022 “Budget Procedures for a Proposition 2½ Override” Joint Session (Slides)
Frequently Asked Questions
We are currently developing the Town’s FY24 budget and override proposal. We will continue to add to and update the FAQs below as more information becomes available.
Note - Click the arrow next to each question to view the answer. If you click the link, you'll be taken to the top of this page. This is a known bug in the software that is being addressed.
This short video explains how an Override works
- What is Proposition 2 ½?
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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?
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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?
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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?
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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?
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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 ($7.5 million as of late January 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. An override requires approval at Annual Town Meeting on April 24, 2023 and on the ballot at the Annual Town Election on April 29, 2023.
- When are we voting?
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To pass, the override requires a majority vote at Annual Town Meeting on Monday, April 23, 2023 and a majority vote on the ballot at the Saturday, April 29, 2023 Town Election.
- When will the override go into effect?
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If approved, the override would go into effect for FY24, which begins on July 1, 2023.
- How much will the override increase my taxes?
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We are in the process of developing the FY24 budget and override proposal. When we have the final numbers, we’ll post an override calculator that residents can use to enter their street address and view the estimated property tax increase for FY24.
- What is the Town's budget?
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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).
- When and how often has Hingham passed overrides?
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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?
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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 bills?
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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.
Still Have Questions?
Please email us at override@hingham-ma.gov.