‘Money grab’: GOP slams Boston Mayor Wu’s suggestion of 2nd look at law limiting local tax hikes

Boston Mayor Michelle Wu’s musings on Monday about cracking the hood on a decades-old law limiting local property tax increases earned her some swift pushback from Republicans, who have accused her of trying to eliminate an important protection for homeowners.

Speaking to reporters after an appearance before the Greater Boston Chamber of Commerce, Wu suggested it might be time for the state to take another look at Proposition 2 1/2, which bars local governments from tax hikes in excess of 2.5%, without voter approval.

“Prop. 2-1/2 was put in place through significant pressure and advocacy from the business community against municipal government’s advocacy several decades ago,“ Wu said. ”And we, I think, are continuing to feel the strain in these economic times under that.”

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And during “the 43 years that that law has been in place, inflation has been, on average, 25% higher every year, above two and a half percent growth,” Wu told business leaders during her speech.

Voters approved the law in a statewide referendum in 1980. It took effect two years later in 1982, according to the Massachusetts Municipal Association.

In the more than the four decades it’s been on the books, the law has provided a bedrock for municipal budgeting, according to one analysis.

On Tuesday, Republicans and their allies suggested that any attempt to alter it would open the door to massive tax hikes and would undermine the state’s economic competitiveness.

Wu is using the discussion as “a cover to push her real agenda: higher taxes for Massachusetts. If it weren’t for Prop 2½, the cost of living in Boston would be even higher than it already is,” Paul Craney, of the business-friendly Massachusetts Fiscal Alliance, said in an email.

“Prop 2½ not only protects taxpayers, it already allows cities and towns to ask voters directly for an override if they believe more revenue is needed,” Craney continued. “Boston has never even attempted an override, which proves just how unnecessary and disingenuous the Mayor’s call to weaken this law really is,” Craney added.

Mike Kennealy, a former Baker administration official who’s one of two people seeking the GOP nomination for governor next year, vowed to “defend [the] law at all costs.”

“Proposition 2½ protects working-class families, homeowners, and renters from runaway housing costs,” Kennealy, who served as former Gov. Charlie Baker’s housing and economic development czar, said.

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“Repealing it would unleash property tax hikes, drive up rents, and crush affordability. This is nothing more than a government money grab, and leaders must speak out to defend Prop 2½ at all costs,” Kennealy said.

GOP gubernatorial hopeful Brian Shortsleeve, who ran the MBTA under Baker, offered similar opposition.

“With skyrocketing home values, property taxes are climbing quick, burdening homeowners and renters alike. Allowing local politicians to increase taxes above the 2.5% will mean more seniors being forced from their homes and housing becoming even more unaffordable for working families,” he said. “As the next governor, I will work to reduce our tax burden, not increase it.”