Why haven’t rising property values given us rising revenues to meet growing expenses?
Because Proposition 2½ restricts the ability of towns to raise revenues from taxes, rising property values do not automatically increase revenues (see What is Proposition 2½?). Taking into account all sources of revenue, including state aid, fees and fines, general fund revenues are expected to rise by only 2.4% next year. With the consumer price index up 4.3% over the last twelve months, the national employee cost index for state and local government employees up 4.1% and extraordinary increases in energy and health insurance costs, revenues simply are not keeping up with expenses.
