It was passed by ballot measure,[1] specifically called an initiative petition within Massachusetts state law for any form of referendum voting, in 1980 and went into effect in 1982.
[citation needed] A side effect of Proposition 2½ is that municipality income will decline in real terms whenever inflation rises above 2.5%.
[11] A professional survey firm conducted half-hour phone interviews in 58 randomly selected cities in Massachusetts where 1,561 household heads answer questions about Proposition 2½.
Finally, analysis of the survey shows that voters who expected welfare to be cut back were more likely to support Proposition 2½.
The lack of significant changes was due in part to the state government increasing general purpose aid to municipalities, which helped them to stay away from budget shortfalls.
Effective property tax rates declining and an increase in community taxes were a result of various factors including a 64% increase in real estate aid to municipalities between 1981 and 1988, declining school expenses, and a region wide real estate boom.
Over time, Proposition 2½ would have become more binding due to the fact that it is operated in nominal terms, meaning that the rules it follows do not change in response to prices, costs, or spending.