About the Division of Local Mandates - Local Financial Impact Review: The Impact of the State-Owned Land PILOT and Solar Taxation Policies on Municipalities

An overview of the responsibilities and activities of the Division of Local Mandates.

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The Division of Local Mandates (DLM) was established by Proposition 2½, an initiative to limit property tax increases, in order to determine the financial impacts of proposed or existing state laws, regulations, and rules on cities and towns. Proposition 2½ limits a city or town’s authority to raise real estate and personal property taxes. Under the strict limits on taxing authority set by Proposition 2½, cities and towns could no longer simply raise property taxes to fund state-mandated programs. Thus, DLM was created to respond to municipal petitions to determine whether a state mandate falls within the purview of the Local Mandate Law.

The Local Mandate Law, Section 27C of Chapter 29 of the Massachusetts General Laws, generally provides that post-1980 laws, regulations, or rules that impose service or cost obligations on cities, towns, regional school districts, or educational collaboratives and meet certain thresholds shall be effective only if locally accepted or fully funded by the Commonwealth. Any protected party aggrieved by such a law, regulation, or rule may petition DLM for a determination of whether the law, regulation, or rule constitutes a mandate and to make a cost determination of the state funding necessary to sustain a mandate.

In 1984, the Massachusetts General Court expanded DLM’s powers of review by authorizing DLM to examine any state law or regulation that has a significant local cost impact, regardless of whether it satisfies the more technical standards under the Local Mandate Law. This statute is codified as Section 6B of Chapter 11 of the General Laws. As a result of this law, DLM releases reports known as “municipal impact studies” or “6B reports,” which examine various aspects of state law that may impact municipalities.

Through these functions, DLM works to ensure that state policy is sensitive to local fiscal realities so that cities and towns can maintain autonomy in setting municipal budget priorities.

Date published: December 10, 2020

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