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COMMENTARY

Californians’ refusal to raise taxes for firefighting and climate mitigation is a wake-up call for New England

The region’s state governments should abolish the cap on municipal property taxes because it hinders urgently needed public investments in climate resiliency, RISD environmental studies Professor Jon Nelson says.

Voters at a polling place in Sacramento, California, on Election Day, Nov. 8, 2022.JIM WILSON/NYT

It is perhaps fitting that California, where the modern tax revolt movement began in 1978, is the site of the most recent failure to invest in climate mitigation and adaptation. The revolt capped property and income taxes in that state and requires any increases be determined by statewide referendums. The state declined on Nov. 8 to increase income taxes on millionaires to fund electric car adoption and firefighting capabilities. Despite the obvious need for investment — California has suffered record wildfires in recent years resulting in hundreds of deaths — voters’ antipathy toward taxes destined the measure to defeat.

However, California is far from the only state that faces difficulty raising taxes for schools, infrastructure, or climate mitigation and adaptation. Though headlines focus on California, my research has found that the property tax revolt has led coastal New England communities to increasingly subsidize coastal landowners through ever-increasing town expenditures on their behalf while limiting their ability to recover their investment through increased taxation.

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The situation is exacerbated by the fact that unlike other states where municipalities and counties can assess taxes on sales and more, in New England, municipalities rely almost exclusively on capped property taxes, politically fraught state/federal transfers, and costly bonds to fund both town operations and infrastructure and adaptation efforts. While voters or town councils can override these caps and/or apply for exemptions in emergencies, they rarely do. Instead, most climate infrastructure and adaptation efforts are funded by issuing bonds, such as those approved by voters in the states of Rhode Island and New York on Nov. 8.

While the bond market remains open to municipalities, this is a problem that local governments cannot borrow themselves out of. Bonds must be paid back with interest, but the threat of sea-level rise to property values means that most debt-funded projects will be lucky to preserve a town’s tax revenue, let alone increase it. Instead, communities are mortgaging their futures to simply keep pace on an accelerating treadmill driven by climate losses and infrastructure expenditures.

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It is not that communities — aside from a handful where climate change is still denied — do not know their vulnerabilities or have ideas to solve them. Rather, transformational change is fiscally impossible without the ability and will to increase taxation. There are, in fact, state and federal grants available to fund such projects, but communities lacking staff needed to apply for these competitive awards are struggling to maintain their current budgets, and cannot expand town government salary costs. In this way, wealthier communities monopolize these programs to maintain their coastal property values, while poorer communities’ risks — and especially risks to disadvantaged neighborhoods — increase unabated.

The window of time to prepare for sea-level rise is rapidly dwindling, and the money needed to do so is disproportionately awarded to towns with budgets ample enough to compete for resources. That Californians, after the worst decade of wildfires on record, refused on Tuesday to raise taxes to fund climate mitigation and firefighting should serve as a wake-up call for New England state governments. The tax revolt may have made sense in an age of a docile climate, but it now hinders urgently needed public investments in climate resiliency. Specifically, state governments should abolish the cap on cities’ and towns’ tax revenues, expand the taxes they’re allowed to collect, and invest directly to level the playing field between rich and poor communities. Municipalities may still decline to raise taxes for such investments, but at least they’ll once again have the power to make that choice.

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Jon M. Nelson, PhD, is a sociologist and professor of environmental studies at the Rhode Island School of Design whose research focuses on municipal adaptation to climate change in New England.