Scratch & Win: Part 5 - The Cherry Sheets
Host: Ian Coss
Release Date: February 19, 2025
Produced by: GBH News
Introduction
In Part 5 of the "Scratch & Win" series titled "The Cherry Sheets," host Ian Coss delves into the intricate relationship between Massachusetts' Proposition 2½, local government finances, and the state lottery. This episode explores how a tax revolt in the late 1970s and early 1980s reshaped municipal funding and reinforced the lottery's role as a critical revenue source for cities and towns across the state.
Setting the Stage: Medford's Lottery Boom
[00:43] John Hashimoto:
"At the Sunnyhurst Farms Market in West Medford today, customers were lining up for a dance with Lady Luck."
Ian Coss introduces the episode by highlighting Medford, a small city near Boston, where the lottery became a lifeline for struggling municipal finances. With the city facing a $4 million budget gap, residents preferred spending on lottery tickets over accepting tax hikes.
[01:35] John Hashimoto:
"Last year, $17.5 million spent on lottery tickets while the city struggled to close a $4 million budget gap."
This juxtaposition underscores the central dilemma: relying on voluntary gambling revenue versus mandatory taxation.
Historical Context: Lotteries and Taxation
Coss provides a historical backdrop, noting that lotteries have long been intertwined with government finances in America, dating back to Thomas Jefferson. However, the modern era saw states like Massachusetts pushing the envelope, testing whether gambling revenues could effectively replace traditional taxes.
[01:53] John Hashimoto:
"Like most of Massachusetts, Medford would rather play the lottery than pay more taxes."
The Property Tax Revolt: Proposition 2½
The episode shifts focus to the broader anti-tax movement, particularly the property tax revolt that culminated in Proposition 2½ in Massachusetts. This measure aimed to cap property taxes, mirroring California's Proposition 13.
[05:35] Isaac Martin:
"Property taxes in one form or another predate the Republic. This is the oldest form of taxation that's still in use in the United States."
Professor Isaac Martin explains the entrenched nature of property taxes and their political sensitivity due to the challenge of accurately assessing property values.
[10:05] John Hashimoto:
"2 and a half, cities and towns cannot tax property at more than 2.5%."
Proposition 2½ sought to limit property tax revenues to 2.5% of total property values, effectively capping the funding available for local governments.
Barbara Anderson: The Unexpected Leader
Barbara Anderson emerges as the unexpected face of the tax revolt. Initially a housewife and swimming instructor, her frustration with property taxes led her to volunteer with Citizens for Limited Taxation (CLT), eventually becoming its director.
[12:26] Barbara Anderson:
"I was brought in as a secretary."
Her rise from secretary to figurehead in three years exemplifies the grassroots nature of the movement.
[14:54] Susan Scher:
"I clearly remember sitting on my front porch in Danvers getting the latest notice of the property tax increase and just sitting there in tears knowing that there went the monthly movie,..."
Susan Scher’s poignant testimony highlights the personal impact of rising property taxes, fueling Anderson's campaign.
The 1980 Election: A Pivotal Moment
The 1980 election was a watershed moment when Proposition 2½ passed in Massachusetts, mirroring California's earlier success. This marked the peak of the property tax revolt, with lasting political implications.
[19:31] Ian Coss:
"That night, Reagan's victory was called before the polls had even closed. In California, it was clear which way the winds were blowing and they blew the same way in Massachusetts."
The alignment with Reagan's anti-tax stance signaled a broader national shift towards tax reduction policies.
The Aftermath: Budget Crisis and Local Aid
Following the passage of Proposition 2½, cities like Fitchburg faced severe budget shortfalls. David Gilmartin, the young mayor of Fitchburg, recounts the tough decisions he had to make, including closing a beloved fire station.
[27:15] David Gilmartin:
"And what it did is it changed the equation for taxes. In the old days, you'd total up all your expenditures once the budget was finalized and then you figured out your tax rate."
The state’s budget process became a battleground, with local aid—funds designated for municipalities—becoming a critical issue. James Siegel and Chet Atkins emerged as key figures advocating for increased local aid amidst the financial crisis.
The Role of the Lottery: A Lifeline for Municipalities
As traditional tax revenue options dwindled, the state lottery became an essential revenue stream for local governments. The lottery's ability to generate significant funds without direct taxation provided a seemingly magical solution to the budget crisis.
[42:45] Barbara Anderson:
"The lottery, of course, was coming to the cities and towns anyways, but we just included it in the number that we were doing."
[43:18] Chet Atkins:
"Fulfilling its potential, needed more advertising and ability to get into new kinds of games..."
Under Atkins' influence, the lottery underwent substantial changes, including increased advertising and the introduction of new games, positioning it as a cornerstone of municipal funding.
Legislative Battles: The Green Monster Budget
Chet Atkins and James Siegel orchestrated the "Green Monster" budget—a massive, 953-page document aimed at balancing state finances by making tough cuts while ensuring increased local aid through the lottery.
[44:51] Chet Atkins:
"As soon as it was released. And, of course, my nickname was Chester the Molester."
Atkins' aggressive reformist approach earned him both notoriety and respect, as he pushed through significant changes to secure the needed $300 million for local aid.
[45:42] Chet Atkins:
"Any bicameral legislative body, there's always tension between the House and the Senate."
The "Green Monster" faced stiff opposition, leading to prolonged negotiations and political maneuvering within the state legislature.
Long-Term Implications: Enduring Legacy of Proposition 2½
Proposition 2½ left a lasting impact on Massachusetts' municipal finances and the state's lottery system. The episode highlights how the measure not only limited property taxes but also entrenched the lottery as a vital, albeit unreliable, revenue source for local governments.
[52:03] Barbara Anderson:
"We will have three minutes for the first two hours of public comment."
The enduring debate over property taxes and the reliance on lottery revenues continues to influence local governance and fiscal policies to this day.
[53:06] Chet Atkins:
"We basically gave them free rein. We essentially said, we're getting out of your business and telling you what to do."
The lottery was empowered to expand its operations significantly, ensuring a steady influx of funds for municipalities but also raising questions about the sustainability and ethical implications of relying on gambling revenues.
Conclusion: The Unfolding Story of Local Government and Lottery Revenues
"The Cherry Sheets" poignantly illustrates the complex interplay between tax policy, local government funding, and state-run lotteries. Through the struggles of figures like Barbara Anderson and David Gilmartin, the episode underscores the challenges municipalities face in balancing fiscal responsibility with public service delivery.
[50:38] Ian Coss:
"I don't know what this city is doing. My taxes have tripled. And we remain deeply divided about how to pay for our local government."
The legacy of Proposition 2½ and the state's lottery system continues to shape the financial landscape of Massachusetts, reflecting broader national trends in taxation and government funding.
Notable Quotes
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Barbara Anderson [16:45]:
"Tell you what I'm going to do. I'm going to cut your property tax, your excise tax."
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Isaac Martin [18:04]:
"You could ask people, hey, do you want lower taxes? And not tell them what it would cost them in terms of lost public services? And that that could become a winning election issue."
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Chet Atkins [41:16]:
"Like the registry. Motor vehicles had always been and sacrosanct, filled with people who were politically connected. But it was a huge problem."
Final Thoughts
Part 5 of "Scratch & Win" eloquently captures a pivotal moment in Massachusetts' history, where grassroots activism, political strategy, and state-run lotteries converged to redefine municipal funding. The episode serves as a critical examination of how tax policies and voluntary gambling revenues intertwine, leaving a complex legacy that continues to influence local governments today.
Credits:
Host and Scriptwriter: Ian Coss
Executive Producer: Devin Maverick Robins
Producers: Isabel Hibbard and Ian Coss
Story Editor: Lacy Roberts
Fact Checkers: Ryan Alderman and Isabel Hibbard
Scoring and Music Supervision: Ian Coss
Graphic Design: Bill Miller
Project Manager: Meiqian He
For more information and to access full transcripts, visit gbhnews.org/scratchandwin. Follow the series on the GBH YouTube channel for additional archival footage.
This summary is intended for informational purposes and to provide a comprehensive overview of the podcast episode for those who have not listened to it.