Competition and property tax limit overrides: Revisiting Massachusetts' Proposition 2½

•Proposition 2 1/2 is Massachusetts' voter initiated property tax limitation program.•Municipalities voted on over 4500 overrides between 1982 and 2010.•A neighboring town's vote raises the chance of an initial override vote by 10–15%.•Patterns of spatial dependence show winning votes matter more than losses.

This paper looks at the role of spatial proximity of other towns' decisions to hold an override vote on the decision of a Massachusetts town to hold an initial override vote under Proposition 2½. We find that if a neighboring town has already held a vote at some point in the past, a town's likelihood of holding an initial vote increases by 10–15%. A prior vote being successful has a strong impact, whereas losing votes are relatively ignored. The presence of spatial dependence remains when we look at the specific purpose of override vote, or at the annual number of votes that have occurred between 1982 and 2010. This result is consistent across weighting schemes.