UPDATED 5/7/15 4:03PM: To reflect a correction. A previous version of this story indicated that local aid formulas from the state were affected by property values. While this is true, the implications upon Proposition 2 ½ and property taxes, and not local aid, is the concern of city officials and prompting the home rule legislation.

Springfield may need a legislative fix from Boston to keep its economic good news from becoming a drag. (WMassP&I)

When Springfield officials release the new budget tomorrow, they may also look to ensure upcoming construction projects actually fortify the city’s revenue base. Property tax revenue is only now recovering from the recession and concurrent home foreclosure crisis, which compounded a decades-long falloff in Springfield’s taxable commercial property. But formulas affecting property taxes could punish Springfield if the value of taxable property rises dramatically

City Hall sources say the administration will ask the City Council to approve a home rule petition to Boston that would allow Springfield to fully capture revenue from new expected growth in the tax base from projects such as CNR’s railcar facility—without it being lot to the property tax cap as part of Proposition 2 ½. The concern exists primarily for major economic development projects others than MGM as that facility has signed a separate deal under state law with the city that takes it out of Springfield’s property tax calculations.

The added revenue, in the aggregate, may only be a fraction of the city’s half-billion dollar budget, but could relieve pressure on public services and staffing. It is not clear when this proposal will be unveiled, although it may be part of tomorrow’s budget presentation.

Only Beacon Hill can tweak the aid formulas or property tax law. (WMassP&I)

These changes implicate Proposition 2 ½, a 1980 property tax law that limits municipalities property taxes and defines many of the terms used in assessing property values. Most know Proposition 2 ½ for its levy limit, which restricts annual increases in the total amount of property tax collected to 2.5%. Increased values due to construction or “new growth” is added and taxed afterward.

Proposition 2 ½’s lesser known component, the levy ceiling, puts a hard cap on municipalities’ overall effective tax rate at 2.5% or $25 per $1000 of valuation. Communities can tax residents and commercial properties at different rates, but the average overall rate cannot exceed 2.5% This, too, could be implicated in the proposal as Springfield has already hit its levy ceiling.

Richard Allen, chairman of the city Board of Assessors, confirmed in an email that “total taxable value is still expected to rise” in Springfield. Projects like the CNR plant qualify as new growth, but the tax ceiling may not be rising fast enough to capture all of that’s growth potential. Potentially worse, it could push the city into another local aid category—one with lower funding.

CAFO T.J. Plante is expected to present the budget with the mayor tomorrow. As a former Beacon Hill aide, he may play a big role in selling the petition the city seeks. (WMassP&I)

Sources say tomorrow’s budget will be balanced without using reserves and this tinkering with property values may not directly affect FY2016, but exempting new growth this year for the purposes of aid calculations could be quite impactful in future years.

Taxes are controlled by Beacon Hill, although home rule petitions on both are permitted. Still, the legislature is not usually receptive to local exceptions to major statewide policy, especially on taxes. Efforts by Boston to force nonprofits to pay more in PILOTs have floundered. Some in Springfield have proposed the city be virtually exempt from Proposition 2 ½, although no such petition has passed the Council in recent years.

Opposition to such local tax changes generally rests on a fear statewide policy, what its merits or faults, will be undermined. Passing an exemption for Boston on non-profits’ taxes or Springfield’s levy limit or ceiling, could prompt other localities to request the same and even raise pressure to change the general law itself, although pressure has been building to reassess the formulas that distribute local aide.

Few municipalities have sought local changes to Proposition 2 ½’s language in recent years. Legislator-sponsored statewide amendments to the law are not uncommon, but home rule petitions are. None were filed since 2009, the earliest year unpassed bills are available online. Even among statewide changes, the most significant may be a 2009 bill filed by Arlington rep Sean Garballey to change Proposition 2 ½’s formulas to follow inflation. It did not advance.

The legislature might be receptive to Springfield’s petition. Given Democratic supermajorities, this would be sufficient should Gov. Charlie Baker stand opposed. Springfield is not particularly effective at lobbying for itself on Beacon Hill, legislators might be willing to assist the city’s potential upswing. More importantly, Beacon Hill would be helping without spending its own nickel on the city.

However, if the legislation resulted in taxing property in the city above the effective 2.5% rate, it could have trouble on the Council. Michael Fenton, the body’s President, was skeptical speaking to WMassP&I at a political event in Indian Orchard Wednesday night.

“Never gonna happen,” he said in terms of such an idea’s prospects. “I would not support that.”

An email to the mayor’s spokesman was not immediately returned and other officials could not be reached for comment.