The fact that the law prohibits ALL political messages doesn't make it conform to the First Amendment.
Here's a link to the 2015 case:
http://www.supremecourt.gov/opinions/14pdf/13-502_9olb.pdf
Now on the surface this seem to be different, because that related to church signs, but this case is a very solid precedent that states that this law would be subject to strict scrutiny:
(a) Because content-based laws target speech based on its communicative content, they are presumptively unconstitutional and may be justified only if the government proves that they are narrowly tailored to serve compelling state interests. E.g., R. A. V. v. St. Paul, 505 U. S. 377, 395. Speech regulation is content based if a law applies to particular speech because of the topic discussed or the idea or message expressed. E.g., Sorrell v. IMS Health, Inc., 564 U. S. ___, ___–___. And courts are required to consider whether a regulation of speech “on its face” draws distinctions based on the message a speaker conveys. Id., at ___. Whether laws define regulated speech by particular subject matter or by its function or purpose, they are subject to strict scrutiny. The same is true for laws that, though facially content neutral, cannot be “ ‘justified without reference to the content of the regulated speech,’ ” or were adopted by the government “because of disagreement with the message” conveyed. Ward v. Rock Against Racism, 491 U. S. 781, 791. Pp. 6–7.
(b) The Sign Code is content based on its face. It defines the categories of temporary, political, and ideological signs on the basis of
their messages and then subjects each category to different restrictions. The restrictions applied thus depend entirely on the sign’s
communicative content. Because the Code, on its face, is a contentbased regulation of speech, there is no need to consider the government’s justifications or purposes for enacting the Code to determine whether it is subject to strict scrutiny. Pp. 7.
...
A sign ordinance narrowly tailored to the challenges of protecting the safety of pedestrians, drivers, and passengers—such as warning signs marking hazards on private property, signs directing traffic, or street numbers associated with private houses—well might survive strict scrutiny. The signs at issue in this case, including political and ideological signs and signs for events, are far removed
from those purposes. As discussed above, they are facially content based and are neither justified by traditional safety concerns nor narrowly tailored.
What is the compelling state interest here, and how is it narrowly tailored?
The town is going to get whacked if it tries to enforce this.
The town could regulate signage/flags if they obstructed the views of drivers/pedestrians, and thus were a safety hazard. The sign could restrict giant flagpoles if they were a safety hazard. The town may surely limit placing signs of a certain size close to public thoroughfares.
The town just cannot say "we don't wanna see political signs". That does not survive a strict scrutiny test, and all nine justices struck the ordinance in Reed v Gilbert.
It's worth reading the entire case, because Kagan, joined by Ginsburg and Breyer, points out some of the problems inherent in the majority's analysis. But nonetheless, Kagan called the town's justification "laughable" in that case.
Supressing political speech will cause the hackles of justices to go up, and reasonably so.
The town can't enforce this thing, and it shouldn't try to do so.
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