ECONOMIC ANXIETY caused by the crisis in the financial markets, and all its attendant uncertainty, could be enough to cause some voters to favor the question on November’s ballot to eliminate the state income tax. But Question 1 will make things incalculably worse. The Globe urges every citizen, regardless of income, to Vote NO on Question 1.
The state treasurer already has said he will have to borrow at higher interest rates and tap rainy day funds in order to cover current local aid payments to the cities and towns. It’s not hard to imagine how local communities would fare if the state were suddenly starved of 40 percent of its operating budget, which is what Question 1 would do. Local services from schools to police stations to senior centers would be on the chopping block. Property taxes – the most unfair and hated of all assessments – would likely rise to make up the difference. That explains why the Massachusetts Municipal Association, representing all 351 cities and towns, opposes Question 1.
Small businesses are the job generators in Massachusetts, and they are trying hard to provide decent wages and benefits to their employees. The state’s landmark law to extend healthcare coverage to all residents through affordable personal plans would likely come to a screeching halt with a cut in revenue of $12 billion, which is what Question 1 would cost. Improvements to local roads, parking and streetlights, and crime reduction efforts all would suffer. That is why the Greater Boston Chamber of Commerce, and other chambers from Springfield to Attleboro, representing thousands of small businesses, oppose Question 1.
The state’s most valuable natural resource is its brainpower. Cutting $12 billion from the budget threatens teachers, after-school programs, MCAS remediation and summer school, special education classes, sports and arts programs, state college scholarships, workforce training and literacy classes. That is why the Massachusetts Teachers Association and the Massachusetts Association of School Superintendents – labor and management alike – oppose Question 1.
Proponents of limited government envision a world where private institutions or charities would do the work of government. But a profit-seeking private sector can’t or won’t provide for many human needs, and charity cannot begin to make up the difference. The Catholic Charitable Bureau of the Archdiocese of Boston and the Greater Boston Interfaith Organization oppose Question 1.
After steady work by fiscal conservatives in the Legislature, Massachusetts has shed its “Taxachusetts” epithet and now ranks 32nd for overall tax burden – that is, all taxes paid as a percentage of personal income. That is below the national average and well below competitor states such as New Jersey, California and Michigan. The mix of taxes is now fairly stable and in good balance, with the more progressive income tax taking up most of the burden. The business-backed Massachusetts Taxpayers Foundation and the state’s House and Senate Republican leaders oppose Question 1.
Small-government extremists who have mounted this question say the state is swimming in money. But the magnitude of this tax cut cannot be waved aside. Much of the state budget is dedicated to financial obligations like debt service and pensions. The Massachusetts Taxpayers Foundation estimates that some $13 billion in state spending is non-discretionary: required by court order, the constitution, or federal law. The $12 billion cut would have to come out of what is left.
The state could stop spending every dime it now spends on local aid and every dime on human service programs – food banks, domestic violence and homeless shelters, care for autistic children, substance abuse and more – and still not have enough to make up for what is lost to Question 1. The state could fire all 67,000 state employees – every prison guard and college teacher – and still have to find another $7 billion.
Carla Howell, chairwoman of the committee sponsoring Question 1, says 41 cents of every tax dollar is wasted. How does she know that? It’s what people estimated in a survey she took. “That’s just the tip of the trash heap,” she says. But one person’s trash is another’s crucial aid or life-giving opportunity. Question 1 doesn’t identify which is which; it is a blunt budget ax.
Voters are understandably anxious about their futures, and angry at institutions that have allowed the economy to deteriorate. But eliminating the income tax is not the way to strike back at greedy Wall Street brokers, high gasoline prices, double-dipping public employees, or crashing home values. We hope voters will remember the slogan that helped defeat an earlier tax repeal effort – “I’m mad, but I’m not crazy” – and reject this reckless measure.
It is tempting to try and bully the Bay State’s spend-ocrats into reforming their ways – forcing them to strip the state budget of every gazebo, every bloated pension, every “first deputy assistant to the assistant manager” at every obscure state agency by starving them of billions in revenue.
But there is sufficient economic chaos churning around us at the moment to know that now is not the time to take that kind of a fiscal gamble.
We urge a “no” vote on Question 1, the income tax repeal. But we likewise urge voters to use the passion and anger they presently feel over the breathtaking inefficiency of our state government to demand reform.
And if the folks on Beacon Hill don’t take easily to such direction, well, then voters should elect the kind of leaders who will.
Yes, those who want to scrap the state income tax do have a compelling message: Eliminate the personal income tax, removing $12 billion from the state’s revenue stream, thereby forcing state budget-writers to live within their means as the average citizen must.
Do away with pension double-dippers. Require state employees to contribute more for their health care. Take the state cars away from the parole board.
In return, they promise, taxpayers will enjoy an average of $3,600 in tax relief each year.
And while we support a bit of spine-stiffening of government bureaucrats on occasion, the group behind this tax repeal would have us believe that Beacon Hill is going to suddenly find religion on the spending issue. In reality, they will simply start passing around a different collection plate.
A huge portion of the budget is chewed up, after all, by federal mandates, debt service, pensions, binding labor agreements and so on. So to keep pace with local aid, school funding and the like we would be in for . . . a 15 percent sales tax, perhaps? A 10 percent meals tax? A new statewide property tax on top of the local property tax?
We simply can’t support the inevitable shift in the tax burden that will flow from such a repeal.
Our elected leaders ignore voter anger over the economy, high fuel prices, mortgage bailouts for irresponsible borrowers and the $700 billion Wall Street rescue plan at their peril. While we recognize that they are unaccustomed to the use of a scalpel to rein in spending, they ought to brush up on their knife skills.
Because if they refuse to do so, the ax is inevitable.
When voters faced a ballot question to repeal the state income tax six years ago, tax supporters dismissed it as an outlandish idea and spent just $4,600 to oppose the question. So they were stunned when it collected 45 percent of the vote.
This time, Question 1 opponents say, they are taking no chances. They formed the Coalition for Our Communities to raise money and make the case for keeping the income tax, the elimination of which they say would wipe out funding for schools, public safety, and other services and create turmoil for the Massachusetts economy.
By Oct. 15, they had spent more than $3.5 million to make their case on television and in print, as well as through door-to-door campaigning and phone banks, compared with less than $400,000 by the Question 1 backers, the Committee for Small Government, which is led by Carla Howell, a Libertarian.
A new poll released last night suggests that the anti-Question 1 investment is working. In a survey of 400 voters conducted Monday through Wednesday, 59 percent said they oppose the question and 26 percent support it, according to a 7News/Suffolk University poll.
A Suffolk poll conducted in August showed 50 percent opposition and 36 percent support.
“That’s telling me the arguments on the no side actually have traction,” said David Paleologos, director of Suf folk University’s Political Research Center. A majority of Republicans polled opposed the question, as opposed to a majority who supported it in August, he said.
Steve Crawford, spokesman for the Coalition for Our Communities, said the coalition has “mounted an aggressive campaign that includes all the components that modern campaigns utilize.”
Crawford declined to address the polls directly, but said, “We’re not taking anything for granted.” Advertising will increase up to Election Day, Nov. 4, he said.
Kamal Jain, spokesman for the Committee for Small Government, said ballot questions are difficult to predict. Polls failed to predict the support Question 1 received in 2002, when the economy weighed less heavily on people’s minds, he said.
Each side has received a majority of its donations from out of state, according to analysis by the state Office of Campaign and Political Finance, which collected finance reports through Oct. 15.
Almost 52 percent of the Coalition for Our Communities’ $4.5 million in cash and $520,000 in in-kind contributions, including use of office space and staff time, came from out-of-state donors, overwhelmingly from labor organizations. The National Education Association contributed $1.5 million, and its state affiliate, the Massachusetts Teachers Association, gave almost $1.6 million in cash, plus another $225,000 donated in-kind.
Jain said the millions in opposition funding “from the people who make their living off of tax dollars” illustrate why the tax must be abolished.
“They represent the special interests that lobby for spending,” said Jain, a former Libertarian candidate for several offices. He said repealing the 5.3 percent tax – which would range widely but amount to roughly $3,700, based on average income – would help middle-class families afford to live in Massachusetts and force government to spend more efficiently and with more transparency.
Jain, a Lowell resident who works for a software start-up, gave $4,600 to his own group, though on state disclosure forms he alternately declined to list his occupation and employer or gave them as “hard working taxpayer” and “not the government.”
The Committee for Small Government had collected $431,489, almost 54 percent of which came from outside Massachusetts. The donors were mostly individuals, like software executive Craig Franklin ($25,000) and investor Jason Hommel ($10,000), both from California. The committee received one in-kind contribution, a free magazine ad, worth $1,900, from Dartmouth-based SoCo, which covers Southeastern Massachusetts.
Crawford said out-of-state donors to the other side “are using Massachusetts as an experiment.” The national unions, he said, all have members here with a stake in the outcome.
The $1.5 million from the National Education Association presents a significant piece of the tens of millions that the union is spending on ballot questions and political campaigns across the country, said Karen White, director of campaigns and elections for the Washington, D.C.-based organization, which represents more than 3 million educators and school staff.
“We spend money when we know we need to win an issue, and this is one of the most critical issues to our members,” said White, adding that the money comes from political donations by members. “It’s an important contribution to a reckless initiative that we hope to defeat.”
The question, brought by a voter petition organized by the Committee for Small Government, would become law if approved. It would reduce the state’s income tax from 5.3 percent to 2.65 percent on Jan. 1 and eliminate it entirely one year later. That would cut about $12.5 billion, or roughly 40 percent of the state’s revenues, based on last year’s budget.
Those figures are enough to unite labor and business interests that ordinarily might clash on Beacon Hill. It has also generated opposition for Question 1 from many public officials.
On Monday, the Lexington firm Global Insight released a report commissioned by Associated Industries of Massachusetts, Greater Boston Chamber of Commerce, Massachusetts Business Roundtable, and Massachusetts Taxpayers Foundation that said Question 1 “goes too far.”
Eliminating the income tax, particularly during a global financial crisis, would ruin the ability of the state and its cities and towns to borrow money, drive up other taxes and fees – like property tax, public college tuition, and tolls – and spoil the state’s attractiveness to companies, the report said.
Also this week, the Boston City Council became the latest official board to pass a resolution opposing Question 1; the list includes selectmen in Wayland, where Howell, a former Libertarian gubernatorial candidate, runs the pro-Question 1 effort from her home.
Yesterday, some of Boston’s city councilors joined leaders from a host of social service and community activist organizations at an anti-Question 1 press conference downtown.
“Passing Question 1 would be a disaster,” said Councilor Chuck Turner, predicting a loss of $300 million in state aid to Boston, which would trigger thousands of layoffs and eliminate or reduce all manner of services.