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Anti-tax advocates are again taking aim at the Massachusetts sales tax, hoping to put the issue before voters this fall and cut the tax from 6.25 percent to 3 percent. But fiscal watchdogs are warning about the measure's potential impact on already-trimmed budgets.
"It would dwarf the cuts we’ve seen to date," said Michael Widmer, president of the Massachusetts Taxpayers Foundation. "I mean, this is the state’s worst fiscal crisis, so of course the sales tax ballot question couldn’t come at a worse time."
Widmer estimates that the proposed tax rollback would equal a $2.5 billion reduction in the state's budget — on top of his projected $2 billion budget shortfall for FY 2012.
"What we’re talking about here," Widmer said, "on top of the cuts that are going to be required anyway in '12, would be of a scale that is unprecedented in the state’s history and would devastate a whole range of services."
The group behind the proposal is the Alliance To Roll Back Taxes, led by libertarian Carla Howell. This week, the group submitted voter signatures to Secretary of State William Galvin, and said it has enough signatures to put the idea to popular vote in November.
While fiscal watchdogs may worry about state coffers, there appears to be political traction for the move. A poll out this spring found that nearly 50 percent of Massachusetts residents support trimming the sales tax to 3 percent.
“It has legs, certainly," said Tufts University Professor Jeffrey Berry. "Working in favor of the proposal is that we have a lot of voters who are hurting from unemployment, from underemployment, and they’re cranky, they’re frustrated, they want to lash out and vote for this just because they want to show state government up."
But, Berry said, many other voters have seen the results of budget cuts in their communities already and would look at further revenue reductions with trepidation.
Either way, Berry sees the sales tax issue remaining relevant through Election Day. In that landscape, Berry says the tax preservation groups will have a leg up.
"I think the advantage in terms of TV ads goes to the side that wants to protect the budget because I think unions are going to put some money into this," Berry said. "They have an organizational advantage."
Ballot initiatives — even if they pass popular muster — have a mixed track record in state legislatures. Ten years ago Massachusetts voters approved a rollback in the state income tax only to have lawmakers on Beacon Hill halt the effort.
Yet despite this record, and his stance on union advantages, Berry says this particular ballot initiative — should it pass — would survive the State House.
"It’s just so difficult to go against the will of the people," Berry said. "And I think that lawmakers will go along with this. They would have to overcome this in a very awkward and public way and I think they would catch a lot of flak for going against the electorate.”
This program aired on July 9, 2010.
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