BOSTON — In November, Massachusetts taxpayers will be asked if they want to vote themselves a tax cut of more than $3,000.
State lawmakers are worried the answer will be "Yes."
A ballot question would let voters abolish the state income tax. While the proposal has largely flown under the radar, Beacon Hill lawmakers and budget watchdogs are concerned the climate is right for it to pass — with disastrous consequences, in their view.
The Coalition for Small Government, which is behind the ballot question, says ending the state's 5.3 percent income tax would be anything but bad. About 3 million taxpayers would save on average $3,600 a year, according to the ballot question's sponsors. The state Department of Revenue uses a slightly lower figure — $3,180 — based on the "typical" taxpaying family of three that owns a home.
Carla Howell, the leader of the Coalition for Small Government, and a one-time Libertarian candidate for governor, said the question isn't just about voting for a tax cut. It's about a fundamental overhaul of state government.
"It will take $11 billion out of the hands of Massachusetts big government and put it into the hands of men and women who earned it," Howell said.
Howell said the state would then be forced to spend its money wisely, meaning there'd be less waste and patronage. Moreover, putting money back into people's hands would create jobs.
"The private sector operates more effectively than the government," Howell said.
Second time around
Abolishing the state income tax may seem like wishful thinking, but an identical ballot question backed by Howell received 45 percent of the vote in 2002.
The Merrimack Valley was a hotbed of anti-tax sentiment in 2002, with nine cities and towns voting for abolition, including Haverhill, Methuen and North Andover.
Howell likes her chances in 2008.
"There's a very good chance it could pass this time," Howell said.
Howell's opponents agree — and they're worried.
Michael Widmer, president of the Massachusetts Taxpayers Foundation, said voters may be in the mood to give themselves a pay raise by ending the state income tax.
The House recently voted to raise nearly $400 million in taxes. Gas prices seem to be rising without end. Property values are falling but property tax relief promised by Gov. Deval Patrick has not materialized.
"More and more, individuals are feeling squeezed," Widmer said. "And when they feel squeezed, they will vote themselves a tax cut and not contemplate the consequences."
The $11 billion price tag would be too much for the state to bear, said Sen. Bruce E. Tarr, R-Gloucester. He, too, is concerned people will vote for the tax cut in anger without weighing the outcome.
"If it were to pass, it would create tremendous problems," Tarr said. "What would come in its place could be worse."
Abolishing the income tax would unravel many of the government services people expect, said Rep. Barry Finegold, D-Andover.
The state, Finegold noted, has a constitutional requirement to provide a public education and must meet a minimum standard. Without tax revenues, that would be impossible, Finegold said, and the state would be fighting off lawsuits.
Cities and towns would see cuts to school and other local aid, which come from the state and this year will reach about $6 billion. Finegold predicted municipalities would triple property tax bills.
And the Legislature would be forced to increase a range of taxes under its control to close the $11 billion gap.
"No one likes to pay taxes," Finegold said. "We all have to do our share. Every fire department would be voluntary. One out of three teachers would be laid off."
Some of the consequences would be unseen by most people but still felt. Wall Street would lose confidence in the state's ability to repay its debts, which would make it harder and more expensive for the state to borrow, opponents say. Patrick has proposed borrowing more than $12 billion to pay for improvements to the state's roads, bridges and schools.
But Howell says opponents are just trying to scare people.
Under her proposal, the state income tax — and the accompanying revenues — would not disappear overnight. The tax rate would be cut to 2.65 on Jan. 1, 2009 and then eliminated Jan. 1, 2010.
State lawmakers won't have to raise taxes to replace the lost income tax money, she said. The state would still have $17 billion in tax revenue from other sources, which combined with federal and other funds would allow the state to keep its obligations — as long as it eliminates the waste.
"People don't understand that the state is swimming in money," Howell said. "(There would be) $17 billion after we end the income tax. The essential services people care about cost a fraction of that. The state and local governments have tons of cash. And that's something that the everyday taxpayer is running short of these days."
How Merrimack Valley voted on 2002 tax repeal
Community#Yes#No
Amesbury#2,572#2,543
Andover#6,096#6,584
Boxford#2,076#1,552
Georgetown#1,433#729
Groveland#1,356#1,167
Haverhill#8,446#7,488
Lawrence#4,863#5,224
Merrimac#1,144#1,204
Methuen#6,577#5,805
Newbury#1,456#1,536
Newburyport#3,309#4,183
North Andover#5,202#4,659
North Reading#2,730#3,055
Rowley#1,162#1,033
Salisbury#1,389#1,152
West Newbury#910#981
How Cape Ann voted on 2002 tax repeal
Community#Yes#No
Gloucester#4,534#5,234
Essex#733#829
Manchester#1,287#1,236
Rockport#1,572#2,008
