The Daily examined on Tuesday the merits of the first two Massachusetts ballot initiatives, which deal with the taxation of alcohol and permits to build low to moderate−income housing, respectively. We now turn to Question 3, which concerns the state sales tax.
Question 3 proposes lowering the Massachusetts state sales tax from 6.25 percent to 3 percent with the aim of stimulating the state's economy. If it passes, the 3 percent rate will go into effect on Jan. 1, 2011. If the motion is rejected, the sales tax will remain at 6.25 percent.
We strongly oppose this measure, as its passage would throw Massachusetts' already treacherous budget situation into chaos.
The prospect of lower taxes is always enticing, especially during a time when so many people are struggling and desperate for extra cash. But voters must be careful not to let the temptation of slightly lower prices lead them to act impulsively and against their own interests.
Massachusetts is already facing a budget deficit of $2 billion. An analysis by the nonpartisan Massachusetts Taxpayers Association found that reducing the sales tax to 3 percent would cost the state an additional $2.5 billion in revenue, bringing the total deficit to a staggering $4.5 billion dollars.
The Alliance to Roll Back Taxes, the sponsor of the measure, answers that this potential budget shortfall could be paid for by "cutting government waste."
The fact is, there is not enough "waste" in the state budget to pay for even a fraction of the $2.5 billion in lost revenue, on top of the $2 billion deficit that already exists. Instead, the government will be forced to cut funding for several indispensable and already struggling programs, including those relating to health care, veterans' benefits, infrastructure and public education. This is not government waste — these are critical programs on which residents of Massachusetts depend every day.
The Massachusetts Taxpayers Association also reported that the drop in the sales tax would force the state's public university system to lay off faculty and cut course offerings and would lead to a sharp increase in tuition.
To illustrate how radical the proposed measure is, all four Massachusetts gubernatorial candidates oppose it — even the Republican Charlie Baker, who favors tax and spending cuts, has denounced the measure as too extreme.
The revenue lost from slashing the sales tax in half cannot be recouped just with more frugal government spending. The measure can only be paid for with cuts to critical programs, and even several prominent Republicans acknowledge this.
The Alliance claims that the measure would boost private−sector spending, resulting in 33,000 new private−sector jobs. This claim lacks substantiation from any credible source. Instead, the consensus among lawmakers and nonpartisan analysts is that such an extreme loss in government revenue would result in layoffs for thousands of government workers; thousands of teachers, policemen, firefighters, hospital workers and other government employees would lose their jobs.
To help close the gaping hole the measure would punch in the budget, the state government would have to drastically cut the amount of aid it gives to cities and towns for locally run programs. Local government budgets are currently pinched throughout Massachusetts because the state government has already had to cut local aid in order to combat the current budget crisis.
If Question 3 passed, individual cities and towns would lose hundreds of thousands of dollars in local aid, which — in addition to the job losses — would result in more crowded schools and less effective police and firefighting units.
It is imperative that voters take heed of what the passage of this ballot initiative would entail for Massachusetts. They must not allow the allure of a tax cut sway them toward a measure that would devastate the Commonwealth's already anemic financial condition.
