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Voters defeat sales tax rollback, but repeal alcohol levy

E-mail | Print | Comments () Posted by Andrew Ryan, Globe Metro Desk November 3, 2010 12:26 AM

By Peter Schworm, Globe Staff

A ballot question to repeal the state sales tax on alcoholic beverages passed by a narrow margin last night, but voters soundly rejected a more sweeping measure to slash the general tax rate by more than half.

Fifty-two percent of voters backed Question 1, the repeal of the alcohol sales tax, versus 48 percent who voted against the measure, a margin of about 66,000 votes, according to unofficial tallies. The approval removed the 6.25 percent tax placed on liquor, beer, and wine last year, a surcharge that liquor store owners said caused them to lose customers to competitors in New Hampshire.

"It was putting too many local businesses at a competitive disadvantage," said P.J. Foster, a spokeswoman for the Yes on One Committee.

Exempting alcohol from the sales tax will cost the state about $110 million in revenue, state finance officials have said.

Question 3, which called for lowering the sales tax from 6.25 percent to 3 percent, was defeated 57 percent to 43 percent. Question 2, an initiative to repeal the state's affordable-housing law was also rejected, with 59 percent opposed.

Frustration over taxes and government spending took center stage in many political races this fall, statewide and nationally, as many voters voiced anger over a heavier tax burden in a slumping economy. But voters appeared to heed the warnings of critics of Question 3, who said lowering the state sales tax would decimate a state government already facing a deep budget deficit, and force communities to lay off teachers and public safety workers.

"Massachusetts voters made a smart decision tonight. They voted to keep our state number one in education and to make sure their police and fire first responders remain on the job," said Toby McGrath of the Massachusetts Coalition for Our Communities, a group of public employee unions and other opponents that opposed the sales tax rollback. "Voters recognized that this was a reckless proposal and once again showed they know a bad idea when they see it."

Lawmakers had raised the sales tax from 5 percent to 6.25 percent last year as a way to avoid sharp budget cuts.
Carla Howell, a leading supporter of the sales tax rollback, said it would have helped families fight through hard economic times, jump-started the state’s economy, and reined in government spending.

‘‘We’re encouraged by the direction we’re moving in,’’ she said, noting that the measure was on track to receive substantially more support than previous tax-cut initiatives. ‘‘We still have work to do informing people on where their tax dollars go and what they support.’’

On Question 1, supporters said the alcohol tax has hurt liquor stores, especially those close to New Hampshire, which has no sales tax. They noted that alcohol sold in Massachusetts is already subject to an excise tax.

‘‘The results show that more than half of voters are opposed to a double tax,’’ said P.J. Foster, a spokeswoman for the Yes On One Committee. Supporters hope the state maintains funding of alcohol-abuse prevention and treatment programs, which are now supported by the alcohol sales tax.

By a wide margin, voters turned back an attempt to overturn the state’s affordable housing law, which allows developers to sidestep some local zoning laws in exchange for setting aside a portion of a project’s housing units for lower-income residents.

Critics of the law, known as Chapter 40B, say it robs communities of control over development and lets builders reap large profits. Supporters say it has created thousands of homes for low- and moderate-income households, developments that would otherwise be blocked by local zoning laws.

‘‘The law has created 80 percent of all affordable housing outside of the major cities over the past decade,’’ said Francy Ronayne, a spokeswoman for the Vote No On 2 campaign. ‘‘It’s been enormously effective.’’