Activists push to repeal state income tax
Collecting signatures to put measure on ballot
A group of antitax activists launched a campaign over the weekend to abolish the state income tax, setting the stage for a contentious public battle if the measure is added to the ballot this fall.
After pushing a similar initiative that almost passed six years ago, a group called the Committee for Small Government is back for another round, asking voters to end the income tax and save the average taxpayer $3,600 a year. The group, led by libertarian Carla Howell, is almost certain to gather the 11,000 signatures needed to put a question on the November ballot.
To say that state officials are worried about the prospect would be an understatement.
Community, political, and business officials are grasping for words such as "chaos," "devastating," and "catastrophe" to describe the scenario that would unfold if the measure passes.
Six years ago, Beacon Hill didn't pay much attention to what seemed to be a pie-in-the-sky campaign. Confident that voters would reject the plan as folly, no one even organized a campaign to fight it.
But it almost passed, gaining the support of 45 percent of voters.
A fledgling coalition of city and town officials and union officials hired former Blue Cross Blue Shield executive and civic leader Peter Meade to head a battle against the income tax cut, and is interviewing high-powered public relations firms. Their Coalition for Our Communities plans a fund-raising and public educational campaign to combat the allure of the tax-cutting measure, which would cost the state roughly $12.7 billion - about 40 percent of the budget.
Some political observers are expecting a public tax battle the likes of which has not been seen since Governor Michael S. Dukakis was in office.
"I think back to what happened in '89 or '90. I think this would be even more contentious and chaotic than that period," said Michael Widmer, president of the Massachusetts Taxpayers Foundation, recalling the voter effort to overturn new taxes imposed under Dukakis. "This, I think, would usher in a similar kind of period because the scale of this is so enormous."
How would the state cut $12 billion?
That's three times the sum the state sends cities and towns for public schools. Laying off every state employee would only save about $5 billion, said Cam Huff, a private policy consultant who studies the state budget.
An initiative petition is intended to be binding if it passes, but the Legislature has found ways to buck the will of the people in the past. In 2002, lawmakers halted a gradual income tax rollback approved by voters two years earlier, prompting howls that they were bucking an edict from the populace. And though voters passed a ballot question in 1998 that called for publicly funded campaigns, the Legislature famously refused to pay for them.
Howell, who launched both income tax petitions, said that lawmakers should not have a choice.
"It is a binding law. It's not an opinion referendum," Howell said, suggesting that the political pressure on lawmakers would be enormous if it passes. "Voters will be expecting their state income tax to be cut in half less than two months after the election. So they'll be looking for an immediate payback for their vote and a complete elimination of the income tax one year later."
Last fall, the Committee for Small Government collected more than the 66,593 signatures needed to put the question before the Legislature, which had the choice of approving, rejecting, changing, or ignoring it. The Legislature took no action.
The initiative petition process allows citizens to make laws without legislative approval, if they can repeatedly demonstrate public support. The committee is now required to conduct a second petition drive, with a lower threshold - this time, just 11,099 signatures - to put the question directly on the ballot. The number of signatures is calculated in each case as a percentage of voters who participated in the last gubernatorial election.
Howell, who ran for governor in 2002, argues that the state budget would become more efficient if given less funding. The text of the petition speaks to her philosophy: "Massachusetts Big Government programs do not work; all too often, they do not achieve their stated objectives; all too often they fail in their duties; Massachusetts Big Government programs make things worse."
Rather than the sky-is-falling scenario that officials describe, Howell maintains that schools and governments can do more with less. "Absolutely. They can function better," she said. "If you look at the schools in this state and what results they produce, there's an almost inverse relationship between amount of money being spent and the results."
Governor Deval Patrick said he could understand voters wanting to reclaim their tax money, but he considers the petition unwise. "Just as it is the people's money it is also the people's bridges and the people's roads and the people's schools and the people's broken neighbors, in some cases," the governor said.
Opponents say that the measure would stem the flow of money to cities and towns, forcing communities to raise property taxes to keep schools open and police on the street. The income tax is more fairly applied, they said, since it draws proportionately more from the wealthy, while property taxes often hurt those who are house-rich but cash-poor.
Senate President Therese Murray said she plans to meet with the governor and the speaker of the House to plan a campaign against the income tax cut.
"When people are being squeezed, when their energy costs are rising, gas costs are going up, food costs are going up, they're going to say, 'That's a good idea. That would be good for me,' " Murray said. "But when their child has no school to go to and they can't get out their door to go to work because the street hasn't been plowed in the winter, I think the public would be back here really quick saying, 'Please, fix this.' "
Massachusetts voters have taken alternate views of tax cuts when they've had the chance to vote on them.
Even amid the 1990 recession and anger at Dukakis for his management of the state budget and tax increases, voters overwhelmingly rejected a ballot question that would have repealed new taxes and rolled back the income tax.
A decade later, Republican Governor Paul Cellucci championed a successful campaign to gradually reduce the income tax from 5.85 percent to 5 percent. In 2002, legislators halted the income tax rollback in its tracks at 5.3 percent, with provisions that it could be gradually reduced to 5 percent if tax collections outpaced inflation.
If the numbers remain on track this year, the income tax rate could go down to 5.25 percent for returns filed in April 2009.
Barbara Anderson, executive director of Citizens for Limited Taxation, a Marblehead-based lobbying group, said she would expect an $18 cut in her own taxes if this rollback takes effect - a fraction of the $500 she estimates she would have saved on taxes between 2002 and 2007 had the ballot measure been put in place.
"I'm not getting all weepy with gratitude here," she said.
Ross Kerber of the Globe staff contributed to this report.
Correction: Because of a reporting error, a Page One story Monday about the effort to repeal the income tax mischaracterized Peter Meade's working arrangement with opponents of the ballot measure. The former Blue Cross Blue Shield executive has been tapped to lead the campaign against the question but is not being paid for his work. 