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Backers say sales tax cut to be on ballot

OPPOSES 3 PERCENT ROLLBACK PROPOSAL Michael Widmer of the Mass. Taxpayer Foundation says the state collects less in sales taxes than most other states. OPPOSES 3 PERCENT ROLLBACK PROPOSAL
Michael Widmer of the Mass. Taxpayer Foundation says the state collects less in sales taxes than most other states.
By David Abel
Globe Staff / June 24, 2010

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Voters in November will get the chance to slash the state sales tax from 6.25 percent to 3 percent, according to advocates who say they submitted more than enough petition signatures yesterday to force the item onto the ballot.

Carla Howell — chairwoman of the Alliance to Roll Back Taxes, based in Wayland — said her group submitted about 19,000 signatures to town and city clerks by yesterday’s deadline, a comfortable margin over the required 11,099 signatures.

Her group put similar measures on the ballot in 2002 and 2008, but neither passed.

She called the latest campaign a “modest start to bringing the state government in line with the level of spending that’s appropriate.’’ The proposal, Howell said, would force state officials to cut spending by more than $2 billion.

“There’s only one way to create jobs, and that’s to cut government spending and cut taxes substantially,’’ she said. “And that’s what we’re doing.’’

But critics said passage of the proposed tax cuts would mean a financial crisis, as the state struggles to recover from the recession and overcome a $2.5 billion budget shortfall.

“It would mean drastic cuts in aid to cities and towns, public higher education, health care, human services, and public safety,’’ said Michael Widmer, president of the Massachusetts Taxpayers Foundation. “It would come after several rounds of cuts and would have a dramatic impact on state and local programs that the public has rightly come to expect.’’

Last year, lawmakers increased the sales tax from 5 percent to 6.25 percent, which they said generated more than $600 million as the state sought to balance its budget while cutting a raft of programs and benefits. The additional taxes cost residents an estimated $140 per person or $370 per household, according to Widmer’s group.

But Widmer pointed out that the state continues to collect less in sales tax than do most of the 45 states that have a sales tax. Only three other states that collect sales taxes have lower tax burdens, because Massachusetts has a narrow sales tax base that excludes groceries, services, and clothing up to $175, he said.

In testimony this spring before the Legislature’s Joint Committee on Revenue, Jay Gonzalez, secretary of the Executive Office for Administration and Finance, estimated that cutting the sales tax to 3 percent would cost the state $958 million in fiscal 2011 and about $2.5 billion in fiscal 2012.

He said that cutting state spending on education, from preschool to state universities, would amount to only $1.5 billion. The state spends a similar amount on public safety, which includes the State Police and the Department of Correction.

“The governor has said that he would like to see a rollback of the sales tax when the state is on firmer fiscal footing,’’ said Cyndi Roy, a spokeswoman for the Executive Office for Administration and Finance, pointing out that the state has lost $4 billion in tax revenue since the beginning of the fiscal crisis and has made deep cuts. “Under the current proposal, however, the services that citizens depend on every day — education, health care, and public safety — would be devastated if this provision became law.’’

Officials from the staffs of state Treasurer Timothy P. Cahill, who is running for governor as an independent, and Republican gubernatorial hopeful Charles D. Baker said they want to see the sales tax rolled back to 5 percent. But they said they would implement the cut to 3 percent, if voters support the measure.

“Treasurer Cahill was an early opponent of the hike in the sales tax,’’ Amy Birmingham, the Cahill campaign’s chief of staff, said in a statement. “That being said, if the voters make the choice to roll it back to 3 percent, he would respect and honor that decision. A rollback to 3 percent would be difficult, and the need for deep, broad-based cuts elsewhere would be certain.’’

Rick Gorka, a spokesman for the Baker campaign, said his candidate also supports another proposed ballot question that would repeal last year’s application of the sales tax to alcohol sales. The administration estimates that the tax will generate $93 million in state revenue this fiscal year and $110 million in fiscal 2011.

“The voters have a choice, and Charlie will respect the will of the voters,’’ Gorka said.

City and town clerks have until July 2 to certify the signatures for the proposed ballot questions. Howell’s group has until July 7 to submit the signatures to the Elections Division of the secretary of the Commonwealth.

Howell nearly succeeded in repealing the state income tax in 2002, receiving 45 percent of the vote. In 2008, when opponents outspent her more than 10 to 1, she lost by a much wider margin, 70 percent to 30 percent.

Howell said she hopes this year’s effort to cut the sales tax pressures state officials to reduce pensions and benefits of state workers and cut subsidies to private businesses.

“There’s a lot of waste,’’ she said. “If I could, I would say to each department that they should disclose all their spending. If they didn’t, their budgets wouldn’t be funded. It would expose billions and billions of dollars of waste.’’

But Barry Bluestone, an economist who serves as dean of the School of Public Policy at Northeastern University, said there is little left to cut in the state budget.

“The rollback to 3 percent would be disastrous,’’ he said. “If the rollback succeeds, you would have large layoffs, lots of unmet needs, and it would create a serious fiscal crisis just as the state is recovering from the recession.’’

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said the state’s towns and cities would suffer, too.

“This would be devastating to the economy and threaten basic services,’’ he said.

David Abel can be reached at dabel@globe.com.

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