BOSTON—Massachusetts voters on Tuesday rejected a ballot question that would have slashed the state sales tax rate from 6.25 percent to 3 percent, but approved a separate initiative to eliminate altogether the sales tax on alcohol.
A third statewide ballot question, calling for the repeal of the state's key affordable housing law, was defeated.
Opponents of the sales tax initiative warned the reduction would cost the state $2.5 billion in annual revenue, endangering not only state services but trickling down to local communities in the form of education and public safety cuts. Public employees unions poured in much of the more than $4 million raised by foes to defeat the measure.
"We believe that people have recognized that Question 3 would jeopardize our state's economic recovery and every city and town in Massachusetts," said Steve Crawford, a spokesman for Massachusetts Coalition for Our Communities.
Question 1 called for repealing the 6.25 percent tax on alcohol and restore the sales tax exemption liquor enjoyed until last year in Massachusetts. Package store owners near the New Hampshire border argued that the tax had resulted in the loss of business to the tax-free Granite State.
The liquor industry, which raised more than $2.5 million for the repeal effort, also noted that alcohol was already subject to an excise tax.
"The voters supported Question One because it's unfair to double tax one product and because it was putting too many local businesses at a competitive disadvantage," said P.J. Foster, a spokeswoman for the Yes on One Committee, in a statement.
Question 1 opponents said alcohol wasn't deserving of a sales tax exemption and they warned that repealing the tax would result in the loss of more than $100 million in state revenue, much of which is earmarked for community-based alcohol treatment programs. Proponents of the repeal promised to work to maintain funding for substance abuse services.
Voters said no to repealing the 40B affordable housing law, which sets a goal of 10 percent affordable housing for cities and towns. It has been credited with creating some 30,000 affordable units in the state over the last four decades, but has also been criticized for allowing developers to sometimes skirt local zoning laws.
"With the decisive defeat of Question 2 voters today preserved the state's affordable housing law, ensuring that hardworking families and seniors have a place to call home and protecting thousands of jobs," said Francy Ronayne, a spokeswoman for the Vote No on 2 campaign, in a statement.