Council In the News Index

Coming Clean on Question 3 (Boston Globe)

By Scot Lehigh  |  October 22, 2010

BACK IN 2002, I was impressed with Carla Howell, who was running for governor as a libertarian and asking voters to support a ballot question to repeal the state income tax.

Although I didn’t agree with her tax-cutting initiative, I gave her credit for specifying the state services she considered essential and for forthrightly acknowledging that “without the income tax, many social programs will no longer be affordable.’’ And I quoted her, approvingly, to this effect: “People are thoughtful and want real information.’’

Fast forward eight years. Howell isn’t a candidate this time around, but she is pushing a ballot question to cut the sales tax from 6.25 percent to 3 percent. That rate cut would reduce state revenues by about $2.5 billion, exacerbating an upcoming structural budget deficit of $2 billion or so.

When Howell debated Massachusetts Taxpayers Foundation President Michael Widmer on NECN recently, host Jim Braude asked the obvious question: Wouldn’t her ballot initiative mean a reduction in state services?

“No, not at all,’’ Howell replied. “Remove the waste, remove the patronage, the sweetheart deals.’’

She added: “The Democrats, the Republicans, independents, know that 30, 40 percent or more of state spending, of that $52 billion, is pure waste, and it would not affect services at all.’’

That’s silly on several fronts. First, the state’s actual budget is about $30.8 billion. To get to $52 billion — and thus make the cuts from Question 3 seem less onerous — Howell is, among other things, treating billions in Lottery prize payments and the simple transfer of money between accounts as state spending.

Second, it’s malarkey to claim that 30 to 40 percent of the budget is waste. Howell justifies her assertion by saying that according to a 2008 poll, that’s what Massachusetts voters think. “It is well-known that Massachusetts government is loaded with waste,’’ she told me.

If so, it should be relatively easy for Howell and the Alliance to Roll Back Taxes to outline enough painless cuts to offset the $2.5 billion in lost revenue from Question 3. They haven’t. Howell directed me to the “spending cuts’’ section of her group’s website. By far the biggest item there is a call for cutting $900 million by repealing the state’s universal health care law. No matter how one feels about that law, those dollars hardly qualify as spending that could be eliminated without consequences.

Municipal health care reform, another big-ticket item, is certainly important, but the savings would be on the local level. Some of the other ideas are worthwhile as well, but the savings aren’t remotely close to those Question 3 would require.

Although Howell touts the tax cut as a job stimulus, Associated Industries of Massachusetts, the Massachusetts High Technology Council, the Greater Boston Chamber of Commerce, and the Massachusetts Business Roundtable all oppose it. Dismissing those groups as the voices of firms that benefit from state spending, Howell says her movement represents “small businesses and small retailers who are the creators of new jobs.’’

But though the Retailers Association of Massachusetts wants the sales tax returned to 5 percent, it is staying out of this battle. “We have some members who thought it would go too far and hurt local services,’’ said president Jon Hurst.

In fact, it would hurt both state and local services. The revenue loss occasioned by Question 3 alone would require cuts of 16 percent or more in all state discretionary spending, according to an analysis by the Taxpayers Foundation. Because we already face a gap of $2 billion, the total discretionary spending cuts needed would be 28 percent.

“Question 3 would have a dramatic impact on the basic services the public has long expected from state and local governments, things like schools, higher education, human services, health care, roads and police and fire, the court system, prisons, and state parks,’’ according to Widmer.

For some voters, the trade-off may be worth it. Still, I suspect that after careful consideration, most will arrive at the conclusion that Question 3 goes too far.

But whatever their ideological inclinations, voters deserve to know the budgetary truths — and consequences.

Scot Lehigh can be reached at lehigh@globe.com.