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Local Aid and Finance MTF: Question 1 would cut most state programs by 70%
Passage of the ballot question to repeal the state’s income tax would require spending cuts of more than 70 percent in almost all state programs, according to an analysis released today by the Massachusetts Taxpayers Foundation.
After accounting for five legally mandated programs, the rest of state government would bear across-the-board cuts of 71.1 percent due to the loss of state income tax revenue, according to the report, “The Enormous Consequences of Question 1.”
Local aid is among the programs that would face this level of cuts, with the exception of Chapter 70 education aid that is legally mandated. The resulting property tax increases would outweigh any income tax savings for homeowners, according to the report.
If approved by voters statewide on Nov. 4, Question 1 would halve the state income tax rate on Jan. 1, 2009 – from 5.3 percent to 2.65 percent – and eliminate it on Jan. 1, 2010, resulting in a 40 percent cut in state revenues.
Of the $31.8 billion in state spending in fiscal 2008, $12.5 billion (39 percent) is legally required, the Taxpayers Foundation reports. That means the $13.7 billion the state would lose by repealing the income tax would have to be cut from the remaining $19.3 billion of state spending – amounting to a 71.1 percent cut in these programs.
The cuts would affect the 31 state and county prisons, the entire court system, the wide range of human services programs, transportation, state parks and environmental programs, support for state and community colleges, state employee pensions and health benefits, and the Department of Revenue and Registry of Motor Vehicles, as well as many other programs and services.
All state capital spending on transportation, higher education, courts, parks, economic development and other areas would cease for the next seven years, according to the report. This loss of $20 billion in capital investments, combined with the state’s plummeting bond rating, would cause irreparable harm to the Massachusetts economy.
If the state were to lay off all 68,000 state employees, the total savings would be $5.3 billion, less than half the lost income tax revenue.
High-income taxpayers would gain most of the benefits from repealing the income tax. The average savings for those earning more than $100,000 (14 percent of taxpayers) would be $16,295, compared to $850 for those earning less than $50,000 (65 percent of taxpayers). The $3,700 savings cited by proponents of Question 1 is an average, but the benefit is heavily skewed to the wealthy.
The full report is available at www.masstaxpayers.org.
• Vote No on Question 1 Web site
• Vote Yes on Question 1 Web site
Local Aid and Finance MTF: Question 1 would cut most state programs by 70%
MTF: Question 1 would cut most state programs by 70%
Passage of the ballot question to repeal the state’s income tax would require spending cuts of more than 70 percent in almost all state programs, according to an analysis released today by the Massachusetts Taxpayers Foundation.
After accounting for five legally mandated programs, the rest of state government would bear across-the-board cuts of 71.1 percent due to the loss of state income tax revenue, according to the report, “The Enormous Consequences of Question 1.”
Local aid is among the programs that would face this level of cuts, with the exception of Chapter 70 education aid that is legally mandated. The resulting property tax increases would outweigh any income tax savings for homeowners, according to the report.
If approved by voters statewide on Nov. 4, Question 1 would halve the state income tax rate on Jan. 1, 2009 – from 5.3 percent to 2.65 percent – and eliminate it on Jan. 1, 2010, resulting in a 40 percent cut in state revenues.
Of the $31.8 billion in state spending in fiscal 2008, $12.5 billion (39 percent) is legally required, the Taxpayers Foundation reports. That means the $13.7 billion the state would lose by repealing the income tax would have to be cut from the remaining $19.3 billion of state spending – amounting to a 71.1 percent cut in these programs.
The cuts would affect the 31 state and county prisons, the entire court system, the wide range of human services programs, transportation, state parks and environmental programs, support for state and community colleges, state employee pensions and health benefits, and the Department of Revenue and Registry of Motor Vehicles, as well as many other programs and services.
All state capital spending on transportation, higher education, courts, parks, economic development and other areas would cease for the next seven years, according to the report. This loss of $20 billion in capital investments, combined with the state’s plummeting bond rating, would cause irreparable harm to the Massachusetts economy.
If the state were to lay off all 68,000 state employees, the total savings would be $5.3 billion, less than half the lost income tax revenue.
High-income taxpayers would gain most of the benefits from repealing the income tax. The average savings for those earning more than $100,000 (14 percent of taxpayers) would be $16,295, compared to $850 for those earning less than $50,000 (65 percent of taxpayers). The $3,700 savings cited by proponents of Question 1 is an average, but the benefit is heavily skewed to the wealthy.
The full report is available at www.masstaxpayers.org.
• Vote No on Question 1 Web site
• Vote Yes on Question 1 Web site
Written by MMA Publications/Web Director John Ouellette
