I got a lot of responses to my post from the other day about the pending ballot initiative to eliminate the State income tax, which was sponsored by former Libertarian candidate for Governor, Carla Howell. Both were along the same lines:
1) That ‘opponents are using scare tactics to convince people to vote against Question 1,’ and
2) The disingenuous claim that ‘we don’t know what the impact will be, and anyone who says we do is lying and trying to scare you’ (see item #1)
In that vein, “ncitizen” wrote that “No official statement has been made by the legislature that states where if any cuts will be made. It would make life easier for both sides if they did then we could argue the merits of the cut.”
Of course, the fact that the state hasn’t spelled out exactly what cuts it would make hardly means that elected leaders are scaremongering. If someone came along and told you that you were going to lose 40% of your income next year, you might not be able to say exactly how you’d tighten your belt, but you’d be able to paint a picture in broad strokes, which is where we are now and what we’re hearing from our elected leaders and other stakeholders (Chamber of Commerce, teacher and transportation unions, public health experts, librarians and legislators).
A chorus of warnings
In the meantime, lots of groups have come out with very detailed pictures of how the state might be forced to act should this ballot initiative pass. The Massachusetts Taxpayers Foundation (headed by our own Town Moderator, Mike Widmer) is just the latest. Their report concludes that passage of Question 1 would be a disaster for the state and its citizens. Then there’s the Massachusetts Budget and Policy Center, which has designed an interactive Question 1 Budget Game that lets you try your hand at eliminating 40% of the state budget without slashing existing programs like healthcare, education, and local aid.
As fed matching funds leave the State, a vicious cycle of cutting
One of the interesting revelations of the budget game is what a vicious spiral we would find ourselves in, were Question 1 to pass. Why? Because so much of the federal aid we receive is contingent on the level of state aid. For example, the Department of Early Education and Care (EEC) receives $590m in combined state and federal aid. Just so’s you know, this is money that’s used to provide child care subsidies for 69,000 low-income children and fund a Universal Preschool program that sustains 502 pre-school programs and 8,500 low-income children. Even if the Patrick Administration were to try to zero out EEC’s budget in a post-Question 1 world, it would only save the state $137 million, not $600 million. Why? Because as we cut state aid, we’d lose federal matching dollars as well. In other words, as we slashed programs to try to shrink our budget, we’d also watch federal dollars being sucked out of state and back to Washington D.C., in response to our lack of good faith, leaving Massachusetts poorer and more desperate than ever.
In search of hard numbers for Belmont
Always open minded, though, I went looking for some details on what Question 1 would mean specifically for Belmont. I spent some time perusing both the Vote No on 1Web site and the Vote Yes on 1site. To be honest, the differences between the two sites are enormous. The Yes folks at smallgovernmentact.org offer mostly fact-free, rhetorical arguments in favor. They score some good hits on their favorite strawman: profligate Beacon Hill lawmakers and bureaucrats, but anyone looking for a well researched, factual argument for how, exactly, eliminating our state’s progressive income tax will spur our economy and create jobs will be disappointed. Their argument boils down to this:
1) You’ll get $3,700 back! Woo hoo! (You’ll do even better if you’re rich!).
2) You’ll take $12 Billion out of the hands of Massachusetts Big Government. Woo hoo!
3) Those arrogant SOBs on Beacon Hill will finally have to listen to us! Woo hoo!
The “No” side has a much more detailed look at what the practical impact of Question 1 passing will be and what, exactly, it will mean for the State and for Belmont. Using Mass Dept. of Revenue figures, opponents of the measure estimate that Question 1 passing will result in a loss of more than $11m. (You can read about their methodology here.) Their estimates look like this:
| Municipal | State Aid | Estimated Cut | Percent |
| Public safety and other aid | $3,150,524 | $2,039,166 | 65% |
| Road/bridge construction and repair | $401,161 | $259,650 | 65% |
| TOTAL | $3,551,685 | $2,298,816 | 65% |
| School district: Belmont | |||
| General education aid (Chapter 70) | $4,603,815 | $4,603,815 | 100% |
| Special education | $857,481 | $555,002 | 65% |
| School construction and repair | $537,455 | $347,866 | 65% |
| Other aid, including grants (est.) | $700,764 | $445,388 | 64% |
| TOTAL (est.) | $6,699,515 | $5,952,071 | 89% |
In short, this would be a disaster for Belmont, making contentious budget debates in years past over $1m or $3m gaps pale by comparison. Its no stretch to say that our town would have to come up with an entirely new mechanism for funding its operations and schools. And remember, Question 1 says nothing at all about Prop 2 1/2, so any increase in property taxes would have to come by way of a Prop 2 1/2 override — with all the hew and cry that accompanies those. I see no reason to believe, either, that town voters will feel generous about passing local property tax overrides just because the burden of paying state income taxes has been lifted — we need only look to New Hampshire as an example.
In the past two weeks, we’ve seen what comes of clever tricks and too good to be true promises from the financial elites on Wall Street. Let’s not fall for it again. This is no time for gimmicks, or to toy with the educations and future of our children. No on One!