re you for tax cuts? For improving education and health care?
All of the above?
Well, those who are trying to defeat Question 4, which would roll back the income tax rate from 5.85 percent to 5 percent, say the state cannot afford to boost spending on services while slashing revenue by $1.2 billion a year.
However, the Cellucci administration says it can implement the tax cut and still provide better services, and argues that lowering taxes will stimulate the economy and produce more revenue for the state in the long run.
A yes vote on Question 4 would gradually reduce the state's personal income tax rate from 5.85 percent to 5 percent by 2003.
A no vote would make no change in the rate.
If approved, the rate would drop to 5.6 percent next year, 5.3 in 2002, and 5 percent thereafter.
The coalition fighting Question 4 includes many groups that rely on public spending and that have reason to fear budget cuts, especially if the economy goes sour. Teachers unions and human services providers have come out strongly against the measure. The Association of Federal, State, County and Municipal Employees donated $100,000 last month to the Campaign for Massachusetts' Future, the question's lead opposition group.
For the most part, the Yes on 4 campaign is being funded and supported by business groups, although the Greater Boston and South Shore chambers of commerce, both unable to reach a concensus to support the measure, have decided to remain neutral. The Hopkinton-based EMC Corp. and its chairman, Richard Egan, donated $150,000 to the cause last month.
The Massachusetts Taxpayers Foundation, a nonpartisan group, has argued that the income tax rate should be rolled back to 5 percent, but says the reduction should be tied to the economy: If it's doing well, lower the rate a notch. If it slows, leave the rate where it is.
The last time the economy slowed, in 1989, the Legislature increased the income tax rate from 5 percent to 6.25 percent, saying the boost would be temporary. In 1992, the Legislature cut the rate to 5.95 percent and it remained there until last year, when the Legislature agreed to lower the rate gradually to 5.75 percent, which it would reach next year. It is currently at 5.85 percent.
Meanwhile, since 1992, taxpayers have received $2.3 billion in breaks. The largest came in 1998, when the Legislature doubled the personal income tax exemption from $2,200 to $4,400, saving $131 for the average person. Other recent tax cuts range from halving the rate paid on interest and dividend income, to raising the child care deduction.
According to the Cellucci administration, Question 4 would mean $451 in savings for a family of four earning the median household income of about $75,000.
But add the passage of Question 6, which would provide tax credits for tolls and auto excise taxes, and the tax cut total is about $2 billion a year, or about 10 percent of the state's annual budget.
TINA CASSIDY
