If two major initiatives to reduce state taxes on the
November ballot both pass, Massachusetts will lose about $2 billion in revenue and be forced to slash spending on education
and social services, a nonpartisan fiscal watchdog group said yesterday.
The Massachusetts Taxpayers Foundation, which released
yesterday's analysis, said the state could afford to enact Question 4, Governor Paul Cellucci's initiative to roll back
the income tax rate over three years, if revenues continue to grow and lawmakers restrain spending.
But the business-backed foundation advised against approval
of Question 6, the Free the Pike initiative, which would reduce residents' income taxes by the amount they spend on highway
tolls and excise taxes.
"While most of the public debate has focused on Question 4,
the outcome of Question 6 will be critical," foundation President Michael J. Widmer said.
Unlike the governor's tax rollback, which would reduce the
income tax to 5 percent, from 5.85, by 2004, the Free the Pike initiative would take effect Jan. 1. The foundation estimated
the rollback would reduce annual tax revenues by $1.4 billion when fully phased in.
Widmer also said if Question 6 passed, the state would lose
$700 million in revenue. But Question 6 proponents disagreed, estimating the annual loss at $400 million.
With the economy booming, a low unemployment rate and
growing state revenue, Free the Pike Coalition spokesman Harold Hubschman said: "If we can't afford to cut people's tolls and
auto excise taxes now, when can we afford to cut them?"