SENTINEL & ENTERPRISE: Editorial: Put tax-relief initiatives to the ballot test

By Editorial

This article originally ran in the Sentinel & Enterprise on August 17, 2025.

Should Massachusetts voters have a direct say in how much income tax they pay and when the state owes them refunds for surplus state revenues beyond a certain amount?

Several Massachusetts business groups believe that indeed they do.

Those organizations have gotten behind two proposed ballot initiatives that would put more money into peoples’ pockets by slicing the state income tax and returning excess revenues to taxpayers more frequently.

One proposed initiative would cut the state income tax rate from 5% to 4% by 2029. Another would lower the threshold at which the state must issue refunds from robust tax collections.

Those proposals — and many others filed by the Aug. 6 deadline — still need the attorney general’s approval and thousands of signatures before appearing on the 2026 statewide ballot.

The state’s spending is growing much faster than people’s paychecks, and cutting income taxes to 4% would save Massachusetts taxpayers much-needed cash, said Jim Stergios, executive director of the Pioneer Institute, a business-supported think tank that initiated the income-tax measure.

Tax collections from all sources totaled $43.708 billion in fiscal 2025, a 7.1% increase over fiscal 2024 and 5.1% more than the benchmark, the Department of Revenue recently announced.

That increase was driven by growth in the income surtax, capital gains tax revenues, sales and use taxes, and  “all other” taxes, which were “partially offset” by decreases in corporate and business taxes, according to DOR Commissioner Geoffrey Snyder.

The fiscal 2026 budget of $61 billion represents about a 5% hike over the previous year’s $58 billion. The state budget has grown nearly 50% in just the last seven years.The tax proposals “both aim at the same purpose, which is to get more money into people’s hands and to make sure that the government is not growing faster than the people’s capacity to support that growth,” Stergios said.

The state estimates it will accrue $24.24 billion in state income tax revenue in 2026, not counting revenue from what’s commonly known as the millionaires’ tax.

A little enforced law, 62F, enacted by a ballot measure in 1986, requires the state to distribute refunds when revenue collections exceed a predetermined cap. The state has exceeded that cap only twice since the law was enacted, most recently in 2022, when it returned nearly $3 billion to taxpayers.

The proposal, championed by the Mass Opportunity Alliance, composed of the Massachusetts High Technology Council, Pioneer Institute and the Massachusetts Competitive Partnership, would adjust the cap to allow for more frequent refunds.

And a new MOA poll of 1,007 registered Massachusetts voters conducted by research firm Big Village found substantial public support for the policies outlined in these proposals across income brackets and party lines.

Almost three-fourths of respondents support a revised revenue cap to trigger more taxpayer refunds, including 67% of those with annual household incomes under $50,000, while 75% of those polled support the income tax cut, with 77% saying it will have a positive impact on their own family’s finances.

The Massachusetts Fiscal Alliance also commended the petitioners and allied organizations advancing these reforms. Mass. Fiscal Chairman Ann Sullivan and Executive Director Paul Craney are among the original signers of the two taxpayer-friendly ballot questions. Also among the signers is Pauline Zywaski, an original board member and treasurer of Citizens for Limited Taxation (CLT).

That’s the organization that successfully backed the ballot measure that returned the state income tax to 5% in 2000 after then Gov. Mike Dukakis had temporarily raised the income tax rate to 5.75% in 1989.

But it took another 20 years for the state income tax to be brought down to 5%, as mandated by the 2000 ballot question.

Backers estimated that such an adjustment of 62F would have returned money to taxpayers 24 times since the law went into effect.

But critics say that the proposals would seriously undermine the state budget and negatively affect important services. Reducing state income tax by 1 percentage point would reduce revenues by 20%, or nearly $5 billion, said Phineas Baxandall, director of research and policy analysis at the Massachusetts Budget and Policy Center.

He called the proposal “reckless.”

Baxandall said the proposed tax cuts would primarily benefit wealthier residents while forcing the state to cut programs that benefit lower-income families.

Evan Horowitz, executive director at Tufts University’s Center for State Policy Analysis, said the change would have “huge implications” for what kinds of programs the state could afford.

“It’s going to come from everywhere, but most of what we do through state government is education and health care,” he said. “So if you’re going to cut an amount of that size, it’s going to come from schools and insurance.”

He said he has not seen convincing evidence linking taxes with migration patterns, but whatever the worry, tax rates are precisely the kind of “very fundamental democratic debate” that makes sense for the public to consider via ballot measure.

If both backers and detractors of these initiatives both agree they should be decided by direct democracy, then let’s put that theory to the test by ensuring they qualify for the 2026 statewide ballot.