As the primary campaign nears its end, three gubernatorial candidates are calling for a rollback of the Massachusetts income tax — a policy some leading financial experts say is fiscally unsound.
Two candidates — Lt. Gov. Kerry Healey, a Republican, and Attorney General Thomas Reilly, a Democrat — support an immediate rollback of the income tax from 5.3 percent to 5 percent.
Reilly’s economic plan calls for “tax relief for individuals and small businesses by reducing the income tax rate to 5 percent,” according to Reilly’s campaign website.
If elected, Healey plans to lower the income tax immediately to 5 percent, and pledges that it will not be raised afterwards.
“Voters need to understand I’m the only candidate in this race who has committed publicly and pledged not to raise taxes,” Healey said in a Sept. 4 Boston Globe article.
The other Democratic candidates take different positions on the issue, including Deval Patrick, who opposes a rollback of the tax entirely.
“Until we have rebuilt our local infrastructure, a further rollback of the income tax in the current circumstances would be fiscally irresponsible,” Patrick said in his April 19 campaign report Fiscal Responsibility: Streamlining Government Spending.
Democratic candidate Chris Gabrieli favors a plan that would gradually decrease the tax by allocating a portion of the state’s tax revenue growth to these efforts.
Dan Cence, a press secretary for the Gabrieli campaign, said Gabrieli’s plan to lower the income tax gradually to 5 percent is necessary “not only because the voters of Massachusetts voted for it,” but also because “the cost of living here has skyrocketed, and people need a break.”
According to Cence, Gabrieli’s plan works “only through economic growth.”
Michael Widmer, executive director of the Massachusetts Taxpayers Foundation, said a gradual plan like Gabrieli’s proposal would reduce pressure on other government programs.
“The notion of tying the income tax reduction to economic triggers is something that we have supported for years,” Widmer said, adding that the income tax rollback is a matter of choices.
“The loss of 700 million dollars of annual revenues will require difficult choices for policy makers about where that money’s coming from,” he added.
However, lowering the tax would mean there would be less money coming into the state treasury.
“If we drop the income tax to 5 percent, that will be less money to give to cities and towns and provide relief for the property taxes,” Widmer said. “There’s no free lunch here.”
An immediate rollback of the income tax, according to Widmer, comes with no guarantees of future economic security
“If you cut taxes on a strict calendar schedule, you may find yourself cutting taxes at the same moment you’re in a difficult economic situation,” Widmer said.
Fred Bayles, professor at Boston University’s College of Communication and director of the Boston State House Program, said previous support for the tax cuts has been thwarted by the state legislature.
“The Legislature has resisted all attempts to roll back the tax to 5 percent, turning aside efforts by voters, Gov. Mitt Romney and the Republican minority,” Bayles said. “That position is not going to change because the Legislature is not going to change — at least not this two-year election cycle.”
Bayles called the debate over the lowering of the tax “more political than substantial,” adding that the candidate elected governor will need the support of the Legislature to change the current tax, regardless of their plan.
“Voters can choose a candidate that matches their position on taxes: cut them, keep them, reduce them based on state revenue formulas,” Bayles said. “But whoever they vote for probably won’t be able to effect change.”