Survey: Mass. residents support tax cuts, tax credits

Massachusetts residents favor a cut in the state income tax rate, the return of state budget surpluses to individual taxpayers and a $200 state tax credit for charitable contributions to human-service organizations that help the poor. These are results of the Beacon Hill Institute's first State of the Household survey.

The survey also shows that residents oppose subsidizing improvements in and around Foxboro Stadium, home of the New England Patriots. By a slight margin, they prefer toll-free roads and bridges Üexpressing limited support for a proposed initiative to remove tolls from the Massachusetts Turnpike and other roads.

As a whole, the results of the survey, conducted with the assistance of Commonwealth Consulting from October 4-8, 1997, suggest that Massachusetts residents are more "market-oriented" and have less confidence in the ability of government to solve problems than their reputation might suggest.

The dissent of the governed

As Henry Ward Beecher observed in 1887, "Public sentiment is to public officers what water is to the wheel of the mill." In 1997, Beecher's dictum still rings true. Elected officials are moved by public opinion.

However, the BHI survey suggests that state legislators are ignoring majority opinion at least as it relates to the issue of taxes. The survey revealed that Massachusetts residents favor a proposed reduction in the state earned income tax rate from 5.95% to 5% by more than a 4-to-1 margin.

The poll was conducted just weeks after Governor Paul Cellucci offered the Massachusetts legislature a proposal that would phase in the tax cut over three years. The proposal is currently stalled in the legislature.

Some lawmakers have argued against the tax cut on the grounds that an economic downturn could cause a slowdown in revenue growth. The full question pointed out this concern: "...people opposed say that the state may need the money in the future when times are not so good." However, the respondents appear to be less influenced by this worry than they are by evidence that the proposed tax cut would exert a powerful stimulus to the economy. A BHI study released in September showed that the tax cut would add 105,000 new jobs, increase payrolls by almost $5 billion and increase capital spending by $21 billion.

The results of the survey suggest that Massachusetts residents are more "market-oriented" and have less confidence in the ability of government to solve problems than their reputation might suggest.

Tax credits for the poor also supported For more than two years, the Beacon Hill Institute has been at the forefront nationally on a proposal to implement tax credits to replace the current welfare delivery system. Under the plan, taxpayers would be able to take a limited credit against their federal or state tax bill if they contributed to qualified human-service agencies that help people off the welfare rolls. According to the BHI survey, 81% of the residents asked supported a plan that would allow state taxpayers to deduct up to $200 from their tax liability "if they gave an amount up to $200 to a private charity that helps the poor." This is consistent with our finding (see NewsLink, Winter 1997) that nonprofit human-service agencies would welcome a tax credit of this kind. The idea drew support from every segment of the population.

Toll sentiment a virtual split

When Massachusetts residents were asked if they would support a proposal that would remove all tolls from the state's roads, bridges and tunnels, a small majority said "yes." Fifty-two percent of those surveyed favored removing the tolls.

One reason why the margin of approval was so small could be the substantial opposition from the western part of the state. Western area residents, who have already seen tolls on the turnpike removed, might believe they would not benefit from the removal of the tolls across the state. Fifty-four percent of the respondents from the 413 area code oppose removing the tolls, while more than 54% of the respondents in the 617 and 508 area codes favor removing them.

Support for toll removal is fairly consistent among all income groups and reflects almost identically the ambivalence of the general population surveyed.

Only a minority supports Patriots plans

By a two-to-one margin, Massachusetts residents oppose a state proposal to finance "infrastructure" and other improvements intended to keep the Patriots in Massachusetts. According to the poll, 63% oppose the proposal, 30% are in favor, and 7% have no opinion or donêt know.

Recently voters in Pittsburgh rejected a half-cent hike in the sales tax to build a new stadium for the Pittsburgh Pirates and Steelers. In Minneapolis, the public added another hurdle to sports boosters by requiring that any stadium plan be placed before a public referendum.

Following widespread press coverage of the BHI poll, the Massachusetts House of Representatives substantially trimmed the subsidy contained in the original proposal. The legislature suspended further consideration until next January.

Surplus should go to taxpayers

Massachusetts ran a surplus of $800 million in fiscal year 1997. The BHI survey found that a plurality of voters (34%) would like to see the state surplus refunded to the taxpayers. Only 12% want to see the money put in a rainy-day fund, a long-standing prerogative of the state legislature (which last year raised the threshold amount for the fund before money can be returned). And despite questions about the Big Dig project, only 11% favored using the money for building and construction projects.

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