Questions, Questions, Questions

This isn't a political blog, although a number of the views expressed do enter into the political arena. However, with the Massachusetts elections a week away, I feel it is a good opportunity for progress Boston to come out with a stance on the three ballot initiatives that are being put forth this November 2.

2010 Statewide Ballot Questions

Question #1 - Repeal the state sales tax on alcoholic beverages
This question is pretty straight forward. When the legislature voted to increase the state sales tax from 5 to 6.25% last year, they also removed the exemption for alcohol. This means that consumers went from paying no tax to the full 6.25% on any beer, wine, or liquor purchased in state.

The argument for the repeal is that a tax on alcohol drives business away from local stores (particularly to New Hampshire) and that this is double taxation since there is an excise tax on alcohol. The double taxation argument is pretty light since a lot of states charge both excise and sales tax on alcohol and MA has one of the lowest excise taxes in the country. Now it is true that there are probably a few stores along the NH border that are going to be hurt by this 6.25% increase in the price of alcohol, but most consumers are more worried about convenience than driving out of their way to save a couple bucks.

I am against repealing the sales tax on alcohol and so will be voting No on Question #1. In my opinion, a sales tax is a fair, broad based way for a state to raise revenue. In MA, the tax is made less regressive by exempting necessities such as food and clothing. I fully support those exemptions. The question then becomes, is alcohol a necessity? I do not think so. Therefore, it should be taxed like other discretionary items.

Question #2 - Repeal Comprehensive Permits for Low- or Moderate-Income Housing
This is certainly the most complex of the bills and probably the least understood. The summary on the MA Elections website doesn't help a whole lot. Essentially, this bill would repeal the ability for a developer to apply for a comprehensive permit from a city or town's Zoning Board of Appeals (ZBA) if his development contains a certain percentage of low- or moderate-income units and the city or town in which he is applying for the permit does not meet a threshold of having 10% of its housing stock affordable for low- or moderate-income families. This comprehensive permit can allow a developer to bypass certain local restrictions on the plan, size, shape, materials, etc of the development by appealing to the state Housing Appeals Committee (HAC) if his permit is denied or made economically unfeasible by the ZBA. The HAC can force the ZBA to grant a permit if they feel the development is in the best interest of the town.

The argument for repeal is that these comprehensive permits allow developers to bypass the local planning process, thus changing the character of a city or town and are a windfall for developers who just want to push large projects through to make more money.

I feel that the need for working class families to be able to have the option to live where is convenient for them to access the labor market in a state where housing costs can be quite astronomical necessitates the distribution of affordable housing across the state. This statute takes a market based approach by providing an incentive for developers to include affordable units in their developments and increases these affordable units, particularly in communities that would tend to prevent them from being built. I do not know of a better alternative to the affordable housing crisis in MA and therefore will be voting No on Question 2 against the repeal of the affordable housing law.

Question #3 - Reduce the State Sales Tax to 3%
As mentioned previously, the legislature, facing a financial crisis, voted to raise the state sales tax from 5 to 6.25%. This question seeks to reduce that rate below the previous rate to 3%.

The argument for the decrease is that charging a lower sales tax will put more money back in citizens' pockets and allow them to spend it and thus help out the economy. Additionally, by taking away a portion of the state's revenues, it would force state government to be more efficient and cut out wasteful spending.

Everyone wants state government to be more efficient. However, this is not the way to do it and I will be voting No on Question 3. MA's annual state budget is about $32 billion. Approximately half of the budget is legally untouchable by the legislature, going to debt payments, medical care for the poor, and pensions. Reducing the sales tax would take away approximately $2.5 billion in revenue which would have to be cut from the remaining $17 billion. With a structural deficit already looming for next year, that is simply too much money to take away. It would lead to massive across the board cuts that would cripple the ability of the state to invest in programs that can lead to a better future for MA. Better state government will come from increased transparency and participation on the part of voters. As I mentioned above, the sales tax is a broad, relatively fair way for a state to raise revenue. MA's sales tax is not significantly above that of other states. Realizing an equitable, sustainable future will require MA to invest in renewable energy, public transportation, and education in a way that a $2.5 billion cut in revenues will simply not allow.