A ballot proposal that would reduce Massachusetts’ state income tax rate from 5% to 4% has pitted business coalitions against union leaders and Democratic lawmakers, with both sides projecting sharply different consequences for the state’s roughly $61 billion budget. The measure remains before the Joint Committee on Initiative Petitions and has not been certified for the November ballot.
House Speaker Ron Mariano said raising other taxes is a possibility if voters approve the question, but recently indicated he is open to negotiating a compromise with the committee that organized it. The committee said it is open to that idea.
Independent analysts estimate full implementation would cost the state between $5.1 billion and $5.4 billion in annual revenue — a reduction opponents warn is untenable as potential federal funding cuts add new pressure to state programs. Supporters counter that lower taxes would curb outmigration and stimulate enough economic growth to offset much of the revenue decline.
What the tax cut would cost
The Massachusetts Taxpayers Foundation estimates the cut would result in a $5.4 billion annual revenue loss. Foundation president Doug Howgate said that is a static analysis and does not account for changes in economic activity.
Using a dynamic model, Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University, projected the cut would cost the state $5.1 billion per year beginning in fiscal 2030. His analysis found that figure would more than offset the revenue gains from the millionaires tax, which raised $3 billion in fiscal year 2025. The state income tax raised $26.7 billion in fiscal year 2025.
Mass Opportunity Alliance, the business coalition backing the question, disputes those projections. The group estimates the state would lose about $2.2 billion over three years but projects a $500 million revenue increase by fiscal 2030, arguing that reduced taxes would stimulate broader economic activity. Horowitz described the group’s $2.2 billion figure as “interested advocacy” rather than a “modeling or statistical disagreement,” but said the question is an appropriate one for voters to weigh.
Who would benefit
Supporters and opponents also disagree on how the savings would be distributed.
Rebekah Paxton, a consultant for Mass Opportunity Alliance, said the average resident would save $1,300 annually and the median household would save $1,100. Andrew Farnitano, spokesperson for the union-backed organization Raise Up Massachusetts, said the bottom 80% of taxpayers would see an average cut of $534 per year, roughly $10 per week. Horowitz’s analysis found a $37,352 gap between the savings of the richest and poorest residents.
Supporters’ case
Chris Keohan, spokesperson and consultant for the Taxpayers for an Affordable Massachusetts ballot committee, argued the cut addresses a demographic and affordability emergency. “Yes, we’re No. 1 in education. Yes, we’re a safe state,” Keohan said. “But what does it tell you if we’re losing people to states that are less safe, that have less level of education? It tells you that we’re at a breaking point and something absolutely has to be done.”
Jim Stergios, executive director of the Pioneer Institute, pointed to North Carolina as a model. According to a Pioneer report, North Carolina reduced its individual and corporate tax rates from 2014 to 2025; North Carolina added 448,900 private-sector jobs between 2020 and 2025, while Massachusetts lost 18,000 over the same period. Stergios said migration to North Carolina is not solely due to lower taxes — the state has long had lower energy and housing costs — but described taxes as a significant factor.
Proponents also argue the cut would benefit small businesses. They note that over 140,000 Massachusetts businesses are taxed as pass-through entities whose income is reported as personal income, and said their analysis found the rate reduction would create between 43,000 and 48,000 new jobs.
A February poll of 670 Massachusetts voters conducted by the University of New Hampshire Survey Center found 58% in support, 21% opposed and 21% neutral or unsure.
Lawmakers and unions push back
Several New Bedford-area Democratic legislators said they oppose the measure.
Rep. Mark Sylvia, D-Fairhaven, said the cut would have “a catastrophic impact” on the budget, particularly given federal funding reductions. Rep. Christopher Hendricks, D-New Bedford, said the cut would be “disastrous,” as the state is already operating on a small budget. Rep. Christopher Markey, D-Dartmouth, said he is “not a fan” of the proposal because it could put public services at risk.
“We don’t know what’s going to happen with federal reimbursements to programs that have always been in existence,” Markey said. “To keep our environment clean, keep our schools number one in the country — all of those things matter. Maybe we’ve taken some of the stuff for granted, and we don’t realize that there’s a cost to all of these things, but I do think that we have a pretty good balance right now.”
Rep. Steven Ouellette, D-Westport, said he is concerned about cuts to school budgets in his district. “The funds not only help the communities as a whole, it adds to the economic engine that we are trying to expand,” Ouellette said in a written statement.
Dave Foley, president of SEIU Local 509, said in a statement that corporate backers of the ballot question would not be the ones facing its consequences. “Those consequences will fall squarely on working people: the anxious parent being pushed out of the workforce because their access to childcare is limited, or the direct care worker who has to look a client in the eye and tell them the program they depend on is closing,” Foley said.
Deb Pimental, executive strategist for the Coalition for Social Justice, said the measure would put safety-net programs at risk, including MassHealth coverage, food assistance, fuel assistance and childcare vouchers. “It jeopardizes our safety net for working families and people on fixed incomes,” Pimental said.
Raise Up Massachusetts has called on companies to resign from the Massachusetts High Technology Council and the Massachusetts Competitive Partnership because of those organizations’ support for the ballot question. Farnitano said those calls to action are working, citing reporting that some business leaders are now opposing or expressing concern about the measure.
What comes next
Rep. Antonio F.D. Cabral, D-New Bedford, said he has not taken a stance because the measure is still in committee. “Until the committee acts, we’re not sure if it will be on the ballot,” Cabral said. “So we have to see how that process moves forward.”
Horowitz said that however the debate unfolds, the question is an appropriate one for voters. “This is exactly the kind of question that belongs on the ballot,” Horowitz said. “The debate has to happen honestly, and we need to be clear and honest about the implications of going from 5% to 4%. But once we are, it’s totally reasonable to say to voters, ‘What do you think?’”