Here’s the problem: The state used actual tax collections to set the ceiling only once — in fiscal 1986. For 40 years, the state has compounded that figure in an unbroken chain stretching back to 1986, never resetting the calculation to actual collections.
Because the revenue limit is protected by a “no decline” rule, wages and salaries may fall during a recession, but the revenue limit cannot. Each downturn can push the ceiling farther above actual tax collections, widening over time the gap between the revenue limit and taxpayers’ wages and salaries.
No wonder refunds are rare. Chapter 62F has triggered them just twice in 40 years. What was meant as a guardrail on government growth turned out to be little more than a speed bump.
Question 5 would end the compounding fiction. Each year, the state would start with actual tax collections and allow revenues to grow from there at the same rate as taxpayers’ wages and salaries.
This small update could have a big impact. A recent analysis by Mass Opportunity Alliance found that had the proposed changes to 62F been in place since the law’s inception, taxpayers would have received up to 20 refunds, instead of just two. Tufts University estimates that taxpayers could receive up to four times as many tax refunds over the next two decades if they approve Question 5.
This translates to real money back in taxpayers’ pockets. The Massachusetts Taxpayers Foundation found that the new formula would have triggered refunds four times in the past decade, ranging from $269 to $1,095 per tax filer. The average: $701.
That may be why a recent Mass Opportunity Alliance-commissioned poll found 73 percent of voters support the proposal to strengthen the state’s revenue growth limit. Popular support spans income brackets and political parties.
Recent history shows why a functioning guardrail matters. Since 2010, Massachusetts’ budget has grown 135 percent, from $27 billion to more than $63 billion. Taxpayers’ earnings have not grown nearly as fast. Chapter 62F was designed to make sure that growth in state tax revenues did not outpace the earnings of the people who pay for the government.
That matters because Massachusetts families are being squeezed by the cost of living and rising taxes required to support the state’s tax revenues. A Suffolk University/Boston Globe poll in June found that a majority of voters had considered leaving the state in the previous year, including one in four who seriously considered it. Among those contemplating a move, nearly 60 percent cited the cost of living or taxes as the primary reason.
The departures are more than an idle threat. People are leaving. In 2023, Massachusetts lost 30,000 residents in net and $4 billion in adjusted gross income.
The rate of business formation plummeted. Young adults have led the exodus. Only California, New York, and Illinois have had a harder time keeping residents.
It’s a vicious cycle: When states have ever-increasing bills to pay and fewer people to cover them, legislators go searching for new revenue sources (read: taxes). That causes even more residents to head for the exits. In an MOA survey of former Massachusetts residents, half said high taxes were a factor in their decision to leave.
Opponents will argue the policy is just a boon for the wealthy. It is not. The law already ensures that every taxpayer receives the same refund. This ballot question does not change that. They will also argue that this updated revenue limit will force Massachusetts to send refunds during times of economic downturns, when the state most needs revenue.
Also not true. As noted above, the law has a “no decline” rule. Historical modeling shows the proposed formula would not have triggered refunds during either the Great Recession or the COVID-19 downturn.
Faced with an affordability crisis and a state government insulated from public scrutiny, voters have sought guardrails, only to meet resistance on Beacon Hill. In 2024, they overwhelmingly authorized the state auditor to audit the Legislature; lawmakers moved to limit those audits. This year, the Supreme Judicial Court knocked an income tax cut off the November ballot.
Question 5 strengthens a commonsense guardrail. It doesn’t cut taxes, freeze revenues, or shrink state government. It restores the bargain voters struck 40 years ago: Government can grow but not faster than the wages and salaries of the people paying the bills.
