Massachusetts No Sales Tax for Alcohol Initiative, Question 1 (2010)

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The No Sales Tax for Alcohol Question, also known as Question 1, was on the November 2, 2010 ballot in Massachusetts as an indirect initiated state statute, where it was approved.Approveda The measure asked voters whether or not to repeal a sales tax for alcohol sales. Liquor retailers in Massachusetts indicated in late July 2009 that they were going to try to qualify the ballot measure for the 2010 ballot after the Massachusetts State Legislature increased the sales tax in the state from 5% to 6.25% and eliminated an exemption for alcohol sold in liquor stores.[1][2][3]

State legislators in favor of the new sales tax on alcohol sold in liquor stores stated that it would result in about $80 million in new state revenue.

The Massachusetts Package Stores Association disagreed, believing the figure would be closer to $50 million. The liquor association opposed the new sales tax on alcohol because they believed it would cost an estimated 3,000 people their jobs because it would cause alcohol sales to plunge.[4][5]

Aftermath

According to reports, in the first month of the repeal, sales in alcohol stores increased, specifically on the border between Rhode Island and Massachusetts. Judi Crisileo, who owns Franklin Wine and Spirits, estimated that business increased 5 to 10 percent at the store, which was about 5 miles from the Rhode Island border. "We've definitely seen an increase in business, and repeat people are more happy they're no longer paying the tax." However, on the other side of the issue, according to Charlie Bacon II, manager at Bacon's Wine and Spirits stated, "It's been a little boost in sales, but I wouldn't say it was anything significant. It's more or less local people. I do have some Rhode Islanders, but I don't feel that was much of a lost market."[6]

Election results

See also: 2010 ballot measure election results

Official results follow:

Question 1 (Alcohol Sales Tax)
ResultVotesPercentage
Approveda Yes 1,147,374 52%
No1,061,40648%

Results via Massachusetts Elections Division.

Text of measure

Summary

The summary of the measure read:[7]

This proposed law would remove the Massachusetts sales tax on alcoholic beverages and alcohol, where the sale of such beverages and alcohol or their importation into the state is already subject to a separate excise tax under state law. The proposed law would take effect on January 1, 2011.

A YES VOTE would remove the state sales tax on alcoholic beverages and alcohol where their sale or importation into the state is subject to an excise tax under state law.

A NO VOTE would make no change in the state sales tax on alcoholic beverages and alcohol.

Support

Supporters

  • The Vote Yes on One Committee was the main campaign for the measure.[8]
  • John Harrington, owner of Harrington Liquors in Chelmsford, stated why he was for the measure: "I have owned my shop for 63 years, and I have never seen business so bad. I cut my hours to compensate for the lost revenue. Some owners are forced to make layoffs. In this economy, now is not the time to increase the number of unemployed.On behalf of package stores across the commonwealth, please join me and small business owners to repeal the alcohol sales tax by voting yes on Question 1. Now is not the time to be taxing our community."[9]
  • State Representative Barry Finegold stated about the alcohol tax, "This is essentially a tax on a tax, which needs to be removed."[10]

Arguments

  • Liquor retailers in the state argued that the 6.25 percent sales tax on alcohol was making sales decline, as they argude that more people headed to New Hampshire to buy their alcohol, since that state was tax-free. According to retailers, liquor sales in Massachusetts declined from 10 to 40 percent in the past year.[11]
  • Ron Maloney, vice president of the Massachusetts Package Store Association stated that the sales of his liquor store were negatively impacted by the new alcohol tax. He also stated that vendors at the border between the state and New Hampshire probably had it worse, since New Hampshire did have implement a tax. Maloney argued, "People have realized that they're paying a double tax, and they're not happy about it. Forty to nearly 50 percent of what you pay for a bottle of alcohol is tax. I remember some guys throwing some tea into the harbor over just such an issue."[12]
  • Frank Anzalotti of the Committee to Repeal the Alcohol Sales Tax, stated, "This ballot question repeals the 6.25 percent sales tax on beer, wine and liquor imposed last year. Massachusetts’ consumers have always paid a substantial excise tax on alcohol purchases. However, before last year, Massachusetts had no sales tax on the purchase of alcohol. The new sales tax should be repealed because it is an unfair “double tax;” a sales tax on top of an excise tax. The new sales tax has hurt small business owners who sell alcohol, particularly near New Hampshire, which has no sales tax on alcohol. Business has declined substantially for many of those stores."[8]

Opposition

Opponents

  • "The Committee Against Repeal of Alcohol Tax" was the main opponent of the measure. The group was supported by over 90 nonprofit organizations that served state residents that needed addiction services. The organizations that supported this group stated that alcohol did not deserve a tax exemption, because it was not an everyday necessity.[12]
  • Senator Steven Tolman was against the measure, stating that the revenue from the tax was used on important programs such as addiction recovery and family support. According to Tolman, "It’s a stupid vote, to vote to repeal the sales tax. [The tax] ensures accountability in the recovery system, so that people who are sick will be able to get help when they are in need.”[13]
  • The Committee Against the Repeal of the Alcohol Tax was a coalition of more than 140 organizations.
  • State hospitals, insurers and community health centers opposed to the ballot measure. The groups were all part of the Massachusetts Hospital Association, who stated that the repeal of the tax would result in decreased funds for substance abuse prevention programs.[14]
  • Acia Adams-Heath and Symone Crawford, board members of the Massachusetts Affordable Housing Allliance, advised voters in an editorial to vote against all three measures on the 2010 ballot. They wrote, "Most voters know about the race for Governor. And many of us have heard or read something about other races. But how many of us know about the three ballot questions that threaten our communities? They may be flying under the radar but they are, perhaps, the three most important votes we will take this November. Fortunately, there is a simple way to remember how to vote on each question – “Just Say No!”"[15]
  • State Representative Harriett Stanley stated, "Sin taxes should go toward solving some of the problems that the 'sins' cause."[10]
  • State Representative Alice Wolf came out against the measure, claiming, "Exemptions should be limited to necessities like food and clothing, not an item like alcohol, which we would just as soon make a little less accessible--especially to teens."[16]

Arguments

  • A column written by Renée Loth and published in The Boston Globe argued that the tax on alcohol was useful for funding of endeavors that related to the issue of alcohol. According to the column, "recovery high schools" in the state received funding from the tax and would be difficult to operate without it. A recovery school was one of many facilities that acted as substance abuse counseling, educational, and treatment programs. The tax brought in $93 million in the current fiscal year and that helped these operations, according to the column.[17]
  • The New Bedford Standard-Times supported a 'no' vote on question 1, writing that to cut the tax, “isn’t the fiscally conservative thing to do; it’s the uninformed thing to do.” The editorial stated: “The Standard-Times supported the [alcohol] tax for its ability to make a positive impact on public health and because excise taxes on alcohol have not kept pace with inflation. The excise on beer, for example, is worth just 27 percent of its value in 1975, costing the state $200 million a year.” [18]
  • Arguments against the measure, and Question 3, in an editorial by Katie Robey, member of the Marlborough School Committee and president of the Massachusetts Association of School Committees, included the following: "As we pull out of the worst economic downturn since the 1930s, citizens must consider the risks of undercutting education, public safety, health care, infrastructure needs, and long term recovery by such a foolish and risky pair of ballot questions. It represents no false alarm to say that the loss of billions of dollars from sales tax revenues will mean sharp cuts to local aid and municipal and regional services. Those are services that your communities deliver every day."[19]
  • Vic DiGravio, Treasurer for Committee Against Repeal of the Alcohol Tax, stated, "Alcohol is not a necessity and does not deserve a special tax exemption. If anything should be taxed, products like cigarettes and alcohol should be. Massachusetts has some of the highest rates of alcohol and drug abuse in the country-the last thing we need is to take money away from prevention and treatment services to make alcohol more accessible. The alcohol tax saves lives by reducing teen drinking and funding treatment services to help people beat addictions and get their lives back on track."[20]

Campaigning, rallies and events

  • The "No Special Tax Breaks for Alcohol" campaign held a rally on September 30, 2010 that included speakers such as legislators and other advocates of the measure. Also highlighting the event were four comedians from Boston: Jimmy Tingle, Steve Sweeney, Lenny Clarke and Johnny Pizzi. The rally was attended by approximately 300 people at Florian Hall in Boston's neighborhood of Dorchester. Organizers stated that alcohol tax would create revenue that would help maintain services for people who had addictions to alcohol. Other negative impacts, opponents said, would be the worsening of the crisis surrounding the state budget and the deterioration of recovery services across the state.[12]

Other perspectives

  • Jon Chesto, a columnist for Mass. Market, who also was undecided about the measure, stated some facts about the alcohol sales tax and the sales of alcohol in the state during the first two months of the 2010 fiscal year, which were July and August. According to Chesto and his research from the Department of Revenue spokesman Bob Bliss, the amount of excise taxes collected through the alcohol sales in the state amounted to $14.1 million in the first two months of the fiscal year. Chesto pointed out that the amount was an approximate 4 percent increase from those same months in the previous fiscal year, which amounted to $13.6 million.[21]
Including both sides of the argument in the column, Chesto gave two warnings about that statistic as well. He stated, "First, it’s worth noting that the sales tax on alcohol (which is now being placed on top of the excise tax, a tax that consumers don’t typically see but does affect prices) went into effect on Aug. 1 last year. So it’s possible that new tax caused a drop-off in sales in the second half of the July-August period a year ago, making it easier for an increase this year."
Chesto also noted that the increase in the excise tax didn't reflect trading down from consumers who chose cheap wines due to the tax or their finances.

Campaign contributions

Support

The following is the sum of contributions made to the campaign in opposition to the measure:[22]

Contributor Amount
Vote Yes on One Committee $2,908,171

Opposition

The following is the sum of contributions made to the campaign in opposition to the measure:[23]

Contributor Amount
Committee Against Repeal of the Alcohol Tax $197,072.36

  • As of September 15, 2010, neither campaign on the measure spent money on marketing and advertising. The September 15 date marked the most recent filing date for ballot question budgets, according to reports.[24]

Analysis and studies

The non-partisan Massachusetts Taxpayers Foundation declared that the state budget gap for the fiscal year 2012 would be $5 billion if the measure, and the sales tax cutback relief question passed in the November election. Micheal Widmer, president of the organization stated that his group did not have an outright position on the ballot questions, but that the two tax cuts would be an "utter disaster" relating to the budget, due to a removal of $2.5 billion a year from the tax base if they were enacted. Michael Widmer, "We’ve got this huge structural deficit in fiscal 2012 even if the ballot questions aren’t approved by the voters. If they are, it’s a $5 billion hole."[25]

Media endorsements

See also Endorsements of Massachusetts ballot measures, 2010

Support

  • The Worcester Telegram and Gazette urged voters to pass the amendment in an editorial, stating, "...dropping the alcohol sales tax is likely to increase in-state sales, and the corresponding flow of excise revenues. That will mean more money available for addiction services, without prompting consumers to cross state lines and without making life that much more difficult for Massachusetts package store owners and other businesses. Vote “yes” on Question 1 on Nov. 2."[26]

Opposition

  • Open Media Boston stated its opposition to the measure, and the two other measures slated to appear on the 2010 general election ballot in the state. The editorial, written by editor and publisher of OMB, Jason Pramas, stated, "To sum up, Open Media Boston says vote "No, No, and No" on Massachusetts Ballot Questions 1, 2, and 3. As ever, if viewers have something to say about that position - our comments section is open." For more of the editorial's arguments on each ballot question, click here.
  • The Register in Yarmouth recommended a 'no' vote on the measure, stating, "It’s important, we believe, for society to come to the aid of those among us who need drug and alcohol addiction prevention, counseling and treatment services. That’s where the money goes, and where it needs to keep going. Vote “no” on Question 1."[27]
  • The Massachusetts Daily Collegian was against the measure, as well as the two other ballot measures on the ballot. The publication wrote, "With Massachusetts in precarious financial straits, we need all of the revenue we can pump into social services. While it might be nice to have a few extra pennies in our pockets and purses, what we would lose if we pass these three questions vastly outweighs the few cents per dollar we would get back."[28]
  • The Sun Chronicle was against the measure, as well as the other two ballot measures on the ballot, writing, "Massachusetts voters face three questions on the ballot on Nov. 2. Question 1 would remove the sales tax on alcohol, 2 would repeal Chapter 40B - alternately called the affordable housing law or anti-snob zoning law - and 3 would roll back the sales tax to 3 percent. The state would be best served by votes of No on each question."[29]
  • The Tufts Daily, the independent student newspaper of Tufts University, recommended a 'no' vote on the measure. The publication stated, "While passage of the referendum would most likely lead liquor store owners and binge-drinking college students across the state to rejoice at the opportunity to sell and buy even cheaper Natty Light and Rubinoff, passing Question 1 is a bad idea."[30]
  • The South Coast Today argued that voters should reject all three measures on the 2010 ballot, stating, "The interests of Massachusetts residents will be served best by a "no" vote on all three ballot questions on Tuesday."[31]
  • The Republican published an editorial against the measure, stating, "The tax provides dedicated funding to substance abuse prevention and treatment programs. Not only do these programs help people turn their lives around, they employ thousands of workers across the Bay State. We urge a “no” vote on Question. 1"[32]

Polls

See also: Polls, 2010 ballot measures
  • A statewide survey, conducted by Suffolk University and News 7 in Massachusetts, showed close races between the two tax questions, this measure and the tax rollback measure, that was on the ballot. The margin of error was plus or minus 4.4 percent. The results of the poll are as follows:[33]
  • Another poll conducted by Anderson Opinion Research of Boston showed a seeming opposition to the measure. According to the poll, the question presented asked that if the election was today, would they vote yes or no. The poll asked 450 residents who were likely to vote in the election and had a 4.5 percent margin of error. Results were released on June 8, 2010.[34]
  • A similar poll was conducted by Suffolk University and News 7, asking whether voters supported or opposed the measure, which showed a closer conclusion of results. The margin of error for the poll was 4.4 percent. Results of the poll were released on May 25, 2010[35]
  • In another poll, called the State House News Service Poll, the majority voters surveyed stated that they were against the measure. The poll was conducted by KRC/Communications between August 29-31, 2010.[36]
Legend

     Position is ahead and at or over 50%     Position is ahead or tied, but under 50%

Date of Poll Pollster In favor Opposed Undecided Number polled
Feb. 21-24, 2010 Suffolk University/7News 54% 39% 7% 500
May 3-5, 2010 Anderson Opinion Research of Boston 58% 36% 6% 450
May 20-23, 2010 Suffolk University/7News 48% 43% 9% 500
August 29-31, 2010 KCR/Communications 38% 60% 2% 400

Path to the ballot

See also: Massachusetts signature requirements and 2010 ballot measure petition signature costs

The initiative's supporters believed their efforts cleared the signature gathering hurdle on November 18, 2009, gathering and submitting approximately 115,000 voter signatures Signatures were submitted to all local city and town clerks in the state. The initiative was reviewed by the Massachusetts Legislature. Since the Massachusetts Legislature did not approve of the initiative by the May 4, 2010 deadline, petition organizers had to obtain signatures from about 1/2 of 1% of voters who voted in the last governor election and submit them before or on July 7, 2010. According to the Massachusetts Secretary of State's office, that number amounted to 11,099 signatures. Sponsors turned in enough signatures for the ballot, therefore allowing voters to decide on the measure.[37] [38]

See also

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External links

Additional reading

Support

References

  1. The Boston Globe,"Senate approves sales tax hike," May 20, 2009
  2. Sabrix,"Sales Tax Increase Passes House in Massachusetts - Governor Promises Veto," April 29, 2009
  3. Wicked Local, "Massachusetts ballot questions announced by secretary of state", July 15, 2010
  4. The Herald News,"Liquor stores bracing for new tax rules," July 29, 2009
  5. The Boston Globe,"Package stores may ask voters to shield alcohol from sales tax," July 30, 2009
  6. The Metro West Daily News, "Repeal of alcohol sales tax spurs sales", January 31, 2011
  7. The Salem News, "Election overview: What's on the ballot statewide", August 17, 2010
  8. 8.0 8.1 Taunton Gazette, "Q&A: Opposing arguments on a few of this year's state ballot questions", October 12, 2010
  9. Wicked Local, "YES: Sales tax on alcohol hurts small businesses, consumers", October 7, 2010
  10. 10.0 10.1 Eagle Tribune, "Positions vary on ballot questions", October 11, 2010
  11. Daily News, "Tax holiday not enough, say some liquor stores", August 12, 2010
  12. 12.0 12.1 12.2 Metro West Daily News, "Ballot Question 1: Alcohol sales tax needed or redundant?", September 26, 2010
  13. The Harvard Crimson, "Mass. Senate To Vote to Repeal Alcohol Tax", September 21, 2010
  14. Business Week, "Hospitals, insurers: Keep Mass. alcohol sales tax", October 5, 2010
  15. Dorchester Reporter, "On November 2nd, vote 'no' on all three ballot questions", October 6, 2010
  16. Wicked Local, "Wolf: Just say no", October 18, 2010
  17. Boston.com, "A toast to the tax on alcohol", June 12, 2010
  18. New Bedford Standard Times, "Our View: Vote no on cutting sales, liquor taxes", September 28, 2010
  19. Milford Daily News, "Robie: Questions 1 and 3 test values", October 3, 2010
  20. Taunton Daily Gazette, "Q&A: Opposing arguments on a few of this year's state ballot questions", October 12, 2010
  21. Wicked Local, "Volume of alcohol sales rises 4 percent in Massachusetts despite new sales tax", September 26, 2010
  22. [1]
  23. [2]
  24. Enterprise News, "MASS. MARKET: High stakes battle looms over alcohol tax", September 25, 2010
  25. Boston Herald, "Reports calls for bigger state spending cuts, warns of $5B budget gap", March 1, 2010
  26. Telegram.com, "‘Yes’ on 1", October 17, 2010
  27. Wicked Local, "EDITORIAL: Ballot questions: No, no, and no", October 17, 2010
  28. The Daily Collegian, "Massachusetts ballot questions: No, No and No", October 21, 2010
  29. Sun Chronicle, "Tax-cut proposals, 40B repeal, would hobble Bay State", October 25, 2010
  30. Tufts Daily, "Editorial | Vote no on Massachusetts’ Questions 1 and 2", October 26, 2010
  31. South Coast Today, "OUR VIEW: Defeat ballot questions", October 26, 2010
  32. Masslive.com, "Editorial: Vote no Massachusetts ballot questions 1, 2 and 3", October 27, 2010
  33. Suffolk University, "Poll shows Republican Baker Surging", February 25, 2010
  34. Wicked Local, "Alcohol tax repeal- a tale of two polls", June 8, 2010
  35. News Telegram, "New poll shows Patrick in lead", May 26, 2010
  36. Enterprise News, "Sales tax rollback wins support of 54 percent in poll", September 8, 2010
  37. Massachusetts Secretary of State, "Elections: Initiative Petition for Law"
  38. Boston Globe, "Toll ending question fails to make Mass. ballot", November 19, 2009