TAXES / POLITICAL ‘NEUTRON BOMB?’ : Massachusetts Is Symbol of National Revolt : Opponents say rollback initiative will ‘kill people, but leave the real estate intact.’ Citizens argue that spending is out of control.

Anti-tax crusader Barbara Anderson says she gave the Massachusetts Legislature fair warning two years ago when, during the ill-fated presidential campaign of Gov. Michael S. Dukakis, state lawmakers “faked two budgets in one night” in their panic over the state’s mounting fiscal woes.

“We knew there would be tax increases,” said Anderson, executive director of the 15,000-member Citizens for Limited Taxation. “We told them: ‘If you’re going to do this, you’re going to face it on the ballot in 1990. Don’t do it!’ ”

But the lawmakers paid her no mind, Anderson says. And now, true to her word, they are facing a tax-slashing initiative on next month’s ballot that--if approved, as some polls show likely--will amount to the largest reduction in state taxes ever in the nation.

What Measure Would Do

The measure, sponsored by Anderson’s organization and known as “Question 3” for its place on the ballot, would cut more than $1 billion out of this year’s $13.4-billion state budget and double that amount out of next year’s spending plan, according to official estimates.

Opponents of the measure say the impact on Massachusetts would be nothing short of disastrous, throwing thousands of state workers off the payroll, slashing vital human services from day care to elderly lunch programs, forcing the shutdown of many schools and colleges, bringing a halt to critical state construction projects and sending Massachusetts’ already shaky credit rating down the tubes.

A formidable array of individuals and groups representing government, business, labor and religion have joined forces to defeat the proposal, viewing it as a mindless, heartless and vindictive approach to curing the state’s fiscal crisis.

“Question 3 is a neutron bomb of a political weapon,” Boston Globe columnist David Nyhan wrote recently, reflecting a widespread sentiment among the proposal’s critics. “It will kill people, but leave the real estate intact.”

But Anderson, who engineered passage in 1980 of a measure known as Proposition 2 1/2 that put stiff caps on local property tax increases, contends that extreme times call for extreme measures. Left to their own devices, she argues, state lawmakers would continue to fiddle while Massachusetts burns from bloated state budgets, excessive taxation and fiscal irresponsibility.

“There is a strong silent majority of people who are with us and are just waiting for Nov. 6,” which is the date of the general election, Anderson said. “They’re going to vote ‘yes’ on Question 3 because they know there is no alternative.”

Massachusetts taxpayers are not the only ones up in arms over what they see as out-of-control government spending. Louisiana voters earlier this month approved a constitutional amendment that limits increases in state spending to the prior three-year average increase in state personal income.

A National Pattern

In addition, at least eight other states, including California, are set to vote on ballot measures during elections next month that would place restrictions on tax and spending increases.

And in several other states without provisions for voter initiatives to curb taxes, such as New Jersey, strong grass-roots movements are seeking constitutional amendments that would grant the electorate such rights.

“People feel that the guys they elected are not paying attention to the store and keep charging the taxpayers more so they can go off on any tangent they want without developing (fiscal) priorities,” said Janice Ballou, polling director of Rutgers University’s Eagleton Institute of Politics.

Still, the current anti-tax mood has far to go before it matches that of the late ‘70s and early ‘80s, when limitation measures were approved in 16 states, including California’s celebrated Proposition 13, says Scott Mackey, a fiscal policy specialist with the Denver-based National Conference of State Legislatures.

The Outlook

Of all the anti-tax ballot measures this year, Massachusetts’ Question 3 would have the most far reaching consequences. It would repeal the $1.8-billion tax increase Dukakis signed in July--the largest in the state’s history--and roll fees and charges back to their 1988 levels. It also would cut state income tax rates for two years to repay taxpayers for a $740-million tax increase enacted last year.

Opponents of the measure concede that, despite their broad-based support and vastly superior financial resources, they face a tough battle in winning the hearts and minds of Massachusetts voters.

“All the facts are with us, but all the emotion is with the other side,” said James Braude, head of the Campaign for Massachusetts’ Future, a coalition opposing the measure. “The issue for November is whether rationality will prevail over anger.”

TAX ISSUES ON NOVEMBER BALLOTS

State: California Type of Measure: Constitutional Description of initiative: Requires simple majority vote of the electorate to raise general taxes locally and by statewide ballot initiative, and a two-thirds vote to raise special (earmarked) taxes locally or by statewide ballot initiative. State: Colorado Type of Measure: Constitutional Description of initiative: Limits property tax levies; requires voter approval for state and local tax increases or debt issues; limits spending increases to inflation and population growth. State: Massachusetts Type of Measure: Statutory Description of initiative: Repeals all tax and fee increases approved legislatively or administratively since June, 1988; reduces personal income taxes for two years to offset 1989 increase. State: Montana Type of Measure: Constitutional Description of initiative: Replaces all current personal and corporate income taxes, excise taxes, property taxes, license charges and other user fees with 1% “transaction” tax. State: Nebraska Type of Measure: Constitutional Description of initiative: Limits state and local spending increases to 2%, with four-fifths legislative vote needed to override limits on state spending and majority vote to override limits on local spending. State: Nebraska Type of Measure: Statutory Description of initiative: Repeals 1990 tax increase for education finance reform. State: Nevada Type of Measure: Constitutional Description of initiative: Prohibits state from imposing a personal income tax. State: Oregon Type of Measure: Constitutional Description of initiative: Limits property taxes for schools to 5% of valuation and for general government to 1% of valuation; requires state to make up school revenue lost due to property tax caps. State: South Dakota Type of Measure: Constitutional Description of initiative: Limits property tax revenue increases to 2% annually for any taxing jurisdiction. State: Utah Type of Measure: Statutory Description of initiative: Repeals state sales tax on food. SOURCE: National Conference of State Legislatures