The document discusses Massachusetts state budget shortfalls and potential options to close a $5.4 billion gap. It notes that 73% of state spending goes to education, local aid, healthcare, and human services. Even eliminating all state human services agencies or education spending would not close the full gap. Potential revenue generators discussed include closing tax loopholes, increasing various taxes by 1% including the corporate tax, gas tax, meals and hotel taxes, and income and sales taxes. Raising property taxes is also mentioned but impacts would depend on location.

1. BACKGROUND: What do we spend state dollars on? 73% of all spending goes to: Education Local Aid Health Care Human Service

2. If you cut salaries by laying off every state employee on the operating budget, you would still be short $1.1 billion. If you eliminate every state human services agency—Mental Health, Public Health, Transitional Assistance, Developmental Disabilities, etc—you would still be short $700 million. If you cut every dollar the state spends on pre-K and K-12 education you would still be short $600 million. If you cut every dollar the state spends on public safety including Corrections, State Police, and other community supports, you would still be short $4.4 billion. How would you cut $5.4 billion?

3. How would you generate revenue? Closing the Telecom Tax Loophole $54 million Currently telecom companies don’t pay property tax. This would require that they pay their fair share. 1% increase in the corporate tax $100 million Currently the corporate tax rate is scheduled to decrease from 9.5 to 8.0 percent over the next three years. TARGETED TO USE BROADBASED 19 cent a gallon gas tax $494 million in revenue The Governor has proposed a 19 cent gas tax to fund comprehensive transportation needs. 1% increase in meals and hotel taxes $158 million This is also offered as a local option tax so that cities and towns have another option to the property tax. Drop exemptions on candy, soda, and liquor $150 million Not a new tax, currently no one pays sales tax on these items. 1% increase in the income tax $ 1.7 billion personal income tax is a flat rate of 5.3% on most personal income. 1% increase in the sales tax $723 million This means you pay more on everything you buy except food, medicine, and clothing under $175. Increase Property Taxes Depends on where you live This tax is levied at the local level to fund town services, including education, trash removal, etc.