The Legislature is currently and continually debating income tax rates. A proposal to reduce the income tax has been contentious for many years. In 2000, citizens voted to lower the income tax rate to 5%.  However, the state’s financial situation has changed considerably since the vote occurred prior to the most recent recession. Voters also soundly trounced Question 1 in November, 2008, thereby rejecting calls to repeal the state’s income tax entirely.

The fact remains that cutting the state income tax rate to 5% would diminish annual state revenues by approximately $575 million at a time when municipalities need growth in local aid accounts simply to return to the level of support they received in FY2002. 

16.a    The Legislature should resist the pressure to reduce the state income tax rate to 5%

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