Question 5 would tighten the formula for the state’s tax revenue cap
(5-minute read)
This series, examining the nine statewide questions on the November 3, 2026, Massachusetts ballot, continues with Question 5, which asks voters whether to change the formula the state uses to cap how much tax revenue it can collect each year.
What Question 5 would do
Question 5, titled “Law Proposed by Ballot Petition,” is an initiative petition that would change the formula the state uses to cap how much tax revenue it can collect each year, and provide refunds to taxpayers when revenue exceeds that limit.
Massachusetts has had a state tax revenue limit since 1986. Under the current formula, the limit for a given year is calculated by taking the prior year’s limit and increasing it by the average growth of wages and salaries in Massachusetts over the previous three years. Question 5 would instead base the limit on the prior year’s actual net state revenue, rather than the prior year’s limit, plus that same wage growth factor. Any revenue collected above the limit would still be refunded to taxpayers the following year.
The measure would also add revenue from the state’s 4% surtax on annual income above $1M, often called the millionaire’s tax, into the calculation. That revenue is currently excluded from the formula. The changes would take effect July 1, 2027.
The state’s Executive Office of Administration and Finance found that the measure would impose stricter limits on allowable revenue growth, reducing money available for the state budget, including local aid to schools and municipalities, and for the state’s “rainy day” reserve fund. The office said the proposal could also change how often the state issues taxpayer refunds.
A yes vote would change the revenue limit formula as described above and add surtax revenue to the calculation. A no vote leaves the current formula in place.
How the revenue limit works today, and elsewhere
Voters created the state’s revenue cap in 1986 by approving a ballot question sponsored by the Massachusetts High Technology Council and Citizens for Limited Taxation. In the 40 years since, the limit has been exceeded only twice, triggering refunds of about $29M in 1987 and about $2.9B in 2022.
Massachusetts is one of 19 states with a tax revenue limit and one of eight that has a revenue limit without a separate spending limit, according to Ballotpedia. Voters in California and Colorado will also decide revenue-or-spending-limit questions this November. Similar measures have failed at the ballot in three prior instances, twice in Colorado in 2021 and 2023 and once in Louisiana in 2025.
Path to the ballot
The Attorney General announced the petition in August 2025 and cleared it for signature collection that September. Organizers submitted sufficient valid signatures that December, sending the proposal to the Legislature as House Bill 5006.
The Special Joint Committee on Initiative Petitions held a hearing on the measure, along with a related petition to cut the state income tax rate from 5% to 4% (House Bill 5007), which ultimately did not reach the ballot, on March 30, 2026. On May 4, a majority of the committee voted to recommend no action on either petition, writing that together they would “significantly weaken the Commonwealth’s ability to respond to economic downturns” while disproportionately benefiting high earners. A minority report from state Sen. Ryan Fattman recommended adopting both House Bills 5006 and 5007. The Legislature did not act by the May 5 deadline, and organizers gathered a second round of signatures to qualify Question 5 for the November ballot, a step confirmed on July 17, 2026.
The case in favor
Supporters, including the Massachusetts Fiscal Alliance, the Massachusetts High Technology Council, the Retailers Association of Massachusetts, and the Republican Party of Massachusetts, argue the current formula contains loopholes that have let the state avoid triggering refunds. The Massachusetts Opportunity Alliance has estimated that under the revised formula, taxpayers would have received refunds 24 times over the past four decades, totaling nearly $19B, according to Ballotpedia.
In the official argument filed with the state, Taxpayers for an Affordable Massachusetts wrote that the change “sets reasonable limits on the growth of state government revenue” and “will not cut state spending for important services like education, transportation, and healthcare.” Paul Craney, executive director of the Massachusetts Fiscal Alliance, said the current law “has only been triggered twice in 40 years” because of what he called loopholes, adding that “this fix closes the loopholes and restores the taxpayer protections voters overwhelmingly approved.”
The case against
Opponents, led by the group Protect Massachusetts’ Future, include Senate President Karen Spilka, the Massachusetts Teachers Association, the American Federation of Teachers Massachusetts, and the League of Women Voters of Massachusetts. They argue the measure would force budget cuts to schools, healthcare, and public safety, particularly during recessions, by shrinking the state’s rainy-day fund when it is needed most.
In the official opposing argument, Andover Public Schools teacher Colette Berard wrote that the measure would pull millionaire’s tax revenue, which funds schools and transportation, into “the complex, unpredictable algorithm that sets the revenue limit,” adding that “millionaires would get frequent tax rebates, while the rest of us pay the price.” Phineas Baxandall of the Massachusetts Budget and Policy Center said the formula change would tend to “continually reduce the cap on state revenues available for budgetary purposes,” with reduced revenue following a recession making refunds more likely just as the state needs to invest, according to Ballotpedia.
Where to find the full guide
The Information for the Voters guide is available online through the Secretary of the Commonwealth's Elections Division. It is offered in English, Spanish, Traditional Chinese, Vietnamese, and Khmer, and an audio version is available. Residents with questions can contact the Elections Division at 617-727-2828.
The series continues later this week with Question 6.
