Will it be thumbs up or down? Tax cut questions on Nov. 2 ballot.

• Position: NEWS

Byline: Lisa Eckelbecker

When voters head to the polls in nine days, they'll have a chance to decide whether to cut the state's sales tax by more than half and eliminate the sales tax on alcoholic beverages.

If both measures win approval, they could slash more than $2 billion in revenue from the state budget.

Both questions have their roots in tax increases instituted last year. In August 2009, as the recession was battering state revenues, Massachusetts raised the sales tax to 6.25 percent from 5 percent. The state also began applying the sales tax to beer, wine and liquor, all of which had previously been exempt.

The higher taxes boosted state revenues during the 2010 fiscal year that ended June 30, a period when income tax collections were declining. During the 10-month period in 2010 when the taxes were collected, Massachusetts brought in an estimated $739 million in additional sales taxes, according to the state Department of Revenue. The tax on alcohol alone brought in an estimated $97 million in revenue.

Question 3 seeks to slash the sales tax to 3 percent beginning Jan. 1, 2011, and is backed by anti-tax activist Carla Howell of Wayland, who led unsuccessful efforts to eliminate the state's income tax in 2002 and 2008. Ms. Howell, chairwoman of the Alliance to Roll Back Taxes, argues that lowering the sales tax would safely trim about $2.34 billion in fat from state spending, attract out-of-state shoppers to Massachusetts and lead to the creation of about 33,000 private sector jobs.

"All tax cuts stimulate the economy and create jobs," Ms. Howell said. "There's nothing particularly different about this."

Opponents of Question 3 include large business organizations such as the Associated Industries of Massachusetts, the state hospital industry's main trade group and unions. The measure would eliminate too much from state revenues and potentially affect human services and the state's ability to pay its business vendors, said AIM Executive Vice President of Public Affairs Brian R. Gilmore, who acknowledged some of the organization's 6,000 members disagree with that stance.

"Would we like to see government be more efficient? Absolutely, and we think there are many things that can be done, but we basically think this is a shotgun approach," he said.

All of the candidates for governor oppose Question 3. Groups on both sides disagree on the size of the budget and the impact a sales tax reduction would have.

The most recent audited budget...