Dwarfing in importance the nationally publicized state fiscal crisis concluded last week is a political transformation making Massachusetts the unlikely vanguard of the national tax revolt.
No longer is this "Taxachusetts," the nation's most heavily taxed state where government prospers as the economy languishes. Oppressive property taxes are mandated to fall, and unconscionably heavy income taxes may come down next.
More than the level of taxation has changed. Confidence in government has fallen while business confidence surges, unemployment drops and economic growth accelerates. In what may be a transcendent political development of the 1980s, Massachusetts rivals California as a laboratory for supply-side economic theory.
The source of this shock was populistic, a spontaneous rage against bloated bureaucracy and unbearable tax rates. When voters last November voted overwhelmingly to cut property taxes 41 percent by adopting Proposition 2 1/2 (limiting property taxes to 2.5 percent of market value), politicians were opposed or in hiding.
Threats from those politicians that chaos would result from reduced government services are proving as empty here as they did in California after Proposition 13. Passage of a state budget last week, after antics that produced a payless payday for state employees, means that towns will have about half their revenue loss made-up by the state, which in turn also has tightened its belt.
Politicians agree that if Proposition 2 1/2 were voted on again today, it would again pass. The sharp drop it required in the prohibitively high auto excise tax pleases voters, but not so much as the first of three phased reductions in property taxes will later in the year. What little residual griping persists by politicians about 2 1/2 may soon be gone.
That the politicians were dragged kicking and screaming into an era of reduced government only contributes to anti-government hostility. "I'm sure that the people want the government off their backs and out of their lives," State Senate President Bill Bulger, architect of the relatively austere new budget, told us.
Strains of class conflict add a dimension to the tax revolt not found in California. It is rebellion by working-class neighborhoods in Boston and industrial towns, led by South Boston's astute Billy Bulger, against the establishment: the rich suburbs, Beacon Hill, Harvard.
This ought to yeild a windfall for maverick Democrat Edward King, a former professional football lineman who in 1978 was elected the state's first Irish Catholic governor since 1950. Instead, his unpopularity seems without limit. Unable to fulfill tax-cutting campaign promises King joined the political pack criticizing Proposition 2 1/2 while the people enacted it.
His performance in this year's budget fight was a fiasco, aligning himself against erstwhile ally Bulger and with bureaucrats desperate to save their jobs. Polls show the governor running far behind two liberal Democrats: former Gov. Michael Dukakis and Lt. Gov. Thomas P. O'Neill Ill.
But can Dukakis retain his suddenly revived popularity in today's political climate? A lecturer at Harvard's Kennedy School of Government since his upset loss to King, Dukakis repudiates 2 1/2 and disputes public alienation toward government. "I still think government can help make the individual's life better," Dukakis told us in confessed admiration for Joseph Califano.
If future state revenue is needed because of Reagan's cuts in federal grants, Dukakis opposes the sales tax as regressive. But regressive or not, it seems the wave of the future advocated by thoughtful liberals -- such as state Rep. Gerald Cohen, chairman of the Joint Taxation Committee. Influenced by a supply-side study of Massachusetts finances by Professor Arthur Laffer, Cohen proposes substantial income tax relief while expanding the sales tax.
King, seeking to regain leadership of the new Boston Tea Party, vows to veto any net revenue gainer. But more revealing of this state's political metamorphosis is Cohen's belief that state income tax cuts, coupled with Reagan's federal cuts, coupled with Reagan's federal cuts, will further invigorate the state's revived economy. When liberals embrace supply-side doctrine in the only state carried by George McGovern, farewell to "Thaxachusetts" seems at hand.