Massachusetts voters in November could face a ballot initiative to reduce the sales tax to 3% from 6.25%, a change that would slash collections by $2.5 billion in fiscal 2012.

Nearly $4 billion of Massachusetts School Building Authority debt and $3.4 billion of Massachusetts Bay Transportation Authority bonds are secured by a dedicated 20% of collections under the sales tax when it was 5%. Lawmakers last year increased the sales tax to 6.25% from 5% to help pay down bonds used to finance the Central Artery project, known as  the Big Dig, and help the MBTA balanced its operating budget.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.