Massachusetts' borrowing costs could increase by five to 10 basis points if credit rating agencies downgrade the commonwealth in response to a potential elimination of the state's income tax, according to a report released yesterday by the Greater Boston Chamber of Commerce.

Voters will decide on Nov. 4 whether to keep the 5.3% tax in place or cut it in half to 2.65% beginning Jan. 1, followed by an elimination of the tax on Jan. 1, 2010. If Question 1 passes, lawmakers would have the capability to draft new legislation to repeal the initiative, amend it in some way, or implement new or additional fees, such as tolls.

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.