Question 5 would revise the state’s 1986 tax-cap law, which requires refunds when tax collections exceed a limit tied to wage and salary growth. The cap is recalculated each year using the previous year’s limit, and current rules also allow the state to account for years when revenue fell short and for tax cuts. Those provisions have helped widen the gap between the cap and actual collections. Taxpayers have received refunds under the law only twice: in 1987 and 2022.

The ballot proposal would instead base the calculation on how much the state collected, remove the ability to carry forward shortfalls or factor in tax cuts, and include revenue from the state’s 4% surtax on income above $1 million. Voters approved that surtax in 2022 to support education and transportation investments; it is not currently included in the 62F refund calculation.

An analysis by Tufts University’s Center for State Policy Analysis estimates the revised formula could produce eight or nine refunds over the next two decades—roughly two to four times as many as under the existing formula. The analysis estimates the refunds could average $200 to $250 per taxpayer annually and reduce state revenue by $1.1 billion to $1.3 billion in years when refunds are issued.

Supporters argue the change would return more money to residents and make state government more accountable for spending. Opponents say more frequent refunds could leave less revenue available for affordable housing, schools and safety-net programs.

The proposal also raises questions about how refunds would affect later calculations. Under its wording, a refund counts as negative revenue in the following year. That could lower the revenue figure used to calculate the next cap and potentially make another refund easier to trigger.

If approved, the change would take effect July 1, 2027, at the start of fiscal 2028. The Legislature could revise the measure’s language after voters decide, according to the proposal’s current terms.