People making under $104,000 a year are taxed roughly 10 percent of their total income in the state, while those making $580,000 are taxed six percent, according to a presentation by Noah Berger, president of the Massachusetts Budget and Policy Center, a non-partisan and nonprofit organization that provides analysis of the state budget.

Is this formula partly to blame for Massachusetts' current budget woes?

Currently, Massachusetts' state and local taxes are regressive, meaning people who make less are taxed more, Berger said. Berger suggested that switching that might improve the state’s situation.

“It’s a long term discussion, but it could help,” Berger said.

The presentation, which outlined how the state analyzes past budgets and what in the budget is being affected by the current economic recession, was part of a larger forum on the state fiscal budget process held by Sen. Katherine Clark for the residents of Wakefield, Stoneham, Reading, Melrose, Malden and Lynnfield on Wednesday night at the Americal Civic Center.

“The whole budget process can be very confusing from the outside,” Clark said. “This is a great way to educate the public on the budget process.”

This Isn't "Taxachusetts" Anymore

Berger began by dispelling the notion that Massachusetts is “Taxachusetts.” In fiscal year 1977, taxes as a percent of personal income totaled 13.8 percent, third highest in the country and 2.4 percentage points above the national average. As of fiscal 2008, that has dropped to 10.3 percent, which is below the national average of 10.9 percent. In fact, Berger said, over that span of time, Massachusetts has shown the greatest decrease over any other state.

Unfortunately, this hasn’t helped the state’s deficit. Between fiscal 1998 and fiscal 2008, state spending has remained about the same, but tax revenue has dropped one percent, totaling, over $2.2 billion over that decade, and it has continued to drop. A projection for total revenue for fiscal 2012 puts the state's revenues $1.5 billion short of fiscal 2008.

“Recovery is starting, but the economy alone isn’t going to restore these numbers,” Berger said. “The state has to make a decision on taxes or continue to decline.”

Cuts in State Aid

In fiscal 2010 the state budget gap was $5 billion, which was made up by a number of different ways, first among them cuts, said Berger. Since 2001, early education and care, public health and environment and recreation have been cut 30 percent, and higher education has been cut 32 percent.

The higher education cut is particularly troubling, Berger said. Between 1979 and 2009 there has been a correlation between education and wages. Simply put, the more educated you are, the more you make.

As of 2009, Mass has the highest number of educated people in the workforce, and is among the top states in average hourly wages. However, this could change if these cuts continue.

“I am surprised to see the cuts for higher education,” said Peter Kilkelley of Wakefield, who attended the event. “It matters more now than ever.”

Berger said the question before Massachusetts residents is a tough one.

“We have to ask ourselves, are we willing to pay more in taxes to restore some of these programs?” he said.

Clark said she thought Berger's presentation would help citizens make informed decisions about their budget priorities.

“Now that people understand how the budget works, I hope we get more citizens advocating for the budget issue that matter most to them,” Clark said.

Berger's presentation on the state budget can be found at massbudget.org.