The 'Millionaire's Tax' Is Dead. Here's Another Way To Pay For Transportation

A rider hurries to a waiting light rail train at a stop in front of the 10th U.S. Circuit Court of Appeals on Tuesday, Aug. 23, 2016 in downtown Denver. (David Zalubowski/AP)
A rider hurries to a waiting light rail train at a stop in front of the 10th U.S. Circuit Court of Appeals on Tuesday, Aug. 23, 2016 in downtown Denver. (David Zalubowski/AP)

The Supreme Judicial Court killed the “millionaire's tax” ballot question, also known as the Fair Share Amendment, before the people of Massachusetts had a chance to vote on it.

The measure would have added a 4 percent tax on annual personal income over $1 million and earmarked all the revenues exclusively for education and transportation. But the SJC ruled 5-2 that the question wasn't constitutional because it would give voters a single vote to decide on the package of "dissimilar subjects" — both the income tax and its beneficiaries.

The decision disgruntles advocates for transportation and education who were expecting the popular measure to deliver roughly $2 billion to two budget areas that have long been strapped for cash. Now, with all that money off the table, lawmakers are looking at alternative funding sources, and — at least for transportation — one possible solution comes to the fore.

A bill before the Legislature would empower neighboring municipalities to jointly establish local levies to raise money for transportation projects, subject to the approval of the town or city governments and voters in the affected communities. It’s like a home rule petition that can jump municipal boundaries.

Lawmakers call these measures "regional transportation ballot initiatives." Once a group of municipalities has agreed to form a bloc (or “district,” as the legislation refers to it), they can put a question on local ballots asking voters to approve the assessment of a surcharge — on a payroll tax, fuel tax, sales tax, property tax or vehicle excise tax — with all the collected revenue being funneled exclusively to the projects spelled out in the ballot question.

Massachusetts lags behind much of the nation.

Massachusetts lags behind much of the nation. Many states, both red and blue, are already using regional ballot initiatives to raise money for transportation projects that would otherwise go unfunded.

Residents of sprawling Los Angeles County recently approved Measure M, which raises the local sales tax by one-half percent and spends the receipts on a diverse set of projects aimed at reducing congestion and improving air quality. Up the coast, voters across nine Bay Area counties approved toll increases on bridges around San Francisco in support of a range of local transportation and transit initiatives. And it’s not just in California. Metro areas including Denver, Seattle and Charlotte have embraced the regional model, using it to fund light rail and other projects across county lines.

How would Massachusetts cities and towns take advantage of a regional transportation ballot initiative law?

I spoke by telephone with state Sen. Eric Lesser (D-Longmeadow), the sponsor of the bill. He offered as one possibility a light-rail network serving the backbone of the Pioneer Valley, connecting commuters in Greenfield and Northampton with employers in Springfield. The idea appeals to residents in those cities, but getting Beacon Hill to fund it would require legislators from the western part of the state to do some heroic logrolling.

Many states ... are already using regional ballot initiatives to raise money for transportation projects ...

And that points out the most salient advantage that regional ballot initiatives bring to the table — they’re regional.

Transportation policy is not a one-size-fits-all problem. People are more likely to vote to raise their taxes if they know the money will go to specific projects with tangible benefits for local communities. Lesser’s bill would give regions around the state greater self-determination and enable them to prioritize the long-term projects they believe their areas most need.

With the downfall of the millionaire's tax, the case for funding transportation with regional ballot initiatives gets stronger. But it has some drawbacks.

“The Fair Share Amendment would have been my first choice,” Lesser told me. For starters, it would have injected about $1 billion into the transportation budget right away. Regional ballot initiatives require municipalities to first organize into districts, then get the city governments to agree on a tax measure, and only then can voters say yea or nay. It could take years to deliver what could turn out to be a modest amount of revenue.

Another drawback is that, whereas the millionaire's tax would have been funded by the affluent, a tax connected to a regional ballot initiative could be regressive. “We’re very aware of that,” said Lesser, “but that’s not a reason not to do it.” Lesser suggested that, with good planning and proper discipline, the issue of regressive taxation can be overcome. “I think we could use this tool in a very progressive way.”

If the Legislature adopts Lesser’s bill to allow the diverse regions of the state to design and fund transportation projects tailored to their needs, it could trigger a wave of innovative projects. As other potential funding sources dry up, this approach is looking like the best route for the state.


Headshot of Frederick Hewett

Frederick Hewett Cognoscenti contributor
Frederick Hewett is a freelance writer living in Cambridge. He writes about climate and energy.



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