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Business Groups Applaud, While Progressives Bemoan 'Millionaire's Tax' Ruling

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John Adams Courthouse. (Joe Difazio/WBUR)
John Adams Courthouse. (Joe Difazio/WBUR)
This article is more than 4 years old.

Business groups in Massachusetts are applauding, and progressive activists and organized labor are expressing disappointment, after the Supreme Judicial Court on Monday rejected the so-called "Fair Share Amendment," a proposed ballot initiative that would have raised taxes on the state's highest earners.

The amendment would have hiked taxes on personal income above $1 million by 4 percent. It would have raised an estimated $2 billion a year and directed that money to transportation and education.

A coalition of business groups opposed the measure, calling it unconstitutional, and challenged it in court.

"The so-called 'millionaire's tax' kind of evokes this view of fat cats sitting on a beach somewhere. That's not really what happens," said Chris Geehern, vice president of one of the groups, Associated Industries of Massachusetts.

The ruling found Attorney General Maura Healey was wrong to certify the ballot initiative because, according to the majority, it tried to do too much. That is, it sought to raise taxes on the very rich and then direct the money to two unrelated causes. It's that issue of "unrelatedness" that ran afoul of the Massachusetts Constitution.

"The ballot language called for those new revenues to be used solely for transportation and education. That was considered to be two things, and therefore is was found to be unconstitutional," said Jim Stergios, executive director of the free market-oriented Pioneer Institute, which wrote an amicus brief opposing the amendment.

The decision was a blow to progressives, including Steve Crawford with Raise Up Massachusetts, a coalition that sponsored the millionaire's tax.

"For our future as a state and for our state's economy, we do need new revenue, and we think the wealthiest citizens of the commonwealth are those best prepared to pay for it," Crawford said.

Raise Up gathered 157,000 signatures in support of the ballot initiative. The dissenters, Chief Justice Ralph Gants and Associate Justice Kimberly Budd, wrote that in rejecting the Fair Share Amendment, "the court ... interferes with the ability of the people to exercise the constitutionally granted legislative power."

The two Democrats running for governor — Bob Massie and Jay Gonzalez -- also criticized the decision. They've laid out ambitious agendas, including big spending on education and transportation, so they both supported the surtax.

"We urgently need this money," Massie said Monday. "We have a collapsing infrastructure, we have a school system that is being starved of money, so much [so] they are ending up suing the state, so [I'm] very disappointed that this reasonable effort has been blocked by the Supreme Judicial Court."

Both Democrats say if elected governor, they'd find other ways to raise the money.

Said Gonzalez: "As governor, I will propose another way to raise the revenue from those who are doing well in this state, to make some of these critical investments to make a difference in regular people's lives -- who Charlie Baker doesn't even see."

Gonzalez doesn't say how he'd raise that revenue.

For his part, Gov. Charlie Baker has avoided taking a position on the millionaire's tax. Asked Monday about the court's decision, Baker said he's no fan of new taxes, but he also took credit for spending more on transportation and education.

"The last five years of the Patrick administration, the commonwealth spent about $3 billion on the MBTA and public transportation," he said. "We're going to spend $8 billion over the next five years, which is almost three times as much. We've spent the highest level ever on K-12 education, almost $500 million increase over the past few years."

Monday's decision probably helps Baker politically because it removes an issue that his opponents have been using against him. It also removes a cause that Democrats hoped would help drive their supporters to the polls in November.

This segment aired on June 19, 2018.

Related:

Anthony Brooks Twitter Senior Political Reporter
Anthony Brooks is WBUR's senior political reporter.

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