Raise Up Letter Tests Progressive Group’s Relationship With Business Community
By Jon Chesto, The Boston Globe, August 26, 2019
After sitting across the negotiating table from each other, Raise Up Massachusetts and Associated Industries of Massachusetts gradually developed what seemed like a friendly working relationship.
Most notably, the former foes put aside their differences to work together on the rollout of the state’s new paid family and medical leave program.
But that relationship is being put to the test now. The reason? The Raise Up coalition of labor and activist groups sent a letter last week to state lawmakers that accused Associated Industries of Massachusetts and other prominent business groups of actively organizing to avoid paying their fair share of taxes. Them’s fighting words.
The letter’s insulting tone took some in the business community by surprise.
Business groups are actively discussing revenue sources to improve the state’s rickety transportation infrastructure. Among the ideas: a gas tax increase, new tolls, higher fees on Uber and Lyft rides.
From Raise Up’s perspective, these approaches tax everyday working people. Raise Up sarcastically noted in its Aug. 21 letter that “large, profitable corporations and their lobbyists . . . think they deserve a big round of applause for letting the rest of us pay higher taxes!”
Spokesman Andrew Farnitano says the letter arose from a “collaborative process” approved by Raise Up’s steering committee. That committee includes six union organizations as well as several activist groups and the progressive business group Alliance for Business Leadership.
The panel. he says, is concerned businesses aren’t willing to do their part, in particular with regard to transportation and education funding. He didn’t offer specific suggestions for how companies can chip in financially, other than to say they should consider “corporate tax issues, corporate loopholes, tax incentive programs.” Businesses, he says, should come up with their own ideas.
The missive blindsided key business leaders who worked closely over many months with Raise Up to negotiate the so-called Grand Bargain package of labor laws last year, the one that set the new paid leave program into motion.
The Massachusetts High Technology Council was the first to publicly strike back against Raise Up’s latest letter, referring to Raise Up as a “coalition of spending advocates and public sector unions” in an e-mail that went out on Sunday. Vice president Mark Gallagher says Raise Up ignores the fact that state revenue collections have grown by nearly $4 billion in just two years.
While Mass. High Tech was not part of the Grand Bargain negotiations, the technology group joined with AIM and three other business organizations to fight Raise Up’s proposed “millionaires tax” in court. They succeeded at the Supreme Judicial Court, but that victory didn’t last. The tax on high earners, dubbed the “Fair Share Amendment,” has been refiled in a way to avoid a legal challenge and is now slated to go to the ballot in 2022.
Then AIM chief executive John Regan wrote his own “open letter” to Raise Up on Monday, taking issue with the assertion that businesses don’t pay their fair share. He cited a laundry list of numbers: $3.3 billion in annual state taxes, $4.9 billion in local property taxes, nearly $2 billion for workers’ comp insurance and also for unemployment insurance, to name just a few.
Tensions are running high as we round the corner to fall, when the House of Representatives is slated to debate revenue options to improve transportation in the state. Finding consensus among the business groups on that issue could be tough. School funding is also expected to come up on Beacon Hill. And the potential Fair Share Amendment, which purportedly could raise $2 billion a year for those two causes, looms large. Farnitano says he doesn’t think the letter will upset the relationships Raise Up leaders have developed with some of these business groups, including AIM. The two sides, he says, can continue to resolve problems as they arise, like they did on paid leave.
Maybe. But letters like this won’t help. Like Raise Up, the business groups have their own constituents to worry about, and some may wonder about working politely with Raise Up when the state’s business community gets treated like a punching bag.