Introduction

Over the past 40 years, the Massachusetts High Technology Council, Inc. has developed an unmatched record of success by unifying CEO and senior executive decision makers to advance strategies that impact the most critical public policy decisions facing the Commonwealth of Massachusetts, its job creators and its citizens.

In June 2018, we celebrated another notable—and historic—leadership accomplishment which ranks in importance with several prior Council achievements, including: Enabling the passage of Proposition 2 ½ (1980); drafting and securing the enactment  of the state’s first R&D tax credit (1992); successfully leading a New England-wide collaboration to support the increasingly technology-oriented mission at Hanscom Air Force Base and the US Army Soldier Systems Center in Natick during the federal Base Realignment and Closure review at the request of Sen. Kennedy and Gov. Romney (2005); and engineering the repeal of the Legislature’s expansion of the state sales tax to custom computer services—the so-called “Tech Tax”—in 2013.

On June 18, 2018 the Massachusetts Supreme Judicial Court (SJC) declared the proposed amendment to the State Constitution to establish a permanent $2 billion per year personal income surtax invalid and unconstitutional. Ours was the first challenge to a proposed citizen’s initiative to amend the Constitution since 1937.  The victory means that the proposal will not appear on the 2018 statewide ballot in November.

In its ruling, the SJC found that the proposal violated the State Constitution’s explicit requirement that ballot initiatives contain only policy matters that are clearly related or mutually dependent.  The Court held that the proponents of the amendment improperly combined sending on education and infrastructure, which are discrete policy subjects You can view the full text of the SJC decision written by Justice Gaziano here.

The Council’s board of directors and a team of partners has worked together for nearly 3 years to challenge this attempt to severely limit the Legislature’s deliberative taxing and spending authority and establish state fiscal policies in direct violation of the Constitution.  Special thanks to Attorney Kevin Martin and his associates David Zimmer and Joshua Bone of Goodwin Procter for the well-crafted and delivered arguments.

We had a lot of support.  As the lead and coordinating plaintiff, I was joined by four other business leaders from Associated Industries of Massachusetts, the National Federation of Independent Business, the Massachusetts Competitive Partnership, and the Massachusetts Taxpayers Foundation as co-plaintiffs in the legal challenge which was commenced in the Massachusetts Supreme Judicial Court (SJC) in October 2017.

2018-2022: The Path to Fiscal Stability-A Unified Response to Address Root Causes

Throughout the multi-year process of opposing the constitutional amendment proposal, Massachusetts business leaders continually asked: “What is driving this insatiable demand for new revenues?”  Council leaders have observed consistently low unemployment, enormous levels of capital investment, and significant annual increases in state revenues for nearly a decade.  Yet the state seems stuck in a continuing cycle of fiscal crises around its now $41B annual budget, marked by recurring demands for higher taxes on employers and growing concerns that many of the Commonwealth’s economic and quality of life priorities (including education and transportation) are being underfunded.

As Massachusetts’ economic engines have hummed along in high gear in recent years, too few policymakers and political leaders have focused on the Commonwealth’s fundamental fiscal challenges.  But in case after case around the nation, the taxation and spending policies of individual states’ -both the decisions they make and how they make them- are an increasingly important differentiator in the global competition for job creation and capital investment.

Council Chairman Aron Ain’s remarks at our 2018 Annual Meeting (see video highlights here) the day after the SJC’s affirmation of our challenge, and the Council’s July 4, 2018 Boston Globe opinion editorial summarize why we believe it is necessary to now take the lead on helping strengthen the state’s public finances and improve its fiscal stability.

The Commonwealth must prioritize these state fiscal stability challenges that threaten the conditions for investment, employment growth and quality of life in Massachusetts, including a world-class public education system and 21st Century transportation infrastructure.  Chief among the challenges to be addressed is the explosive growth in the cost of MassHealth, the state’s Medicaid program, which now accounts for more than 40% of the total state budget.

A unified community of job creators deeply engaged with state policymakers will be critical to advancing the solutions necessary to put the Commonwealth on more secure financial footing.  The Council is dedicated to growth and committed to action and we look forward to helping unify our Commonwealth’s leaders around an agenda that will keep Massachusetts moving forward.