Justices Weigh Bid to Derail Income Surtax Ballot Proposal

Supporters of a constitutional amendment to tax only the highest earners in Massachusetts, generating funds for education and transportation, encountered some skeptical Supreme Judicial Court justices on Tuesday who questioned the constitutionality of the proposal.

Initiative petitions must only contain subjects that are “related or which are mutually dependent,” according to the state Constitution, and the justices of the state’s highest court spent much of their Tuesday morning questioning whether the proposed ballot question meets that requirement.

“You’re connecting a progressive income tax to paying for education and transportation,” Justice Scott Kafker told Kate Cook, an attorney for proponents of the so-called Fair Share Amendment.  “Those seem to be three separate major policy decisions.”

“We see this as a unified policy,” Cook contended.  Transportation and education are “the keys to social mobility” and they are “chronically underfunded government services,” Cook told the justices.

“Whose unified public policy is it?”  Justice Elspeth Cypher asked later in the proceedings.

Hoping the seven-member court will stymie proponents’ efforts to put the surtax before voters in November, a group of business leaders sued Attorney General Maura Healey last year, arguing she had erred in certifying the question as eligible for the ballot.

If the state’s highest court rejects the objections raised by the cadre of business leaders, voters in November will decide whether to lodge a 4 percent surtax on incomes over $1 million into the constitution, raising an estimated $2 billion to be spent on education and transportation.

The proposed amendment improperly bundles the unrelated subjects of taxation with both transportation and education spending, usurps the Legislature’s control over the budget, and improperly appropriates spending through a citizens’ initiative, Kevin Martin, an attorney for the business leaders, argued.

Political opponents of the proposal have argued lawmakers, who adjust spending priorities each year, could use the overall increase in revenue to fund areas of government unrelated to transportation and education. Juliana Rice, deputy chief of the attorney general’s Government Bureau, made a similar argument that the Legislature would retain control over state coffers and the question would not usurp lawmakers’ jurisdiction over state spending.

The state currently spends $10 billion to $11 billion on transportation and education, said Rice, who defended the constitutionality of the question.

Rice argued that the question’s tax and spending provisions are interrelated.

“This comprehensive whole that’s being presented – everything moves in the same direction: a large broadly based tax to support broad policy areas, leaving the specific spending choices up to the Legislature,” Rice said.

Calling transportation and education “twin pillars of a thriving community,” Justice David Lowy wondered whether a voter might support increasing spending in those areas while opposing tax hikes and thus leave the voting booth “frustrated.”

Five of the seven justices on the court were nominated by Gov. Charlie Baker, who has declined to take a stance on the proposed tax, which other elected Republicans have vocally opposed.  Unlike ordinary bills, the citizen initiative for a constitutional amendment would not go before the governor for his approval so he could remain a bystander throughout the process.

Lowy, Cypher and Kafker are Baker nominees while Chief Justice Ralph Gants was appointed by former Gov. Deval Patrick. Cook was Patrick’s chief legal counsel.

Justice Barbara Lenk, who was also appointed by Patrick, was not present for Monday’s arguments.  The court last year announced that Lenk “will not be present for oral argument through at least the end of this calendar year” so that she can attend to “some non life-threatening health issues.”

The constitution tells state officials to “cherish” education, and Gants questioned whether that principle might come into play in determining the constitutionality of the proposed amendment.

“The Legislature would have to spend $2 billion because of its constitutional obligation to education,” Gants ventured.

Lawyers from the governor’s office, the Senate president’s office, and former Supreme Judicial Court Justice Robert Cordy were in the gallery of the John Adams Courthouse for Monday’s arguments, as was Rep. Jay Kaufman, a chief proponent of the ballot question.

The effort to install a tax in the state’s constitution – the oldest functioning written constitution in the world – began years ago.

Volunteers in 2015 collected roughly 155,000 signatures – far beyond the 64,750 threshold – to place the matter before the House and Senate, which jointly approved of sending it to the ballot in 2016 and then again in 2017 with roughly 70 percent support each time.  Constitutional amendments must pass in two successive legislative sessions before appearing on the ballot.

Critics point out that unspooling a tax embedded in the constitution would require a similarly lengthy process.  The constitution currently requires that incomes derived from the same class of property be taxed “at a uniform rate.”

Prior efforts to make a progressive income tax were defeated by voters in 1962, 1968, 1972, 1976 and 1994, according to opponents.

Supporters say the tax would raise roughly $2 billion specifically designated for transportation and education – helping improve roads, bridges and classrooms – while opponents contend it would drive top earners out of the state and harm small business owners who take pass-through income.

In a statement, Martin said Tuesday’s arguments were the first time the Supreme Judicial Court has taken up a case regarding an initiative petition to amend the constitution since 1937.

“Their questions to both sides were thoughtful and probing, and we await their decision,” Martin said in the statement.