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SJC Justices Question Design of Millionaires Tax Proposal

Feb 6, 2018Boston Business Journal, Council in the News

By Greg Ryan

The state’s highest court weighed Tuesday on whether the proposed “millionaires’ tax” should be allowed to go before voters later this year, with multiple justices questioning if the different parts of the proposal are related enough to pass constitutional muster.

The leaders of five of the state’s business advocacy groups are challenging the measure before the Supreme Judicial Court.  The proposal would impose an additional 4 percent surtax on Massachusetts residents making $1 million or more annually.  The revenue from the tax is supposed to fund two items only, education and transportation.  Opponents argue that higher taxes will scare away businesses, though supporters counter that better schools and transit will improve the Bay State’s business climate.

The business leaders have contended the proposal is unconstitutional in several ways, but much of the hearing Tuesday focused on one of their arguments: That the measure’s three components — higher taxes on the wealthy, more funding for schools, and more funding for transit — have nothing meaningful connecting them.  The state constitution requires a ballot measure’s subjects to be related.

The SJC’s two newest justices, Elspeth Cypher and Scott Kafker, appeared skeptical that the different parts of the proposal are closely related enough, asking several pointed questions of the lawyers defending the proposal.  Kafker, for instance, said that under the logic of the tax’s backers, many policy issues, including pension reform and renewable energy, could be included in the ballot question.

Cypher and Kafker were appointed to the SJC by Gov. Charlie Baker last year.  To win the case, the business leaders must persuade a majority of the court’s seven justices to side with them.

Kafker asked one of the lawyers defending the measure, Kate Cook of Sugarman Rogers Barshak & Cohen, to point to a previous SJC ruling that supports her position.  He mentioned two ballot questions the court struck down because its elements weren’t related enough: A 2016 proposal to get rid of Common Core standards for Massachusetts schools, and a 2006 proposal to ban dog racing.

“Those seem to be three separate policy decisions,” Kafker said of the current proposal to impose the surtax in order to fund education and transportation.

Cook cited SJC rulings that upheld ballot proposals that opponents argued featured unrelated elements: The 2016 measure legalizing recreational marijuana, and another that same year putting restrictions on animal confinement.

A third justice, David Lowy, responded that he wasn’t sure about that comparison, since all of the elements of the marijuana question dealt with marijuana, and all of the elements of the other question related to animal confinement.

Cook maintained that the elements of the millionaires’ tax proposal shared at least two things in common.  Transportation and education both relate to “social mobility” in Massachusetts, she said.  Both subjects are also seen as chronically underfunded, she added.

Cook argued that as long as the ballot question doesn’t confuse voters or “misuse voters’ assent,” it should be allowed to proceed, based on previous SJC rulings.

Cypher raised the possibility that voters could be confused by the proposal because the Legislature could decide to devote all of the tax’s revenue to education, and none to transit.  “There’s no clear answer coming as to how these things relate,” she said.

The SJC’s chief justice, Ralph Gants, did say that he could see the proposal boiling down to a single question: Whether voters want a tax increase to be spent for one of two purposes.

After the hearing concluded, Steve Crawford, a spokesman for Raise Up Massachusetts, the group behind the proposal, held up Gants’ observation as proof of the proposal’s simplicity.  “Our question is four sentences.  It’s not designed to confuse people,” Crawford said.  “We hope that the court will see that.”

One of the business-group leaders who filed the legal challenge, Christopher Anderson of the Mass High Tech Council, said the justices’ questions show they’re skeptical the proposal’s elements are related.

“I think the effort is to try to get their hands around how to unwind the proponents’ claim that this is a unified social mobility question and find grounds to knock it out on that relatedness question,” Anderson said.

One of the SJC’s justices, Barbara Lenk, did not attend the hearing because of an ongoing health issue. She can still cast the deciding vote in the event of a tie.

Increasingly, the Massachusetts High Technology Council is stepping up to create, execute, and lead critical statewide competitiveness strategies. Fostering a vision for our innovation economy under the MassVision2050 banner, the Council solidifies its position as a thought leader providing valuable insights to navigate emerging technologies, facilitates long-term planning, and reinforces the Council's commitment to excellence and action in the evolving Massachusetts tech-driven economy.

To learn more, contact Council President Chris Anderson.