Surtax Opponents Take Summary Case To SJC

JAN. 27, 2022…..The campaign over the proposed Constitutional amendment to add a surtax on household income over $1 million took a step into the courtroom Thursday as opponents filed suit to influence how the proposal will be summarized for voters.

Opponents of the so-called millionaires tax want to see how the attorney general plans to describe the question to voters in pre-election materials and on the November ballot, and on Thursday filed a preemptive lawsuit with the Supreme Judicial Court asking justices to ensure the summary includes a cautionary statement.

The complaint was brought by Massachusetts High Tech Council President Chris Anderson and 54 other voters, including Reps. Nick Boldyga, David DeCoste, Colleen Garry and Marc Lombardo, Christopher Carlozzi of the Massachusetts chapter of the National Federation of Independent Business, Paul Craney of Massachusetts Fiscal Alliance, Jim Stergios of the Pioneer Institute and Eileen McAnneny of the Massachusetts Taxpayers Foundation.

It names Attorney General Maura Healey and Secretary of State William Galvin, two Democrats with roles in the process, as defendants in their elected capacities.

Healey has not released the summary of the proposal that would shift Massachusetts away from its flat income tax rate structure and her office did not respond Thursday to inquiries about its status. If the amendment is approved by voters, the first $1 million of household income would still be taxed at the current 5 percent tax rate and household income above that first $1 million would be taxed at an effective rate of 9 percent.

While state law only requires that Galvin officially publish the summaries by the second Wednesday of May, the Supreme Judicial Court has previously asked that the attorney general’s office make them available early enough so that opponents can launch legal challenges. The court said it prefers a Feb. 1 deadline to avoid “a mad scramble” of trying to resolve challenges before voter information booklets are sent to the printer, often in July.

The plaintiffs said that because there is no summary yet available and Feb. 1 is next week they “had no choice but to ask the SJC to exercise its authority to require a fair, accurate description” of the proposal be provided to voters and printed on the November ballot itself.

The suit specifically addresses one of the opponents’ main arguments — that the money raised by the surtax would not be restricted to use for transportation and education as supporters claim and that it may not result in actual increases in spending in those areas. It requests that the SJC order that the ballot materials tell voters that “the Legislature could choose to reduce funding on education and transportation from other sources and replace it with the new surtax revenue because the proposed amendment does not require otherwise” and order that Healey and Galvin not put the question on the 2022 ballot unless the summary reflects that.

“Here is the bottom line,” Anderson said. “On five previous occasions, Massachusetts citizens have considered ballot initiatives that would empower the Legislature to establish a graduated income tax and the citizens rejected all five. This sixth attempt should not mislead voters through an unfair and inaccurate summary into believing that the Amendment will guarantee additional funding for either transportation or education.”

Sen. Jason Lewis, a co-sponsor of the amendment in the Legislature, told the News Service two weeks ago that he “fully expects” future Legislatures to spend the additional funding on education and transportation.

“The language of the ballot question, which again, will be in our state Constitution, says very clearly that this money needs to be spent only on education and transportation,” he said. “I think that gives very clear direction to future Legislatures and governors.”

Rep. Garry, a Dracut Democrat who has repeatedly voted against the Constitutional amendment as it worked its way through the Legislature, noted that even if current lawmakers say they intend to use the additional money on transportation and education, “future legislators may change their minds.”

“Voters need to be accurately informed that it is only the Legislature that can allocate how tax money is spent,” Garry said. She added, “I hope the SJC agrees with us on the importance of providing accurate information to the public voting in November’s election.”

Surtax opponents, especially those associated with the Mass. High Tech Council, were successful in getting the SJC to toss the surtax proposal from the 2018 ballot. In June of that year, the SJC ruled that the question improperly mixed two different spending priorities and a major change in tax policy — a no-no for initiative petitions. Democrats have gotten around that rule this year by having legislators, who are not bound by the same restrictions on initiative petitions, file the petition directly as a legislative amendment.

In June 2019, House and Senate members voted 147-48 in favor of the amendment and voted 159-41 in favor of it again in June 2021, clearing the way for voters to decide on the 2022 statewide ballot whether to impose the new 4 percent surtax on annual household income over $1 million.

While surtax opponents have been busy making their case against the policy, the Raise Up Massachusetts organization that supports the surtax has been mostly quiet. A poll released by the MassINC Polling Group this month showed that 70 percent of registered voters support the effort to amend the Constitution.

“Massachusetts families are struggling just to stay ahead in the ongoing COVID pandemic, but instead of proposing real solutions our opponents are playing word games in the courts to confuse voters,” Raise Up said in a statement. “It won’t work. People know the rich got richer during the COVID pandemic and we expect them to pay their fair share.”

The surtax would add about $1.3 billion in revenue for the state, according to a report published this month by the Center for State Policy Analysis at Tufts University, revenues that would be worked into a state budget that currently totals about $47.6 billion.