Millionaire's Tax Ballot Question Struck Down

BOSTON, MA — The controversial so-called millionaire's tax ballot question has been struck down by the Supreme Judicial Court Monday morning. The question would have raised the income tax of some of the highest earners in the state by 4 percent, and used that money for transportation and education.

The state's highest court in a split decision sided with business groups who argued it was unconstitutional. The move removes one of the more talked-about questions from the November ballot - and one of the most important tax-related questions in decades. It also removes the possibility of an additional $1.6 billion to $2.2 billion in tax revenue, the Department of Revenue said.

The groups pushing against it argued there were too many unrelated aspects involved in the question. The SJC agreed in its ruling, saying it should have never been certified by Attorney General Maura Healey's office.

The court found that voters who favored a graduated income tax but not earmarking funds for a specific purpose and voters who wanted to designate funds for transportation and education but not to adopt a graduate tax structure would be in an "untenable position."

"A voter who commuted to work on an unreliable subway line, but who did not have school-aged children and was unconcerned about public education, might want to prioritize spending for public transportation, without devoting additional resources to public education, but would be unable to vote for that single purpose," the decision said. "A parent of young children, who lived in a rural part of the Commonwealth and did not own a motor vehicle, would be unable to vote in favor of prioritizing funding for early childhood education without supporting spending for transportation."

The suit was filed by officials from three major business groups - the Massachusetts High Technology Council, Mass. Taxpayers Foundation and Associated Industries of Massachusetts.

The state Constitution allows initiative petitions to contain only subjects that are "related" or "mutually dependent," and the lawsuit argued that the proposed surtax improperly bundled unrelated subjects of a graduated income tax and spending on education and transportation.

The proposed constitutional amendment specified that revenues collected from the surtax could only be spent to provide "quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation."

A dissenting opinion written by Justice Kimberly Budd and joined by Chief Justice Ralph Gants said there was "no way to separate the question into subjects and still have the same question -- the petition does not have the same meaning if its subjects are separated."

Supporters of the tax, proposed by the Raise Up Massachusetts Coalition that is also behind ballot questions to raise the minimum wage and establish a paid leave insurance program, have said it would support critical investments in public education and transportation, without most taxpayers bearing the burden.

Opponents warned it could lead to an exodus of wealth from the state, along with tax revenues associated with higher income households.

In a Suffolk University poll released last week, more than 66 percent of likely voters polled supported the ballot question.

Other possible ballot questions would lower the sales tax and increase minimum wage. Outside of finances, another question would repeal a law Gov. Charlie Baker signed in 2016 that allows transgender people to use public facilities, including restrooms and locker rooms, that correspond with their gender identity, regardless of their sex at birth.

Materials from State House News Service was used in this report

Photo by Alison Bauter for Patch