BOSTON — Massachusetts’ highest court struck down a proposed “millionaires tax” ballot question Monday, scrambling spending plans that were already being crafted by the Legislature and Democratic candidates hoping to challenge popular Republican Gov. Charlie Baker this November.
Closely watched both at home and in national tax policy circles, the tax ballot question was a priority for progressive activists, labor unions, and many Democratic groups eager to bring more money into the state’s coffers for investment in transportation and education. Tax proposals specifically targeting income of more than $1 million are regularly proposed in many Democratic-leaning states, including New York and New Jersey.
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A “yes” vote on the ballot question would have created an additional 4 percent state tax on annual income earners of more than $1 million, lifting individuals’ state tax rate to 9.1 percent for all income over $1 million. It would have earmarked the additional revenue to go toward education and transportation.
The Supreme Judicial Court found that Attorney General Maura Healey should not have certified the ballot question because it “does not contain only subjects ‘which are related or which are mutually dependent,’” in a ruling announced this morning.
Massachusetts currently has a flat income tax rate of 5.1 percent. The tax’s new revenue could have brought in as much as $2 billion, the state’s Department of Revenue estimated.
The SJC’s decision on this ballot question has hung over activists and negotiators on Beacon Hill for months. Legislators have sought to strike a “grand bargain” between three other potential ballot questions: one that would raise the minimum wage to $15 an hour; one for paid family medical leave; and another that would decrease the state’s sales tax. Negotiations recently stalled amid an impasse around pay on Sundays.
Retailers Association of Massachusetts President John Hurst has said his organization would be open to dropping its push for a sales tax decrease if the millionaire’s tax was scrapped by the state’s high court. It was not immediately clear what the status of the sales tax decrease initiative was following the court’s decision against the millionaire’s tax.
The state Democratic Party and its candidates, labor leaders and legislators had already begun organizing and planning around the potential ballot question. Democrats, who control both chambers of the legislature, saw it as a boon for their candidates up and down the ballot in November that could lead to a boost in turnout.
One Democratic gubernatorial contender, Jay Gonzalez, was disappointed by the high court’s ruling, but vowed to locate the revenue for schools and the transit system elsewhere should he be elected governor. “As governor, I will propose another progressive way to generate meaningful revenue to help fund the critical investments needed to address the big challenges holding regular people back.”
And legislators have eyed the potential pot of money for new projects as a salve for the current cash-strapped state budget.
Current polling showed wide support for the ballot question. Among likely general election voters, 66 percent support the millionaire’s tax while 26 percent oppose it, according to recent polling from Suffolk University and the Boston Globe.