Colin A. Young
State House News Service
A collection of organized labor leaders sent Gov. Maura Healey and top lawmakers a letter Tuesday opposing any negotiated compromise with the groups pushing tax cut initiatives towards November's ballot and pledging to provide "organizing and financial resources" to defeat the proposals if they do go to voters.
Supporters of the proposal to cut the state's income tax rate from 5% to 4% over three years and the attempt to cap state revenue collections say the measures are needed to maintain and sharpen the state's competitive edge and bolster a softening labor market. Opponents, including Beacon Hill Democrats, argue that the questions would upend the state budget to the detriment of social services and municipal budgets across Massachusetts.
Last week, House Speaker Ron Mariano urged proponents of an initiative petition that would cut the income tax from 5% to 4% over three years to sit down with the House to discuss potential alternatives.
On Tuesday, leaders of the Massachusetts AFL-CIO, SEIU Massachusetts State Council, AFSCME Council 93, Massachusetts Building Trades Unions, Mass. Teachers Association and others informed Healey, Mariano, Senate President Karen Spilka and others of their unions' "staunch opposition to any negotiated deal with the Massachusetts High Technology Council and the Massachusetts Competitiveness Partnership," two primary supporters of the two tax-related questions.
"Any deal to cut taxes or otherwise provide givebacks to the very wealthy and multinational corporations will only worsen the fiscal crisis being acutely felt in cities and towns across the state. We urge you not to engage with this blatant extortion attempt," the letter said. "If you do, we believe the anti-tax special interests will come back with similar threats and new demands every election cycle, raiding public coffers for their own benefits while shifting the costs of diminished public services onto everyone else. The threat of budget catastrophe is being used by members of the business community to hold our state hostage and force through regressive policy changes that would never receive the public’s support, in a clear abuse of the ballot initiative process."
The tax cut would slash state revenue -- $801 million less would become available to the state budget next fiscal year alone -- and Mariano said if the question passes in November "we will have no choice but to make significant budget cuts to services and programs that our residents rely on."
"If they believe, as we do, that the commonwealth can tackle the issues of affordability and competitiveness in a fiscally responsible manner, the House is open and willing to work on solutions to those challenges, together," the Quincy Democrat said of proponents.
Mariano told reporters he thinks a compromise could include "long-term solutions to some of the problems that we have that directly affect the proponents of the question," and specifically mentioned the $2.1 billion Massachusetts needs to pay the federal government over the next decade due to the Baker administration's mistaken use of federal pandemic funds to cover unemployment benefits.
A spokesman for the Taxpayers for an Affordable Massachusetts ballot committee said the question's backers were open to talking with House leaders "with the expectation that any alternative delivers tangible progress on the cost and affordability pressures impacting employers, taxpayers, talent retention, and long-term growth."
The group declined to say whether the campaign would insist that a tax cut be part of any compromise.
Should the tax questions go before voters in November, the union leaders who wrote to Beacon Hill officials Tuesday said they will be ready to wage an opposition campaign. The unions said they "are confident we will have the grassroots organizing and financial resources to defeat the ballot initiatives in November, if still necessary."
"The same unions who committed millions to win passage of the Fair Share Amendment are committed to waging a campaign that is adequate to defeat these destructive tax cut proposals," they wrote.
Aside from a compromise between proponents and lawmakers, there is another way the income tax rate cut question could be eliminated from consideration on November's ballot.
Opponents filed a lawsuit with the Supreme Judicial Court in January arguing that Attorney General Andrea Campbell's summary of the proposal is so flawed and unfair that the measure should be disqualified from the ballot. The unions, which indicated they back the lawsuit as part of a coalition of labor, community and faith groups, wrote Tuesday that they "are confident in the strength of our legal case and believe there is a good chance the income tax initiative will be ruled ineligible to appear on the ballot."
The lawsuit claims the summary fails to make clear that the tax reduction would apply to long-term capital gains income. Campbell's office has argued that it accurately summarized the proposal because the initiative "does not propose to amend the statutes setting the rate of taxation for capital gain income."
The AG's office argued in a brief filed this month with the SJC that the ballot question would directly change the tax rate on so-called Part A and Part B income. Unlike Part A and Part B income, Part C income, which includes long-term capital gains, is not specifically mentioned in the proposed law.
But, Campbell's brief said, there is an existing state law that says Part C income "shall be taxed at the same rate" as Part B income. So while the ballot question would change the rate for Part B income, it would be a different law that actually changes the rate for long-term capital gains, the AG's office said.
"Not only is mentioning how the proposed change interacts with current law not required, it would in fact run contrary to this Court’s guidance on the summary," Campbell's office argued, citing a 1992 decision in which the justices declared that "the Constitution requires a summary of the proposed measure and not of ... existing law."
The brief added, "The summary is intended to be a neutral description of what the measure proposes to do, and not all the ancillary effects that the proponents may or may not have intended the measure to have."
In a footnote at the end of the brief, the attorney general's office wrote that it agreed with the question's opponents that "should this Court determine the summary is not fair and concise, the appropriate remedy is removal of [the initiative petition] from the ballot, rather than alteration of the summary, under this Court’s prior precedent."
Ballot question backers -- a group that includes officials from the Pioneer Institute, Mass. High Tech Council, Mass. Fiscal Alliance and others -- said in their own brief this month that the SJC "has not kept a measure off the ballot due to the Attorney General’s summary in nearly a century" and asked the justices to give the AG a chance to amend her summary if they find issue with it.
"Keeping this initiative off the ballot based on Plaintiffs’ objection to the summary violates the fundamental democratic principles underlying Article 48," the brief said. "The Attorney General, not an initiative petition’s proponents, controls the summary, and here [question proponents] did not propose the challenged language. Moreover, the Attorney General sought to engage any opponents of the measure in the summary drafting process and none came forward. Plaintiffs should not be permitted to override the will of tens of thousands of voters after sitting on the sidelines during the summary drafting process."
Arguments before the SJC are scheduled for May 4.
