Massachusetts Millionaires Tax
January 22, 2018

Massachusetts “Millionaires” Tax Would Tie Legislature’s Hands and Violate Anti-Logrolling Provision: Anderson v. Healey

On January 22, 2018, in conjunction with the Pioneer Institute, a Massachusetts research organization, we filed a brief with the Supreme Judicial Court of Massachusetts arguing that Proposition 80 should not appear on the ballot for violating state constitutional prohibitions on logrolling and usurping legislative control of the state treasury.

Proposition 80 combines three unrelated provisions: amending the state constitution to impose a 4 percent income surtax on incomes over $1 million, designating an appropriation for transportation, and designating an appropriation for education. Drafters of the state constitutional provision on initiative petitions sought to ensure that petitions express a single unified public policy statement that voters could accept or reject, and specifically sought to prevent the bundling of unpopular provisions like a tax increase with more popular ones such as increasing education and transportation funding.

The state constitution also forbids initiative petitions from including a “specific appropriation,” defined as seizing all revenue from a designated source and appropriating it for a specified use – in this case, transportation and education. The provision is designed to ensure that special interests don’t usurp legislative control of the state treasury, and permits the Legislature to act to adjust revenue measures depending on changing circumstances.

For example, in 2014, Massachusetts enacted a badly designed computer and software services tax. When the negative impacts became immediately apparent, the Legislature acted quickly to repeal it. In 2003, a planned state income tax reduction from 5.3 percent to 5.0 percent, adopted by ballot initiative in 2000, was canceled due to reduce revenue collections after the 2001 recession.

Our brief cites a number of cases that support invoking the anti-logrolling and legislative control provisions of the state constitution in this case. The brief also presents evidence of possible economic outcomes if the surtax were to be enacted, to support the argument that the Legislature cannot be precluded from reacting if the tax increase proves unwise. For example, New Jersey officials have backed away from their promise to implement a similar tax in their state due to recent federal tax law changes. There is also much scholarship in California and Colorado decrying the inflexibility of the state budget due to enactments similar to Massachusetts Proposition 80.

The case is Anderson v. Healey, No. SJC-12422.

Banner image attribution: Massachusetts Millionaires Tax

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