The state’s highest court on Wednesday rejected a challenge from business leaders to rewrite the summary of a ballot measure that would raise taxes on the state’s wealthiest residents, handing a victory to labor unions, Democratic lawmakers, and others who’ve spent years pushing the measure to a November vote.
In an unanimous decision, the Supreme Judicial Court ruled that Attorney General Maura Healey’s office “fairly” described the thrust of the so-called millionaires tax proposal in both a summary it’s required to prepare for voters and one-sentence statements outlining what a “yes” or “no” vote would do.
The proposal, dubbed the Fair Share Amendment by its proponents, would amend the state Constitution to create a 9 percent income tax rate on annual earnings above $1 million, while retaining the broad 5 percent rate for earnings below that amount.
The measure says that all new revenue from this tax — estimated to be anywhere from $1.3 billion to more than $2 billion annually — would be earmarked for education or transportation, albeit subject to appropriation, or legislative decision-making.
The Massachusetts High Technology Council, which filed the challenge with the SJC, charged that the summary as written was “unfair and misleading,” and argued that a line should be inserted into the summary indicating that the Legislature could ultimately reduce funding for schools or transportation needs from other sources and simply replace it with the new surtax revenue.
The SJC disagreed.
“[The] Attorney General’s summary need not opine on whether, as plaintiffs contend, monies that historically have been spent on education and transportation could, at some future point, be spent elsewhere,” Justice David A. Lowy wrote for the court. “The summary need only describe the amendment itself; we hold that it does so fairly.”
The court case marked the latest challenge to the high-profile proposal. But unlike in 2018 — when the Supreme Judicial Court rejected an earlier iteration of the measure — it was not being asked this time to bar it from the ballot.
Business leaders have repeatedly challenged the assertion the money would go toward education and transportation as promised, noting that the phrase “subject to appropriation” gives the Legislature wide latitude in deciding the fate of funding.
The debate dominated oral arguments last month. Lowy at one point asked an assistant attorney general whether it would be helpful to let voters know that lawmakers could also reduce or expand funding in certain budget categories.
“What if we were concerned that just ‘subject to appropriation’ is inside baseball language?” Lowy asked.
Ultimately, the court felt it was enough as part of what the Constitution requires to be a “fair, concise summary.”
“Given the balancing act required, as well as the fact that the Attorney General is a ‘constitutional officer with an assigned constitutional duty,’ we give deference to the Attorney General’s exercise of discretion in crafting a summary,” Lowy wrote.
Supporters of the millionaires tax proposal cheered Wednesday’s ruling. Steve Crawford, a spokesman for the ballot campaign, called it a “victory for everyone who wants Massachusetts to be a place where the very rich pay their fair share to make our schools great and our roads and transit safe and efficient.”
Reactions among critics were more mixed. The Pioneer Institute, a libertarian-leaning think tank whose legal arm filed a brief in support of the court challenge, said the SJC “missed an opportunity” to better clarify the question for voters, arguing many may not fully realize its implications for business owners and others.
“Voters should never be surprised,” said Frank J. Bailey, president of PioneerLegal.
Chris Anderson, president of the Massachusetts High Technology Council, said the group was disappointed the court rejected its request to reshape the summary. But he said it also felt the case accomplished the goal of highlighting its main argument: that there is “no guarantee” the Legislature would increase total funding for education and transportation should the measure pass.
“The point here was to shine a light on the true nature of this amendment,” Anderson said, “which is, when you boil it down, really just a tax enshrined in the state Constitution.”
The proposal is expected to spark a contentious, and expensive, campaign into the fall. A labor-backed coalition, known as Fair Share Massachusetts, is helping spearhead the push behind the measure, which already got $101,000 of in-kind support from the Massachusetts Teachers Association, according to the most recently available fund-raising records.
Several business groups and leaders who opposed the 2018 measure are signaling they’ll again work against it, including Associated Industries of Massachusetts, and Putnam Investments CEO Bob Reynolds, who gave $200,000 to the Coalition to Stop the Tax Hike Amendment, the formal opposition committee.
The proposal has traveled a long legal path. The SJC rejected a citizen-submitted version of the measure before it could make it to the 2018 ballot, ruling it was unconstitutional because it combined multiple subjects — spending on transportation and on education, as well as the income tax surcharge — that were not related. The Mass. High Tech Council led that challenge before the SJC as well.
Lawmakers later took up the mantle, passing it in two consecutive sessions, including last June, to put it on the November ballot.
Referendum language submitted by state lawmakers, instead of citizens, does not need to pass the so-called relatedness test that tripped up the proposal four years ago and proved the legal undoing of another high-profile measure this year that could have reshaped how gig economy workers are classified in Massachusetts.