The two sides squaring off over the so-called “millionaires tax” ballot question are essentially neck-and-neck in fund-raising in 2022, with both the pro- and anti- campaigns raising close to $10 million so far this year.
Campaign finance records made public on Friday provide the first glimpse of how much the two ballot committees fighting over Question 1 have raised and spent this year as they gear up for a statewide vote in November on a constitutional amendment that would add 4 percentage points to the state’s 5 percent income tax for earnings over $1 million. The proceeds, projected at between $1 billion and $2 billion a year, would go to education and transportation.
The release of these records coincides with the opponents’ launch of a TV ad campaign on Monday aimed at making the case that the tax could hit middle-class people and small-business owners, not just “millionaires” as the nickname implies. Meanwhile, Jim Stergios, executive director of the Pioneer Institute, wrote a column that appeared in the Wall Street Journal opining that this surcharge threatens to make this state “Taxachusetts” again.
The supporters began their own TV campaign about a month ago.
A Suffolk University/Boston Globe poll in July, held before these TV ads began airing, showed 56 percent of respondents support the surcharge, with 36 percent opposed and 8 percent undecided.
The Fair Share Massachusetts campaign, which supports the surcharge, raised $9.9 million this year so far and has spent about $7.3 million, making the case for what it calls the “Fair Share Amendment.” Most contributors kicked in $50 or less, but the majority of the funding came from teachers’ unions. The Massachusetts Teachers Association gave $4 million this year, as did the National Education Association. Several other labor groups, including the Massachusetts AFL-CIO and the Service Employees International Union Local 509, contributed much smaller amounts.
The campaign also received about $1.5 million worth of services from a number of activist organizations, ranging from the Boston Affordable Housing Coalition to United Interfaith Action of Southeastern Massachusetts. Much of this work was focused on door-knocking and phone calls to build support.
Lillian Lanier, the Fair Share campaign’s field director, said in a statement that her team is making the case that the ballot question will only affect “the super rich who earn over $1 million a year.”
“In neighborhoods all across the state, we are having face-to-face conversations so voters understand that Question 1 means a fairer tax system and better schools, roads and bridges,” she said.
Critics, though, say the income tax surcharge will hurt Massachusetts’ competitiveness and spur entrepreneurs and companies to grow elsewhere. And some of the biggest names in Boston’s business community are financing the opposition with million-dollar contributions.
Suffolk Construction, led by John Fish, and Rand-Whitney Containerboard, Robert Kraft, each gave $1 million to the Coalition to Stop the Tax Hike Amendment, helping the group raise $8.6 million so far this year. So did New Balance chairman Jim Davis. Paul Edgerley of Bain Capital and Sandra Edgerley, philanthropist and cofounder of the Boston social club ‘Quin House, each gave $500,000 apiece. And three real estate companies owned by Granite Telecommunications president Rob Hale gave a combined $1 million as well.
CrossHarbor Capital Partners, a Boston investment firm, also gave $500,000. And State Street chief executive Ron O’Hanley and Vertex Pharmaceuticals executive chairman Jeff Leiden — who, like Fish and Kraft, are members of the Massachusetts Competitive Partnership, a group of CEOs — gave $100,000 and $25,000, respectively.
“We’re optimistic we’ll have the resources to win this campaign,” said Dan Cence, a spokesman for the anti-tax committee.
The anti-tax coalition’s ads focus on the surcharge’s potential impact on small-business owners and homeowners, particularly if they choose to sell their business or real estate and receive a one-time windfall as a result.
“Politicians are pushing a tax hike on the November ballot,” cranberry farmer Leo Cakounes says at the start of the ad. “That makes no sense.”
November’s vote will be the culmination of a years-long debate.
The surcharge proponents at the union-backed Raise Up Coalition initially tried to get this tax increase on the ballot in 2018, and have been raising money for the cause for several years. But five business groups fought back with a legal challenge, and the Supreme Judicial Court eventually sidelined Raise Up’s effort, ruling that a citizens’ initiative could not involve unrelated issues — in this case, an increase in income taxes for high earners, and an increase in spending on education and transportation.
So the supporters regrouped, and filed the 4 percent income tax surcharge as a legislator-initiated amendment instead, in time to get it before voters in 2022. Because a change in the income tax requires a constitutional amendment, the Legislature needed to vote twice to approve the measure, before it could appear on the ballot this November.