If more suits had stepped up, they could have beaten back the millionaires tax. Instead, they were schooled by the teachers unions.
That’s the prevailing sentiment in the business community on why they failed to defeat Question 1, the ballot proposal that will hike the state’s 5 percent tax rate to 9 percent on income exceeding $1 million.
Business leaders acknowledged that the “No” side struggled to recruit enough companies, chief executives, and other heavy hitters to go public with their opposition — and donate to the campaign. A big obstacle: Well-heeled C-suiters didn’t want to deal with potential criticism from employees and customers that they were only looking out for themselves.
Unions — notably the Massachusetts Teachers Association and the National Education Association — bankrolled much of the “Yes” side, raising about $28 million, twice the $14 million their rivals brought in, according to state political campaign filings.
The bounty financed a sophisticated grass-roots campaign that allowed Question 1 supporters to flood TV and social media with advertising, and knock on the doors of more than 1 million voters. Opponents only began airing their first TV ad in September, a month after proponents, and they canvassed just 144,000 homes.
“We needed to raise about $20 to $25 million,” said John Fish, the Suffolk construction CEO who kicked in $1 million to the “No” side and personally made 30 phone calls over the past six months to get others to donate as well.
“There just wasn’t a strong enough rallying cry to raise those types of resources,” he said, noting that only about 1 in 5 of his pitches yielded a contribution.
Fish found that business leaders, especially those running public companies, didn’t want to be associated with the fight against the millionaires tax. This despite concerns that the tax increase could hurt the state’s economic competitiveness.
“The social pressures far outweighed the ability to support this ballot on a ‘No’ basis,” he added.
But the opposition’s problems went beyond money.
The unions mobilized thousands of people to canvass for the Question 1 cause, which had been in the works for eight years. They were part of a broad coalition of community and faith-based organizations that had previously pushed paid family leave and a minimum wage increase into law.
For supporters, it was a do-or-die moment to pass a tax on the wealthy that would generate anywhere from $1.2 billion to $2 billion a year, with proceeds flowing to education and transportation. Five times before, voters had rejected ballot measures to change the state’s flat tax rate.
Supporters had come this far and they weren’t about to lose now. They crafted a simple message: better schools and fixing the MBTA, and 99 percent of us won’t pay an extra nickel.
The measure found the strongest support in progressive cities (Boston, Cambridge, and Somerville) and gateway communities (Malden, Lawrence, and Worcester), where these groups have robust networks.
A few wealthy individuals carried the brunt of the financial burden for the “No” team, including New Balance chairman Jim Davis (who gave $2 million), New England Patriots owner Robert Kraft ($1 million through his company), and power couple Sandra and Paul Edgerley ($1 million each).
But many others just shrugged. Massachusetts companies have gone global, and their CEOs aren’t as tuned into local politics. Plus, they could find ways around the higher tax, or relocate to avoid it, especially after the pandemic proved that people can work from anywhere. Ahead of the election, some executives had already launched Plan B and moved out of state.
In the words of one longtime business leader: “They just didn’t care.”
Meanwhile, proponents of Question 1 built a roster of high-profile champions, among them: Senators Ed Markey and Elizabeth Warren; Representatives Jim McGovern, Seth Moulton, Ayanna Pressley, and Lori Trahan; and Boston Mayor Michelle Wu, Governor-elect Maura Healey, and Lieutenant Governor-elect Kim Driscoll.
Yet America’s most popular governor, Charlie Baker, was mostly missing in action. Baker opposed Question 1 but kept a low profile about it, choosing instead to work behind the scenes and help raise money. The Republican wasn’t seeking a third term and waited until the week before the election to send a blast e-mail via his political committee to urge his supporters to vote “No” on Question 1.
With the ballot measure passing by a narrow margin of 52 percent to 48 percent, a difference of 95,000 votes, many in the business community can’t help but wonder if the outcome would have been different had Baker taken a stronger public stance.
“If you had a Charlie Baker really hammering this issue, I don’t think it would have passed,” said Scott Ferson, a Democratic strategist.
Baker — in response to a Globe reporter’s question — defended his approach to the issue, which was mainly to emphasize how the state has billions of dollars in surplus money and in its rainy day fund.
“I made it pretty clear that I thought Massachusetts was in an incredibly strong financial position,” Baker said on Thursday. “I don’t think we need it, Question 1, and I do worry about the impact it’s going to have on decisions in a very mobile economy that we now live in . . . voters made the call.”
Question 1 opponents also failed to deliver a compelling campaign theme, instead throwing a litany of complaints against the wall and hoping something would resonate with voters.
PR executive George Regan — who is close to Davis, Fish, and Kraft, as well as Baker — said the “No” message needed to focus more clearly on the risk that the state’s brightest workers and most innovative companies will leave. That message — that the foundation of Massachusetts’ knowledge economy was in peril — was diluted as the campaign also warned about the tax’s impact on small-business owners, homeowners, and retirees, as well as concerns that the Legislature would simply shuffle money around, and education and transportation spending wouldn’t actually grow.
“This was winnable,” Regan said.
Matt Stout of the Globe staff contributed to this article.