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Constitutional Convention
H-3933 the 6th proposed Graduated Income Tax
(aka, the "Millionaire's Tax" aka, the "Fair Share Tax")
Wednesday, May 18, 2016

The Proposed Initiative Amendment

Amendment Article XLIV of the Massachusetts Constitution is hereby amended by adding the following paragraph at the end thereof:

To provide the resources for quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes. In addition to the taxes on income otherwise authorized under this Article, there shall be an additional tax of 4 percent on that portion of annual taxable income in excess of $1,000,000 (one million dollars) reported on any return related to those taxes. To ensure that this additional tax continues to apply only to the commonwealth’s highest income residents, this $1,000,000 (one million dollar) income level shall be adjusted annually to reflect any increases in the cost of living by the same method used for federal income tax brackets. This paragraph shall apply to all tax years beginning on or after January 1, 2019.

Petitioners: Marven-Rhode Hyppolite, Mary Ann Stewart, Rebecca A. Cusick, Arnold Hiatt, Barbara Ann Mann, Sigute Meilus, Deborah L. Frontierro, Mary Clare Higgins, Jose A. Encarnacion, Kirsis Rafaela Nina

The below transcript is provided by the State House News Service

CONVENES: President Rosenberg banged the gavel at 1:07 p.m. and asked members and guests to rise for the Pledge of Allegiance.

PLEDGE: Members stood and recited the Pledge of Allegiance.

President Rosenberg said, Pursuant to an order, the two houses are in a joint session for various constitutional amendments.

MILLIONAIRE'S TAX: The Question came on agreeing with H 3933 for a legislative amendment to the Constitution An Initiative Petition for an Amendment to the Constitution of the Commonwealth to Provide Resources for Education and Transportation through an additional tax on incomes in excess of One Million Dollars.

Senate President Rosenberg recognized Rep. Kaufman.

Rep. Kaufman said, Thank you, Mr. President and let me begin for thanking you for your passionate leadership to move us to a fair and equitable tax system. I am hopeful and optimistic we will see you rewarded for your longstanding efforts.

Senate President Rosenberg asked members to take their seats and subdue their conversations.

Rep. Kaufman said, Thanks to the votes we will take today the citizens can address on Nov. 6, 2018, exactly 902 days from today, to amend the constitution with the fair share amendment. That amendment is not to the document you see over my head here, but to a 1918 amendment that prescribed a uniform rate of taxation. Whatever the intentions of that in 1917, it is having negative consequences for us in 2016. We have an unsustainable tax system, we cannot raise the money we need to provide fundamental services. No one would argue education and transportation are anything but the primary responsibility of state and local government, and we have reams of evidence that those areas are underfunded. A recent commission looked at our needs in education and found us short of the mark. We do not have universal pre-K, we do not have a system that allows residents to graduate without enormous debt. Why is the amendment called the fair share amendment? Because we cannot fix our revenue problem without raising taxes in a way that disproportionately impacts the citizens. If you're among the poorest, you're dedicating about 11 percent to state and local taxes. The middle class pays about 9 percent. The wealthiest are paying under 5 percent. We have a regressive tax system and anything we do would hurt those who can least afford it. To my way of thinking that is unfair and unsustainable. The amendment comes to us at the intersection of these two problems. Happily, the Raise Up Coalition has brought us a fix we can adopt in our vote today. We owe them an enormous debt of gratitude. I hope you will join me in thanking them and rewarding them for their important, good and valiant effort with your vote at the end of the day to reject the amendments we will get to soon and then to advance the amendment.

Senate President Rosenberg recognized Sen. Tarr.

Sen. Tarr said, Thank you, Mr. President. I want to first congratulate you and the speaker for the fact that we are actually here having debates about important matters, I hope that fact is not lost. I do think it's important and a sound thing that we gather here to talk about a matter of importance. I want to commend the gentleman who just spoke for his commitment to trying to address the many needs of the commonwealth and his sincere belief in the matter he puts before us today. It has been some time that folks have been trying to divine a way to develop a graduated income tax, and it is significant that each time it has been offered to voters it has been rejected soundly. The challenge was to find a way that it would be of political acceptance given that voters time and time and time again reject it. I congratulate the gentleman for his creativity. As I understand it, this new tax could raise taxes by $2 billion. There have been some gymnastics here, they have been very creative in trying to get around certain constitutional provisions.

Senate President Rosenberg recognized Sen. Humason, who asked that the joint session be called to order.

Senate President Rosenberg asked members to subdue their conversations.

Sen. Tarr said, Thank you for importing the concept of a purple tie to this rostrum, Mr. President. There is a challenge here because the proponents of this measure know there are items excluded from consideration in the initiative petition process. Very carefully they created a concept. On one hand, supporters suggest it does not usurp the Legislature's right to impose a tax rate. They also stand before us and say, don't worry this money will only be spent on education and transportation. Those two statements cannot be reconciled. Either it requires spending in an instance, which violates Article 48, or it does not. I know there are scholars who will cite a particular case from the not so distant past related to the highway fund, but we all know that is distinguishable because there was a fund in existence already. The question before us offers grave doubt as to its constitutionality. I hope we would seek the opinion of the SJC as to whether the question is constitutional. I hope we will do that and I know the gentlemen who just took his seat would not want to miss and opportunity to have a question that could go to the voters vetted by the SJC. I hope he will also take time to understand some of the impacts of the question he puts before us. It would be interesting to think about from the prospective of fiscal stability that the proponents have identified two areas in need to additional spending. Yet, he's isolated a select group of taxpayers who happen to be among the most mobile in terms of moving capital and their residence to avoid taxation, if those are so important why place the funding of them within a group of people who have the ability more than any other to avoid taxation by using several methods to do so? Rather than creating budgetary stability, this measure would do exactly the opposite. We saw a similar situation when we sought to isolate the capital gains tax because of its volatility. That brings us to one of the fundamental issues. The issue in this case is the fact that we have for decades embraced the theory that all citizens are equal and taxation will be applied equally. We believe so much in that that we would ensconce it in a constitutional provision, one that has withstood attack time and time and time again. If we need additional revenue, how easy is it to say let's have that group of people pay for it because they must be rich. Apparently none of them are working hard enough to gain capital to deploy economic opportunity for others in the commonwealth and aren't already paying a large sum of the commonwealth's bills. This would send the message that if you're successful, you will be rewarded with an almost doubling of your taxes. Notwithstanding all of that, there is a divide and conquer mentality that we will impose a penalty on the ability to generate $1 million in income and single them out as responsible for transportation and education. This state has many other needs. It flies in the face of the notion of equal treatment of taxpayers and it flies in the face of the notion that we are a commonwealth, all of us in this together. Now, I am told that visual aids are not permitted in the chamber and that is unfortunate. One would have indicated the growth in state spending and revenue. So for those who suggest we are not generating enough revenue, I suggest that in many instances state spending is not matching state revenue growth. If there is a belief we need more dollars, I ask why there is a positive delta between spending and revenue. So clearly we are generating large sums of revenue and I do not recall a budget that spent less in on year versus another. I recall in state budgets routinely a reliance on a surplus, one that is so dependable that we actually pre-appropriate it before it even materializes. For those who suggest we need more revenue, then why do we continually produce budgets that have alternative ways of spending money by pre-appropriating surpluses that do eventually materialize. It is easy to say that there is a revenue problem and leave on the table important reforms which create more sustainability for the long term, like not building a convention center, managing better the MasHealth program. I offer you specifically the situation at the MBTA, where the administration has been able to achieve significant savings in operations which will benefit the capital needs we need to meet. It is difficult to accept that we would chose to import into our tax code the kind of volatility that will result from this. We all know that if this is to pass, immediately the planning will begin on how to spend the revenue that is anticipated. That spending will likely occur, but what is uncertain is what will occur relative to the behavior of those being singled out for this additional tax burden. What would happen if there is migration? If you want to roll the dice and take a chance with a penalty on success, if you want to take a chance on increasing state spending with an unpredictable revenue source, if you want to take a chance on not treating people equally relative to the tax code, if you want to take a chance on a question that seems to be unconstitutional. I suggest to you the benefits are not outweighed by the risks. We are engaged in tax increase gymnastics and I hope we would see the hoops for what they are and allow the tax code to operate as it has. Thank you, Mr. President.



TARR AMENDMENT 3 -- Supermajority vote for utilization of rainy day funds

The question came on an amendment filed by Sen. Tarr, with a further amendment from Sen. Tarr pending.

The further amendment was REJECTED. The underlying amendment was REJECTED.




The question came on an amendment filed by Rep. Jones, with a further amendment from Rep. Jones pending.

Senate President Rosenberg recognized Rep. Jones.

Rep. Jones said, In these amendments, we seek to strike the language of the underlying amendment before us and insert an income tax rate of 5 percent. We propose that because that is what the voters of the commonwealth voted to do 16 years ago this November. So much has been said about the will of the voters, the voters will have an opportunity to speak. The last time they spoke on the income tax rate, they said they wanted 5 percent. Some will speak of the people who signed this initiative petition and I would say 1.5 million voted in 2000 that the tax rate on income should be 5 percent. For those people in support of the amendment, trying to convince this is the right policy for the state because we need revenue and we will in fact spend that on transportation and education is basically an exercise in 'trust me, trust the Legislature.' In 2000 we thwarted the will of the voters and we did something differently, yet here we are again telling the voters to trust us. On the tech tax in 2013, we passed a policy that we really had no clue as to the impacts. Fortunately when the folly became clear we were able to reverse course. With a constitutional amendment, we won't be so lucky. Let's start this debate by honoring the will of the voters, the clear and vast majority of which said they wanted a 5 percent income tax rate. It's very clear, 1.5 million voters. Once we ensure they can trust us by virtue of respecting their will, then we can have a debate about revisiting tax policy. Why should the people who proposed that initiative in 2000 become second class to those people who signed this initiative petition? That's not right, Mr. President. I hope the further amendment passes.

Rep. Jones asked for a roll call vote. There was consent. Time was 1:42 p.m.

Sen. Rodrigues of Westport said it feels good to be back at this podium. It's been a number of years. I rise in opposition to the further amendment. The question before us today is not on the merits of whether we should institute a 4 percent surtax on those making above $1 million, whether we should institute that on .5 percent of people. The question is, are we going to uphold the will of the people. This is a citizens-sponsored initiative. People took the time to sign this and put this before the Legislature. Are we going to move this question to the next Legislature? The referendum would appear at the earliest in November 2018. We do not usurp the will and the desire of all the advocates and the 157,000 citizens that took the time to sign this petition. Now the measure before us is also bad in substance. I have served as Senate chair of the Revenue Committee. We have coupled at all times federal and state tax policy so tax filers can have clear concise consistent information and policy so there's not one set of rules for the feds, a different set for the state. The measure as proposed by petition is very clear that the tax rate be 4 percent on those above a million dollars and it does not touch the Part A income tax that is set by statute. The voters voted to reduce that tax rate to 5 percent. By two years it will be at 5 percent. To codify this in the constitution and prevent citizen action is a great mistake.

Rep. Diehl of Whitman at 1:47 p.m. said, When over a million people voted to repeal the indexing of the gas tax, it was defeated in this Legislature. The will of the people was overturned then. This tax has been defeated five times previously. It is recognized as a graduated income tax. People are still waiting for 5 percent. Money will be fleeing the state. People with high incomes start and invest in small companies. Take away incentives to invest and you drive jobs out of the state. 31,000 people making over a million dollars in Maryland moved out. The state lost revenue. The failed tech tax would have driven jobs out of state. In our constitution referendums cannot earmark appropriations. Make no mistake, the General Court will be free to spend this as they wish. This is nothing more than a bait and switch to open up tax rates for different income levels. California now has ten income brackets. Someone earning $28,000 will pay 6 percent. And New York has eight income tax brackets. Keeping the money you earn is a fundamental right in America and that argument began right here in Boston before this country was founded. This further amendment should be rejected. Massachusetts has a flat tax. What is more fair to everyone than paying the same rate? I hope the underlying amendment is adopted.

The roll call opened and Sen. Rosenberg was immediately recognized and voted no. New Sen. Boncore voted no as well. New Sen. O'Connor voted yes.


The underlying amendment No. 6 was REJECTED on a voice vote.


Question came on a Jones further amendment 7.1, which said: “All Part B taxable income, as defined by Section 4 of Chapter 62 of the General Laws, as appearing the 2014 Official Edition, equaling less than $1,000,000 shall be taxed at the rate of 5 per cent for tax years beginning on or after January 1, 2019.”.

Rep. Jones said this amendment is similar to the previous amendment but this perhaps will prove to be the best of both worlds for some here.

Rep. Poirier said she was having trouble hearing. Senate President Rosenberg asked members to subdue their conversations.

Rep. Jones said Thank you Mr. President. Unlike the previous debate which sought to strike out a proposed initiative amendment and replace it with a 5 percent income tax, this does not propose to strike out the so-called millionaire's tax, but it does seek to say the tax rate on other income will be 5 percent. Perhaps this is the best of both worlds. It would allow for those of you who support it, the so-called millionaire's tax to go forward but also set the income tax rate at 5 percent. In the year 2000, a million and a half voters asked that the income tax rate be 5 percent. Thousands of people got signatures in 1999. The Legislature, in 2002, thwarted the will of the people. This is the opportunity to respect the will of the people in 2000 as you go back to those same voters and say we want to tax incomes over a million dollars at 9 percent and please trust us to spend that money as proponents represent that it will be spent. By voting in the affirmative, you can respect the will of the voters from 2000 and move forward with your proposal to tax incomes over a million dollars at 9 percent and you can encourage the passage of the underlying proposal by showing the voters you have finally expressed a willingness to adhere to what they voted for in 2000. A trifecta, if you will. Respect the will of the voters, still be able to go to them with what you want, and demonstrate to them, albeit late to the party, that you will finally respect their will. I hope the amendment is adopted.

Rep. Jones requested a roll call vote. There was support.

Rep. Kaufman said first let me say I have both enormous respect and appreciation for the minority leader and appreciate his remarks, although I disagree. I know that comes as a great surprise. We have honored and trusted the will of the voters, as my co-chair said. We will be at 5 percent as the voters have asked within two years. There is no question that we can and do honor the will of the voters. The Senate minority leader raised serious questions about what is appropriate in the constitution and what belongs in the constitution. I respectfully submit that setting a tax rate does not belong in the constitution. The 4 percent in the proposal before us is a delta, a difference. It is not a rate and the proponents of this constitutional amendment have been very careful not to do that, thinking as I do that it would be inappropriate to the constitution. There is a specific reference to statute, and that too is inappropriate to the constitution.

Rep. Stanley said My friends on the other side of the aisle are constantly trying to change the narrative. We've had a record number of citizens sign a petition to get this question on the ballot. This is a procedural vote to assist the will of the voters. If you want to talk about what the ultimate passage would do, then you have to consider voting against it would be voting against money for local aid, public education and to fix our transit issues. I get a little tired sitting there listening to the rhetoric about tax votes and the will of the voters.

Sen. Tarr asked Rep. Stanley to yield for a question. Rep. Stanley said he would not yield.

Rep. Stanley said Thank you Mr. President, I'm all set.

Sen. Tarr said I wish the gentleman had stayed for a question so we could have the kind of dialogue I hope we would all aspire to. I will ask my question anyway, and that is are all measures which gather sufficient signatures considered just to be a procedural vote in the constitutional convention? We extensively debated equal marriage and whether it should be on the ballot. I would ask my good friend if that was a procedural question or substantive question.

Rep. Lyons said Apparently there's a new definition that the chairman, my good friend from Lexington, has just decided that following the will of the people is waiting 18 years to reduce the rate to what was voted on 18 years ago. I suggest that when we are elected in November we follow the will of the people and don't seat new people for 18 years. Making that argument is simply ludicrous.

Rep. O'Connell said I rise in favor of the amendment. We have the best of both worlds here. You are getting what you want and the voters finally are getting what they want. We keep hearing people talking about the will of the voters which seems arbitrary and like lip service. It seems like everyone is going to pick and choose when to follow the will of the voters.

BY A ROLL CALL VOTE OF 42-147, the further amendment was REJECTED.

The underlying amendment #7 was REJECTED on a voice vote.

Amendments 8, 9 and 10 were WITHDRAWN.

RECESS: Senate President Rosenberg said the convention would stand in recess. Time was 2:23 p.m.

GUESTS: Speaker DeLeo introduced the 2016 Miss Massachusetts princess, visiting the chamber as a guest of Rep. Rogers, Rep. McMurtry and Sen. Timilty, and Miss Massachusetts junior teen, a guest of Rep. Muratore and Sen. deMacedo.

RETURNS: Senate President Rosenberg called the convention to order at 2:25 p.m.

JONES AMENDMENT 11: Appropriated Funds

Rep. Jones said One of the themes running through the debate is that the additional money raised through this amendment will go to education and transportation. If the DOR estimates and the commonly debated number of $1.9 billion is right, you would see that money if the Legislature follows through. There's debate about whether we're obliged to follow through. Taking proponents at their word, another important part is to make sure that money spent on transportation and education should be in addition to the money we already spend on those areas, and not in lieu of. If you look at what we currently spend, it's probably in excess of 7 or 8 billion dollars. This amendment seeks to make sure the money is spent, if this initiative proposal is passed by the voters. The crux of the amendment is to make sure the funds raised does not supplant money we're already spending on education and transportation. It's pretty clear. Addition to, and not in lieu of. For the proponents of this underlying proposal, within this chamber and outside, if we truly want to represent to voters that this really isn't a Trojan tax horse, that this is as intended, we should vote for this amendment and maintain our commitment. Part of the reason I offer this is I had a conversation with a proponent and I asked, do you feel we're obliged to spend this money in addition to, and they said, well, you're not obliged to. Already starting to bob and weave, offload the Trojan horse. It looks great, only to find out it isn't as represented. Oh well, too bad, so sad, go complain to somebody. If you really believe the campaign rhetoric and you believe in it, then you absolutely should support this amendment. Absolutely. I would say this makes the most sense of any further amendment to the underlying amendment today.

Rep. Jones requested there was a roll call vote. There was support.

Sen. deMacedo said I want to congratulate the gentleman from North Reading in regards to this amendment. I see this as an opportunity for us to come together, those in opposition and those of us for the underlying amendment. This is exactly why the proponents are talking about it. THey're talking about this because the money they say will go directly to education and transportation. Here is your opportunity to send a message to voters by putting that in writing. That will at least send the message it isn't going to be diverted, that we know anything raised from this particular taz will go directly to education and transportation. This is an excellent idea and an opportunity for all of us to come together. This is probably the only time we'll get a unanimous vote in a constitutional convention.

Sen. Rodrigues said I hope this amendment is not adopted. Sen. deMacedo groaned.

Sen. Rodrigues said please vote for this constitutional amendment because it clearly states in the underlying question that all the revenue raised by this surtax goes exclusively to education and transportation. When we talk education, we're talking all education, not just Chapter 70, where we know we'd love to do more.

Rep. Jones asked Sen. Rodrigues to yield. Sen. Rodrigues did not yield.

Sen. Rodrigues said I will be brief so the gentleman can take the microphone. The question is very clear that the revenue raised by this fair share tax amendment and the surcharge can only be used exclusively for education and transportation. When I say education, I mean all of education.. We struggle every year to increase Chapter 70. I will argue we have not adequately funded our higher education institutions. Each one of us hears often from our constituents whose children are struggling with debt, sometimes six figures, when they graduate. The fact that we do not offer universal preschool, something everyone will tell you is critical. This constitutional amendment is very clear. Those of us who have been waiting for years for South Coast Rail, the Green Line Extension, our crumbling roads and bridges we cannot pay for -- that's where the money's going to go. It makes no sense for it being redundant. If we adopt this amendment or any other, than this question before us is no longer a citizens petition. It becomes a legislative initiative and all of the hard work of the advocates that went out and collected 157,000 signatures to carefully draft a piece of legislation they would like to see approved, this would not. I hope this amendment is not adopted.

Rep. Jones said I hadn't planned on speaking again until I heard the remarks from my good friend. You said the $1.9 billion, the DOR midpoint, would be spent on education and transportation, and listed a litany of things that money could go to. I don't know if he misunderstood or didn't listen to what the underlying amendment said, that that money should be in addition to the money we spend on education and transportation now. Without this amendment, what I predict will happen, and will happen constitutionally, is that the money we currently spend will be siphoned off elsewhere, but we'll spend this $1.9 billion and tell the voters we complied with what you voted for, but guess what? You can't trust us. The track record of the Legislature proves that point. The only argument not to approve this is that it goes from 50 votes to 100 votes. I've been looking at the roll calls and guess what? You've got the votes. More sure than a hot knife through butter on a hot summer's day, it's going through here.

Rep. Poirier said voting in favor of this amendment legitimizes the actions we're taking today. This is insurance for our voters whose schools are struggling. It lets them know we are people of our word, that we truly want this additional taxation money to go to schools and transportations. It is true what the gentleman from North Reading said. We're telling them this money will go, but what will happen to the money we provide in our budget any year? That money can go to anything we choose, subject to appropriation. The voters are being fooled because they believe we're going to spend this additional $1.9 billion on top of what we already spend. Let's vote for this amendment and give them the insurance that that is what we are going to do. Otherwise, it's a shell game.

Sen. Spilka said we are here today to talk about taxes but also to have a larger conversation about how we best care for the commonwealth, and create a commonwealth that can thrive. Yesterday the Senate Ways and Means Committee released its budget recommendations with the theme of investing for a resilient commonwealth. I stated the creation of a Massachusetts state budget is an annual act of faith in our collective future and an acknowledgement we need each other. Taxes provide the revenue that allow us to act on our values. We make decisions about how we invest in ourselves and our future. The conversation is more important than ever as you hear stories of how the middle class and working families are falling behind while top earners feel no or little pain. This isn't just in Massachusetts. It's across the nation and part of our presidential campaign. The argument proponents put forth is that high earners, who are the biggest winners in the economy, have the ability to pay more for the investments we need to make. We must invest in our children's education and our infrastructure. To change the conversation about working families, we must make for we have quality education, affordable higher education and a transportation system that lets people go to work and lets our seniors go to their doctor's appointments. I've argued time and again that nothing is more important than the quality of our education system, which needs to keep up with the rapidly changing world. All students need a well-rounded education, and we need to reinvest in these programs now. We also need to invest in a world-class public higher education system to make it affordable to middle and working class students. Before 1987, a student working a minimum wage job could pay their way through UMass Amherst with no debt. Today, the average UMass Amherst student who takes out student loans graduates with over $30,000 in debt. The seeds of resiliency are planted in the first five years of life so we must invest in early education. Income disparities are evident at 9 months and larger at 24 months. We can and must do better for our youngest children. Our transportation network is stuck in the last century. According to the Boston Globe, 446 bridges are considered structurally deficient. These issues are not going away. In fact, year by year, they're getting worse. People hate taxes, we get it. But people should also hate the idea our children may not be getting an adequate education. They should hate the fact their loved ones may waste hours of their lives commuting and going on unsound bridges. We have seen steady declines in revenues, particularly in business taxes. We're also in the process of reducing our income tax. We have also seen families and employers decrying the state of our education and transportation. There has to be a balance, and I believe this initiative strikes that. I'd like to address the concerns of how revenues should be used. The language of this ballot initiative clearly mandates the revenues should be used for education, college, roads, bridges, and public transportation. It's subject to appropriation. The revenues have to be expended as specified. I believe we will continue to do that. This again is a citizen's petition. I would urge my colleagues to let this go forward without changes and let the citizens decide. I hope this amendment is not adopted.

Rep. Balser said I'd like to underscore a point made earlier. If we adopt any amendment today, any amendment, this will no longer be a citizens petition. I say that because some amendments, some of us are going to feel some sympathy for. I respect that the makers of this amendment want to say, we really mean it that we want it to go to education and transportation, and I think we all really mean it. While there may be some sympathy for this amendment and others, I want to remind my colleagues that adopting any amendment will take this away from the very impressive popular movement that has developed in this state, a movement driven by concern for the growing income inequality in our state and our nation. A movement that totally armed by volunteers collected a record number of signatures. Any of us could tinker with that process, but I would urge my colleagues to resist that impulse and support this extraordinary popular movement of the people of Massachusetts, who want the state to live up to its ideals of equality, fairness and world-class public service. I would urge you to reject this and all other amendments today. Let's support the people moving to the ballot a really important fix to what ails our commonwealth.

Rep. Frost said I rise in support of this amendment. I want to make it clear that nothing in the underlying constitutional amendment offers an ironclad guarantee that revenue raised will go to education and transportation. I realize it says it, but the term "subject to appropriation" is very important. It means a future Legislature, should this become the law of the land, doesn't have to truly honor it. Time and time again, when the people have voted for certain things, the Legislature has altered it or didn't honor it. When you change it through the constitution, it takes a whole constitutional process to change it back. This amendment seeks to do its best to live up to what I believe the folks who put this forward truly want and what the general public is being made to believe it will perhaps have the opportunity to vote on. Those who maybe replace us in years to come could say hey look at this revenue we generate. Well, let's broaden the term of education or transportation, or better yet, we'll make sure this money goes to transportation and education, but we'll make sure that it backfills what we already need to pay and we'll use money elsewhere for other priorities the Legislature at that time has. This may not be a commitment at all. The underlying amendment may not be a commitment to additional local aid or to fix bridges. It may never go there, because there's nothing in the language that gives a 100 percent guarantee to the voters that will happen. Some will question whether we'll even raise $1.9 billion or what have you. It could cause an exodus of people, and those are concerns too we should take into account. We may not even have this great pot of money or resources that's being envisioned. I know our constituents are being told this will be a great panacea. But there's no guarantee it will. If we support this amendment we are at least making it clear to a future body this money should be in addition to funds we're spending today.

Rep. O'Connell said, We didn't hear concern when there was a chance to repeal the automatic gas tax increase. I expect to see all green lights – a unanimous vote on this. If we don’t that seems hypocritical. This is what the constitutional amendment is all about – funding for our education and our roads. It is not clear by any stretch that the money will be used for transportation or education. It will be a free for all. It will be a new piggy bank. You're asking people to trust a Legislature.

Rep. Diehl said, I wonder if anyone remembers an underground storage tank fee that was raided in the 1990s. There was a solemn vow that the fee would go for environmental problems, but it was raided. We should be trying to rein in spending on roads. We spend $685,000 per road mile every year while other states spend $145,000 per road mile where conditions are similar. Bridgewater State was mentioned. Maybe gratuitous sick time payments shouldn't be given out. I think this amendment is appropriate.

Rep. Barrows said, I heard my gentlelady colleague from Newton say this could be sympathetic and this is one of responsible governing. We owe it to the people to be absolutely honest with them to say as amendment #11 says that the money will go to education or transportation – to give them the hard fast truth that that is what will happen. I think we owe it to the members of the Commonwealth to be repetitive, to say it twice, to write it down. If it passed, I would support the amendment going to the voters.

Rep. Gregoire said, I've become an expert on underground storage because of a spill in my district. I think the families would disagree with him as $1.5 million has been used. While some of that money could be inaccessible, the fund is working.

Rep. Diehl said, Therefore I look forward to the representative's yes vote on this amendment.

President Rosenberg said, The chair would remind the members that this requires three quarters of those present and voting to be approved.

President Rosenberg voted no as the roll call opened. Time was 3:06 p.m.

Speaker DeLeo asked court officers to summon the members for a roll call on amendment #11. Time was 3:09 p.m.

BY A ROLL CALLVOTE OF 54 to 138 the amendment was REJECTED The House voted 46 to 106

President Rosenberg said, There are three remaining amendments, two of which have been withdrawn.

DOOLEY AMENDMENT #13: Question came on an amendment titled Combined Income Tax Rate.

Rep. Dooley asked for a roll call. It was so ordered.

Rep. Dooley said, This amendment is very simple and it makes this tax – extra tax – fair. Currently there are multiple levels of taxes in Massachusetts on specific forms of income. This addition of 4 percent would further penalize business owners. In 2003 this August body decided that S corporations –

Rep. Lombardo said he couldn't here the gentleman at the microphone.

President Rosenberg said, I’m sure he has something worth hearing. The chair recognizes the gentleman in the attractive bow tie.

Rep. Dooley said, This body decided S corporations that have large amounts of money flowing through – whether it's food or automobiles – they are required to pay an additional tax. This was 2.85. So people who owned an S corporation paid an 8 percent income tax to Massachusetts. They would now pay 12 percent. Furthermore this amendment to the constitution does not break out the different levels of income tax. We have a tiered system on passive income. So if you have a short-term capital gain under one year and that is over $1 million, if you sold property or stock, your tax rate is 16 percent. It goes from 12 with 4 on top of it. That is unacceptable. This amendment caps it at 9 percent. You will pay a 9 percent tax over $1 million. That is going to drive entrepreneurs from our state.

Rep. Kaufman said, Let me pay tribute to the gentleman who preceded me. I urge you to vote no. If the argument sounds familiar, it's because we already debated it. We didn't want to put a tax rate in the constitution.

Rep. Dooley said, I appreciate the point. This does not set tax rate, it just caps the maximum amount that can be charged at the 9 percent.

Rep. Vieira said, I was so heartened to hear the gentleman say we should not be setting tax rate in the constitution, and our underlying amendment sets the increased rate for over $1 million at 4 percent. So I wholeheartedly agree that we shouldn't be setting tax rates in the constitution and I look forward to the gentleman voting against the underlying amendment.

President Rosenberg said, I would remind the members if you are in favor of the amendment vote yes. If you're opposed vote now and it takes three quarters.

President Rosenberg voted no as the roll call began. Time was 3:23 p.m.

BY A ROLL CALL VOTE OF 39 to 153 the amendment was REJECTED. The House voted 33-119

President Rosenberg said, Amendment #12 was withdrawn, so all amendments have been disposed of. We return to the underlying question.

Rep. Nangle said, I wasn't going to speak today on this issue on the main question but I received several calls and emails. I felt compelled to make some remarks. In my opinion tax policy in the Commonwealth should be set by the Legislature. It is our responsibility. In order to do that we need to weigh the needs, and make difficult decisions about spending and how we pay for that spending. We've all seen programs that deserve more funding, but there isn't enough revenue to go around. There is never enough funding to go around, and I've been here long enough to see taxes increased on the working class and at the end of the day there still isn't enough revenue to go around. I appreciate the leadership on no new revenues in the House budget. We've had to act in a fiscally responsible manner. That is the harsh reality of being a legislator in Massachusetts. To deflect that to the referendum process would be a dereliction of our duty. Raising taxes for transportation has a familiar sound, because we've already done that. Here we are again. It's a little different this time. It's the introduction of class warfare. Tax the rich. Higher ed will become affordable. But I want to say the $2 billion would need to be a magic dust, because to cover all this spending it will not be enough. If it did come to pass we'd be sitting here in five years having the same discussion: How do we get more revenue? Do I come from a wealth background? No. A wealthy district? No. In five years that might be the case. This affects all households over $1 million. We hear about the 1 percent, well that's anyone making $860,000. That's not $1 milllion. Maybe after that it will go all the way down to $200,000. In my district if someone made that they would be considered rich. There's something wrong with the dialogue. It's stealing from the rich to give to the poor. We are legislators. We are not Robin Hood. We're shirking our responsibilities. I hope the question does not pass.

Rep. Durant said, I'm heartened by the previous speaker. When I first ran for this seat six years ago, there was a question about how you would have voted on marriage, and I used to think this was a great idea – direct democracy. But things aren't as simple as they appear. Sometimes petitions are good. On other instances we try to allow them to create complex policy through an initiative. What we're doing here is really a sleight of hand, it's intellectual sleight of hand. It sounds pretty good. To provide for education, the repair of roads and bridges, public transportation. But we use that sleight of hand, don't we. Those three magic words: Subject to appropriation. We said let's make sure this gets allocated the way it's supposed to. But we said, We trust everybody. We all want it to go there. But it's subject to appropriation. And those three words are the legislative equivalent of the word but. When you use the word but it means the exact opposite. I really think you're a wonderful person, but not really. We want people to believe that. Do you want better roads. Vote for this amendment. Subject to us appropriating the money. History shows we don't do that. We know from history that does not take place. I want to ask my colleagues if we're sincere, we should have voted for amendment #11.

Rep. Toomey said, I rise in support of this amendment. What we have is an opportunity to resolve inherent inequities in our state system of taxation. We know individuals in the bottom 20 percent pay an effective rate that is twice that of the top 1 percent. Given the problems our government faces, this disparity is something we can no longer accept or tolerate. Critics tell us how this amendment will scare the job creators from Massachusetts. These are myths. Tax policy has followed this flawed reasoning for 35 years. Look at the state of our schools, roads and public transit. If we don't make proper investments we wil put the region's economy at risk. That is far scarier for job creators. For constituents who aren't making $1 million – and I have many who are – these problems are grave in nature. We have a solution that will bring in billions in revenue. It's a solution that 70 percent of the voters support. I urge my colleagues to vote in favor of this amendment today.

Sen. Lewis said, The first time that I stood at this podium was when I delivered my maiden speech in 2009 in favor of a tax increase to stave off deep cuts in essential programs. I'm a little older and wiser today. If I had to do it over I probably would have chosen a different issue for my maiden speech. I stand before you today more certain that the amendment would be good for Massachusetts. It would strengthen the state's economy and improve quality of life. Poor and working families are struggling to get by every single day. For millions of people the American dream is ever more elusive. From World War II to 1979 economic prosperity was shared. Since then income for the bottom 90 percent has hardly grown at all. Income and wealth has gone to those who are already very rich. Working people are working longer hours, multiple jobs, and they're more productive than ever before. What really upsets me is the harsh toll this is taking on our children. One in six of our children are now growing up in poverty. That's shameful. I recently met with a principal of the Salemwood School in Malden. Principal Keenan was keeping track of all the challenges and traumas of students in her school. I want to read to you the list from just one week: hunger, lack of clothing, poverty, homelessness, domestic cviolence, physical and sexual abuse, DCF custody, parents deceased, MIA, in prison in halfway house, in another country, bounding from foster homes, depression, anxiety, alcoholism, drug addiction, cutting, suicidal thoughts. That's what she saw in one week in a K-8 elementary school because these families are suffering. We know there are no easy solutions, but I would argue that one contributing factor is squarely in our control, and that's tax and fiscal policy. Our tax system is not fair. It's regressive. People in the bottom 20 percent pay 10.5 percent in state and local, while people in the top 1 percent pay only 5 percent after you account for federal tax deductions. We don't have a flat tax. We have a regressive and unfair tax system. And second, the tax structure is not sufficient to support the needs of our commonwealth. In 2001 we invested 11 percent of state GDP. Today we invest 9.5 percent. Of the growth in state budget since 2001, most of that new revenue has been consumed by rising health care, so it has not been available for many other needs. We've had to cut spending. Since 2001, local aid is down by 43 percent, EEC is down 22 percent, higher ed down 20 percent, public health down 23 percent, environment 23 percent, mental health 8 percent. We have been cutting and cutting in virtually every area except health care. We have a spending problem, but it's not the kind that Governor Baker likes to talk about. We don't spend nearly enough on a range of public priorities. This has an impact. Our families are suffering. Our communities are suffering. And economic growth is suffering. I hope we vote to move this forward. It's the best opportunity to make our tax system fairer.

Sen. deMacedo said, I rise in opposition to moving this ballot initiative forward. I do that because I believe that we are sending a message when we do this. I understand it ends up in the voters hands. We're sending a very strong message. I sat at this rostrum and spoke in the House about the tech tax. I said We're sending a message that it will probably be easier to do business in New Hampshire. All they need to do is move computers from Saugus to Nashua. But the message wasn't heeded. Within three months we saw what happened. We saw companies saying, We are leaving. To be honest, I don't know any millionaires. I don't have any in my district other than the gentleman from Longmeadow. They've created something and in some cases worked 120 hours a week to build something and created jobs. I don't want those brilliant people to leave. It's so easy to say, Let's tax that guy. Most of us probably don't know millionaires. I'm not here to protect millionaires. I'm here to protect jobs. We've seen it in New Jersey, in Maryland. They feel unfairly picked on. I pay thousand and thousands and just because I made it you're going to go after me for more. When those jobs leave it's our constituents that lose those jobs. I hope you'll think about it. I hope this ballot initiative does not move forward.

Question came on agreeing to the amendment. 50 votes is required for agreement.

BY A ROLL CALL VOTE OF 135 to 57 the constitutional convention AGREED TO THE AMENDMENT. Time was 4:07 p.m. The Senate voted 33 to 7. The House 102 to 50 voted Time was 4:07 p.m. (Applause from the gallery)

Sen. Tarr said, Clearly we have more work to do. I hope we'll consult on issues of constitutionality. I move recess until July 13.

RECESS: The Joint Session was recessed until July 13 at 1 p.m.

The Sgt. At Arms escorted the Senate out of the chamber.

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