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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.
AMENDMENT 1 -- WITHDRAWN
AMENDMENT 2 -- WITHDRAWN
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.
AMENDMENT 4 -- WITHDRAWN
AMENDMENT 5 -- WITHDRAWN
JONES AMENDMENT 6 -- Income Tax
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.
BY A ROLL
CALL VOTE OF 42-148, FURTHER AMENDMENT REJECTED. The
House voted 35-115.
The underlying amendment No. 6 was REJECTED on a voice
vote.
JONES AMENDMENT 7: Income Tax II
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.
DISCLAIMER: Bill texts and histories are available at
www.malegislature.gov. All votes are voice votes, unless
otherwise noted. Bills ordered to third reading have
been given initial approval. To engross a bill is to
pass it and send it to the other branch. The last of
three votes taken on bills that reach the governor's
desk is the vote on enactment. So, it's third reading
(initial approval), engrossment (passage) and enactment.
The News Service coverage of legislative debate is an
accurate summary of remarks, not a verbatim transcript.
NOTE: In accordance with Title 17 U.S.C. section 107, this
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Citizens for Limited Taxation ▪ PO
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