Advocates eye ‘millionaires’ tax’ for new transportation funding

But the business community they once allied with is less enthusiastic.

–The Boston Globe

Some — but not all — advocates who fought for transportation funding in 2014 are now looking to a proposed 2018 ballot question as a way to raise billions for roads, bridges, and public transit initiatives across the state.

The proposed amendment to the Massachusetts constitution would add new transportation funding by increasing taxes on high-income earners. Alternately referred to as the “millionaire’s tax’’ and the “fair share amendment,’’ transportation advocates have come to its support.

The question would impose an additional 4 percent tax on individuals’ incomes over $1 million, and is meant to split proceeds between state transportation and education funds.

Transportation for Massachusetts, an organization that represents dozens of transportation-focused groups across the state, is part of the coalition backing the proposed tax.

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“We feel that there’s a great need across the whole state for transportation investments and this would be one way to raise for revenue,’’ said Charlie Ticotsky, policy director at Transportation for Massachusetts. “There are so many places that can benefit from an increased investment in transportation.’’

For transportation advocates, the 2018 question could represent a return to the ballot box after a big loss in the fight for funding in 2014.

That year, advocates and business groups opposed a ballot question which sought to repeal a 2013 law tying the gas tax to inflation to raise new transportation funding. The question passed, and the gas tax plan was undone.

Noah Berger, of the left-leaning Massachusetts Budget and Policy Center, which analyzes state financing, estimates that if the question made the ballot and voters gave their approval, the new tax would generate upwards of $1.5 billion per year. If the funds were split evenly between transportation and education, about $750 million would go to transportation. Other estimates have suggested the amount of total revenue raised could be closer to $2 billion.

The proposed new tax is not a be-all, end-all solution for transportation financing, said Rafael Mares, a vice president at the Conservation Law Foundation, which is a member organization of Transportation for Massachusetts.

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“The fair share amendment provides a great solution but it’s not necessarily possible to wait until then,’’ he said.

Because the tax would be clearly defined, some advocates think the idea has a better chance of gaining voter approval than the gas tax indexing did in 2014, when opponents argued that taxes would increase automatically without a vote. They also believe there is an appetite in Massachusetts for asking more of high-income earners rather than of everyday drivers.

“We hope and we think there’s a good chance of this passing,’’ Ticotsky said. “People will understand that this money will go to transportation and at the same time make the tax system more fair.’’

The question must receive the support of 50 lawmakers this year, and again in the next two-year legislative session, in order to reach the ballot in 2018.

But some business groups who supported the 2014 effort, including the Greater Boston Chamber of Commerce, are voicing concerns about instituting a new tax on high earners.

“I think we remain committed to the whole idea of figuring out ways to fix the T, bridges and roads,’’ said the Chamber’s CEO, Jim Rooney. “Now, the question of the mechanism, of the fair share tax, is one that we haven’t gotten behind or understood enough to take a position on yet.’’

Rooney—who was not Chamber CEO in 2014, but supported the gas tax personally—said he’s concerned that small businesses established as sole proprietorships would wind up paying the new tax on earnings over $1 million, and that the new tax could send a poor signal to companies seeking to do business in Massachusetts. There’s also no guarantee the new revenue will ultimately go to transportation and education because the ballot question would direct the legislature to appropriate the money, he said.

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The business-backed Massachusetts Taxpayer Foundation also supported the automatic gas tax increases but has sounded caution about the proposal.

“It is not certain the money will go for new transportation or education investments,’’ MTF President Eileen McAnneny said at a hearing last month, according to MassLive.

Another past advocate for new transportation revenue who has not been overly keen on the 2018 proposal: Transportation Secretary Stephanie Pollack.

As a long-time transit advocate before taking office, Pollack previously called for more transportation funding and in 2014 donated $100 to the pro-gas tax campaign. Gov. Charlie Baker, who would hire her months later and generally opposes new taxes, supported repealing the gas tax plan.

But Pollack demurred earlier this month when asked if she would support new transportation funding through the millionaire’s tax.

“I have no position on that at this point,’’ she told State House News Service.

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