After tech tax, council rounding up info for Hill’s next big tax debate

Image: Thinkstock
Image: Thinkstock

STATE HOUSE, BOSTON, OCT. 20, 2016…..The Massachusetts High Technology Council is gearing up to fight the proposed surtax on households with incomes above $1 million and hopes to persuade lawmakers not to advance the so-called “millionaire’s tax” to the 2018 ballot.

The council, a roughly 130-member trade organization that pushes initiatives favored by the high tech industry on Beacon Hill, is raising money and waiting to learn the makeup of the next Legislature, which is expected to put the proposed surtax to voters on the 2018 ballot with an affirmative vote at a Constitutional Convention next session.

“We’re doing our homework and research right now with the reality that another Constitutional Convention is required before this moves forward and in order to be best prepared and to determine what our strategy will be,” MHTC President Christopher Anderson told the News Service on Thursday. “Because we do think passing a new tax like this does not create a more efficient, affordable or accountable government. So we’re doing our homework.”

The amendment would impose a 4 percent surtax on household incomes over $1 million, a change to the state’s tax structure that the Department of Revenue has said would generate an estimated $1.9 billion in additional revenue. While the amendment states all the dollars raised would be limited to transportation and education investments, opponents counter that the constitution prohibits ballot referendums from making specific appropriations. Massachusetts currently has a flat 5.1 percent income tax rate.

House and Senate lawmakers meeting jointly in May voted 135-57 to advance the constitutional amendment. If the amendment receives at least 50 votes from lawmakers meeting in another Constitutional Convention during the 2017-2018 session, the proposal would be placed before voters in November 2018 for a binding vote.

Anderson said the council is waiting to find out how legislative races around the state are resolved on Election Day before settling on a specific strategy.

“We are looking at our options and preparing our strategy for whenever that convention occurs,” he said.

Asked if the ultimate goal of the council is to block the constitutional amendment from ever reaching the 2018 ballot, Anderson said, “we oppose the measure, so our goal is to develop as much information as possible to allow us to create a strategy that we think helps us achieve our goal.”

According to the council, establishment of the higher tax bracket would place Massachusetts below only California and Minnesota as one of the highest top-tax-rates among “peer technology” states. The council has previously argued that the amendment would “severely limit legislative and citizen power to set and amend tax policy in response to economic conditions.”

Anderson said Thursday the council wants to arm itself with information on how the surtax would affect the state’s business climate, its competitiveness with other states and the state’s successful technology sector.

“When we successfully argued for the repeal of the tech tax in 2013, part of that was to demonstrate the unintended consequences of the Legislature’s tax expansion,” he said. “So we’re getting way ahead of the curve this time to make sure any information that a legislator would want to have about consequences, to the extent we can prepare that, will be available for them to consider before they make their next vote on this.”

The council is made up of tech companies, higher education institutions, law firms and other business ventures. Board members include representatives from workforce management company Kronos Inc., the lobbying firm ML Strategies and Northeastern University. Other members listed on the council’s website include the University of Massachusetts system and government agencies with strong economic ties like the Massachusetts Port Authority and MassDevelopment.

Gov. Charlie Baker, who generally opposes tax hikes but has yet to align himself for or against the proposed amendment, was the council’s communications director in the early 1980s. Harvard Pilgrim Health Care, the insurance company that Baker once ran, is also a member of the High Tech Council.

Copyright  2016 State House News Service

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