MTA Today - Summer 2015

the very rich. (Even renters pay property taxes; the taxes are simply rolled into the cost of rents.) With the Raise Up Massachusetts amendment in place, the top 1 percent would still pay a smaller-than-average share of their incomes to state and local taxes ( 8 percent), but the gap would be narrowed.

n The rich have gotten much, much richer, while incomes for everyone else have stagnated.

According to the MBPC, the incomes of most Massachusetts households have barely increased in inflation-adjusted terms since the late 1970s. But from 1979 through 2011, incomes of the top

1 percent in Massachusetts grew 10 times faster than incomes of households in the bottom 90 percent.

n The U.S. has the highest rate of income inequality among all advanced economies. A

2014 Harvard Business School study found that the average CEO of a Fortune 500 company makes more than $12 million a year, or 354 times what the average employee of those companies makes.

Another study found that a typical worker at a McDonald’s or Starbucks has to work for six months to earn as much as each of those companies’ CEOs makes in an hour. Yet in Massachusetts, millionaire CEOs and minimum-wage workers are all taxed at the same rate.

Highest priorities for funding

Public opinion polling makes it clear that public education and transportation would be the highest priorities for money raised by a new tax on the very wealthy.

“The voters recognize that for a state to thrive, we need excellent public schools, affordable higher education and much better transportation infrastructure so people can get to their schools, homes and workplaces,” Madeloni said.

In addition, these services have been badly underfunded in recent decades because past tax cuts have slashed the revenue needed to support them. In inflation-adjusted dollars, state support has dropped for public schools, public higher education and local aid.

n Per-pupil state spending on public higher education is down 49 percent between the peak — fiscal year 2001 — and FY 2016. That’s a loss of more than half a billion dollars.

n State spending on K- 12 Chapter 70 aid is down 8 percent between the peak year, FY 2002, and FY 2016, when adjusted for enrollment changes.

Initiative would reduce income inequality

Continued from previous page

n State spending on other local aid — some of which is spent on education — is down 50 percent between FY 2001 and FY 2016.

n State spending on early education and care is down 32 percent between FY 2001 and FY 2016.

Cuts in state funding for public education and other local aid have varied across districts, but in many cases have led to fewer elective courses, new fees for athletics and extracurricular activities, poorly maintained technology, large class sizes, limited professional development opportunities for teachers and demands for givebacks at the bargaining table.

At the higher education level, impacts have included a dramatic decline in the percentage of courses taught by full-time faculty, continued poor compensation of adjunct faculty, skyrocketing costs and debt for students, and contentious battles to get the state to make good on promised pay and benefits packages.

“The austerity narrative that denies income inequality and tells communities and colleges to do more with less no longer holds,” said Madeloni. “We are ready to imagine more for our Commonwealth and do what’s needed to access the resources to do it. This is about the common good — about economic justice.”

The amendment process

The Raise Up Massachusetts initiative is for
a constitutional amendment, not simply a law
change, because of a provision in the Massachusetts
Constitution. Article 44 states that taxes “shall
be levied at a uniform rate throughout the
commonwealth upon incomes derived from the same
Previous efforts to amend the Constitution to
allow for a more progressive tax system have gone
down in defeat, largely because many voters didn’t
trust the Legislature to allocate the money where it
was most needed and worried that it would apply
higher rates to income earned by low- and middle-
income taxpayers.

These two concerns are addressed in the amendment crafted by the Raise Up Massachusetts coalition this year.

The proposed amendment states, “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.”
In addition, the threshold is indexed to inflation.
The Constitution would continue to prohibit applying
differential rates to income below the adjusted
threshold.

The amendment also spells out where the money is to go: “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 …” Thus, it is clear that education and transportation are the services that must benefit from the increased revenues.

To amend the Constitution, the supporters have to collect 64,750 certified signatures this fall. Because so many signatures are disqualified for one reason or another, the campaign is relying on volunteers to collect more than 100,000 signatures and turn them in to city and town clerks’ offices at different checkpoints through the November deadline.

Once certified, the petition forms must be picked up and delivered to the Secretary of the Commonwealth’s office by Dec. 2.

Assuming that effort is successful, the initiative must then be approved by one-quarter of the state’s 200 representatives and senators — at least 50 of them — during constitutional conventions held in two consecutive legislative sessions.

“It is a lot of work to amend the state Constitution,” Madeloni said. “It is work that can only be done through a people’s movement. It is a grassroots effort that must involve tens of thousands of MTA members.

“A grassroots campaign does more than just get us the signatures we need,” she continued. “It is also the best way to educate ourselves and others about the serious problems in our society caused by inadequate funding of our education system coupled with our country’s staggering — and growing — income inequality. This is an opportunity to deepen our coalitions, to build power and to show ourselves and our communities that we have a shared interest in and willingness to work for the greater good.”