MASSACHUSETTS VOTERS DELIVERED a double victory to two progressive causes on Tuesday, approving by narrow margins ballot questions to impose a new income tax surcharge on high earners and to retain a recently passed law that will allow undocumented immigrants to obtain driver’s licenses.
The two high-profile ballot questions, which at times seemed to draw more attention than lopsided contests for governor and other statewide offices, became rallying points for labor unions and liberal activists, with the two campaigns even teaming up for a joint election night party at a Boston hotel.
The vote on both measures was close, with the Associated Press not calling the two races until Wednesday afternoon. The tax surcharge prevailed by a 52-48 margin, while the question asking voters whether they wanted to retain the driver’s license law passed with 54 percent of voters backing the law and 46 percent voting to repeal it.
On the two other ballot questions decided in Tuesday’s election, voters approved a measure requiring a minimum share of all dental insurance premium payments to go toward clinical care, while defeating a question that would have increased the number of licenses a company can hold to sell beer and wine.
Question 1, which drew the most attention — and campaign spending — of the four ballot questions, will add a 4 percent surcharge on top of the state’s existing 5 percent income tax on all income reported by tax filers over $1 million.
Dubbed the Fair Share Amendment by proponents, the measure enshrines the surcharge in the state constitution, with the $1 million threshold slated to adjust over time with inflation.
Advocates said the state’s flat 5 percent income tax does not ask enough from wealthy residents, and they argued that those with income greater than $1 million could easily bear the added tax, which the ballot question said is to be directed to education and transportation needs.
Opponents warned that passage of the tax would lead some high-earners to move out Massachusetts, hurt the state’s economic competitiveness, and that it will hit lots of people who are only “one-time millionaires” by virtue of selling a home or a business.
The so-called millionaires tax has been on a tortuous path, as labor unions and other liberal groups have spent years trying to bring an element of progressive taxation to the state’s flat tax on income. An effort to put the surcharge on the 2018 state ballot was derailed by the Supreme Judicial Court, which threw it off the ballot as a citizen-initiated petition because the court said it violated the state constitution by combining unrelated issues. Proponents restarted their effort by winning the support of the Legislature before sending it to voters, a process that does not need to meet the “relatedness” standard.
That effort followed five earlier failed ballot questions, dating back to 1962, to introduce some form of a graduated income tax in Massachusetts.
An analysis by the Center for State Policy Analysis at Tufts University estimated that the surcharge would raise $1.3 billion in 2023 and that just 0.6 percent of state households would be hit by the levy. The analysis said half of all US residents who earned more than $1 million from 1999 to 2007 were “one-timers,” a finding that Question 1 opponents used to try to convince voters that the tax would hit lots of people not usually thought of as millionaires.
The tax drew support from every prominent Democrat in the state, including both US senators and now-governor-elect Maura Healey.
Outgoing Gov. Charlie Baker opposed the measure, but he did not make a concerted push to defeat it. Several wealthy bold-name figures, including New England Patriots owner Robert Kraft, New Balance chairman Jim Davis, and Suffolk Construction CEO John Fish, donated to the campaign to defeat the ballot question.
But the millionaires and billionaires opposing the measure were outspent nearly two-to-one by proponents, whose campaign was heavily bankrolled by the Massachusetts Teachers Association.
Proponents raised more than $27 million, with $12 million of it coming from the state’s largest teachers union. The No on 1 campaign raised just over $14 million.
Both sides shaded the truth a little or tried to frame facts in ways favorable to their side as they jockeyed for advantage with voters.
Proponents sought to leverage the ballot question’s call for all new taxes it generates to be spent on education and transportation – two areas popular with voters. But the ballot question, which will amend the state constitution, cannot guarantee any actual increase in spending on those needs. The Legislature could simply redirect other funds now spent in those areas and level-fund education and transportation using the new tax revenue.
Meanwhile, opponents highlighted the estimate that half of those who would be hit by the tax will be one-time millionaires – while ignoring the fact that the lion’s share of the more than $1 billion generated by the tax will still come from the super-rich, with many of the one-time payers just crossing the $1 million threshold, with only the share of their income above that level subject to the 4 percent tax.
Voters were understandably confused by the competing claims of the two sides, and the narrow margin by which the question passed served as the latest example of a well-established pattern of ballot question support often moving toward the status quo side of making no change to a law. A Suffolk University poll in mid-October showed the question leading by more than 20 points, 58-37, while the ultimate margin of victory was just 4 percentage points.
The driver’s license question was put on the ballot by opponents of the new law, which was passed by the Legislature in May after several years of halting efforts by immigrant advocates to have Massachusetts join the 16 other states and the District Columbia that allow undocumented immigrants to obtain driver’s licenses. Following the law’s passage – and a legislative override of Gov. Charlie Baker’s veto – opponents gathered the required signatures to put the question on the ballot seeking repeal of the statute.
The campaign to retain the law argued that it will make roads safer by allowing undocumented immigrants to receive the proper training and knowledge of driving laws that come with a license. They pointed to data suggesting there were fewer uninsured drivers and hit-and-run crashes following passage of similar laws in other states. The measure received support from some law enforcement officials, including the Massachusetts Major Cities Chiefs of Police Association.
Opponents argued that allowing undocumented immigrants to get driver’s licenses is not fair to those who immigrated legally. They warned that the measure could lead to undocumented immigrants getting registered to vote, but Secretary of State Bill Galvin, the state’s chief elections official, said systems already in place would prevent that. (Proponents pointed out that green card holders –- immigrants who have legal residence in the US but are not citizens – already have the right to get driver’s licenses.)
“The passage of this law made history, and voters in Massachusetts have just made it again,” said 32BJ SEIU executive vice president Roxana Rivera and Brazilian Worker Center executive director Lenita Reason, co-chairs of the Yes On 4 for Safer Roads campaign, in a statement. “Our Commonwealth will now have safer roads, and our immigrant families will safely be able to drive to work, drop their kids off at school, and go to medical appointments. We built a strong and diverse coalition that fought back against division and drove Massachusetts forward.”
Question 2 became a clash between dental insurance companies and dentists. The measure will require that at least 83 percent of all dental insurance premium payments go toward dental care and not profits or administrative costs of insurers. Dentists and groups representing dentists that supported the question said it would ensure more funding for actual patient care. They also argued that the measure would simply bring the same oversight of dental care spending that already exists for medical care, where state law sets a minimum medical loss ratio for health insurers. The question passed resoundingly, with support from more than 70 percent of voters.
Dental insurance companies, which opposed the ballot question, said it would drive up overall dental care costs by leading dentists to raise rates to meet the new loss ratio minimum. They suggested it could even lead to loss of dental coverage if costs become prohibitive for employers or employees.
Question 3, which was defeated 55-45, would have allowed companies to double over the next decade the number of retail beer and wine licenses they hold from 9 to 18. It also would have capped the number of all-alcohol licenses (beer, wine, and spirits) any company can hold to seven, unless they already hold more than that number.
Big chain stores have expressed interest for years in raising the cap on the number of licenses a company can hold, but Question 3 was actually put on the ballot by independent package store owners, who fear being put out of business by big chains that can undersell their prices. The package stores pushed the question as a compromise that they hoped would forestall any effort by chains to push for a bigger cap.