Stop me when you’ve heard this story:

Speaker Bob DeLeo and Senate President Stan Rosenberg aggressively push through an ambitious budget laden with earmarks, and lacking in transparency. They override the Governor’s vetoes and his pleas for increased fiscal responsibility…  In June, as the state faces an inevitable budget shortfall, Gov. Baker intercedes and cuts hundreds of millions. The following year, the Speaker and Senate President repeat the same process. As of this week, the state is facing a $439M budget deficit. 

This week, Rosenberg will call for a vote on Prop. 80 – or as he calls it “The Fair Share Amendment.” The proposition is simple: all taxpayers in Massachusetts earning over $1M will incur an additional 4% tax levy, taking their tax rate to 9.1%; an 80% increase. If passed, it would become a ballot question for the 2018 election to amend the state constitution. The state constitution forbids a graduated tax schedule -- higher taxes for higher wages -- meaning the measure will have to be a ballot initiative to amend the Constitution.

Proponents of the amendment argue the increased tax revenue will fund transportation and education. As the old adage goes; if it sounds too good to be true, it is. Prop. 80 is not only unsound tax policy, it is a Beacon Hill bailout for the legislature’s uncontrollable spending habit. It is an 80% tax increase that pays for a 40% pay raise.

Prop. 80, originally concocted by the Dirty Dozen, will force the state to take an enormous risk with its budget structure. The last time a graduated income tax was taken to the ballot box, it was met with a resounding “no” by voters, with a 65% to 28% defeat. It has actually been defeated at the ballot box on five separate occasions. Voters approved in 2000, to reduce the income tax rate to 5%, but lawmakers have only allowed it to decease to 5.1%. 

The new tax will target 19,600 individuals, or .05% of all taxpayers in MA, forecasted to generate $2,000,000,000 in tax revenues. Yet, the underlying assumption is that as taxpayers, we are okay with .05% paying for 30% of the budget cost. Even if this is true, any volatility in the 19,600 filers will result in devastating budget shortfalls. In fact, the entire proposal is based on unrealistic actuarial assumptions. Of the 19,600 filers, the 900 of whom will make more than $10M a year will contribute 53% of new tax revenue, according to the Mass Taxpayer’s Foundation. In that subsection, if just one third of the filers left the state, this would result in a $750M shortfall in revenue.

Let’s say state taxpayers want to take the risk with the state budget.  Prop. 80 is still a governance and good government nightmare.

One talking point of the proposition states that all the funds are set aside for education and transportation. But this is plainly misleading. The measure states that all the funds are “subject to appropriation,” which means that the revenue collected goes right into the general slush fund for legislators to use as they please. In the same way that this is a $2,000,000,000 tax hike and appropriation for specific spending, if passed, there would be nothing preventing other special interest groups from amending the state constitution to budget their wishful pet projects. The same is true regarding budgeting a tax break into the state constitution. 

Should this pass, the legislature would be hamstrung to change the law. On several occasions, the legislature has passed laws that they were later forced to repeal because of complications from existing statutes. Most recently in FY2014, Beacon Hill passed a sales tax on computer software services. The bill was later repealed because it proved nearly impossible to determine which types of sales were subject to the tax code. As the economy changed, so did the statute. Prop. 80 is different because the changes would come as a constitutional amendment. Connecticut made this mistake and the Governor has publicly stated it was mistake. Should unforeseen consequences arise as a result of the amendment, the legislature would need to pass yet another constitutional amendment. If the economy changed the day after Prop. 80 went into effect, Beacon Hill wouldn’t be able to adjust until 2023.

If you would like to contact your lawmaker and urge them to vote against Prop. 80, a Beacon Hill bailout, a 80% tax increase to pay for a 40% pay raise, please click here.

Press Release - for immediate release Contact Eileen McAnneny, Co-Chair 617-720-1000

Boston, MA, March 27, 2017 – Several members of the FixOurT Coalition held a press conference today in support of MBTA efforts to explore privatization as a means to improve service and reduce costs. The press conference was held at the Transportation Building in advance of a Fiscal and Management Control Board (FMCB) meeting.

The FixOurT Coalition is a group of 53 business and municipals partners who recognize the T’s vital place in the economy and are committed to supporting the organizational, financial and operational improvements necessary to ensure an MBTA that is safe, effective and reliable.

Eileen McAnneny, Co-Chair of the FixOurT Coalition, spoke to the reasons for its advocacy stating that the FMCB had made great strides in identifying and addressing operational and managerial failures. She noted the Coalition’s strong support of the three year suspension of the state’s onerous privatization statute, in order to provide the Board with the tools they needed to get the job done.

McAnneny said “The FixOurT Coalition is here today to voice our strong support for exploring the benefits of outsourcing bus maintenance. We do so because we know that in order for the T to turnaround and become the modern, customer-centric public transit system that we all want it to be, it has to balance its operating budget and invest those savings into its infrastructure.”

With expenses growing at five percent a year and revenues at two percent, the FMCB must consider all options for reducing operating costs in order to achieve that fundamental goal. Bus maintenance represents one of the largest cost components for the T and therefore looking into cost effective ways to maintain buses is a necessary next step.

As critical as balancing the operating budget is, that is not the only reason to seek outside bids. There is also an opportunity to improve the rider’s experience. The partnership between Uber/Lyft for delivering The Ride services, where the cost has been reduced, wait times have been all but eliminated, and rider satisfaction is far exceeding industry standards, is a perfect example of what is possible.

Sam Tyler, President of the Boston Municipal Research Bureau attributed his support to improve bus maintenance was because of its critical importance to Boston businesses, their employees, and their customers.

Mark Gallagher, Executive Vice President of the Massachusetts High Technology Council and David Begelfer, President of NAIOP MA, the Commercial Real Estate Development Association stated that transportation infrastructure and MBTA service in particular ranked as one of the most critical needs for their respective member companies and called for the FMCB to continue to support more efficient ways to control costs and improve services.

Other speakers included Mark Bartlett representing the American Council of Engineering Companies of Massachusetts (ACEC), Paul Craney, Executive Director of the Massachusetts Fiscal Alliance, and Greg Sullivan, Research Director of the Pioneer Institute and Chris Kealey, Deputy Director of the Massachusetts Business Roundtable was also in attendance.

For more information, please contact Eileen McAnneny at [email protected] or 617-720-1000.

Below are the members of the Fix Our T Coalition

Only compared to the House's budget debate quickie could the Senate's three days of debate seem like cautious deliberation, but that's how things roll on Beacon Hill--like a car with square wheels.
 
Senators filed 1,031 amendments in all, or roughly 26 amendments per. The leadership created three back-room bundles of consolidated amendments out of some of the 1,031 and then called for only 32 recorded roll call votes. Last year's number, 48, starts looking awfully transparent. But here’s the kicker: of those 32 recorded votes, all but one were unanimous. Outside of unanimous roll call votes, leadership used countless unanimous voice votes to consume the day.
 
Unanimous votes say a couple of things to Senate watchers. First, a unanimous vote on an omnibus package containing perhaps dozens of amendments means there's been a lot of horse trading. The amendment stew has been sweetened with enough porky perks to entice every single member to vote yes. And all that sweetness is added behind the scenes, because nobody wants the voters to know what they're really voting for.
 
Second, a unanimous vote provides cover. When the rancid meat the sweetener was added to cover comes to light, all a Senator need say to explain is "everybody did it." You know, that excuse your mother never let you get away with.
 
Lastly, unanimous votes are puzzling. Surely the major parties have important and distinct views on policy. If the dogs and ponies are alike, why bother hosting the show?
 
The Senate President even added a bit of a twist to this game. Earlier this year, the Senate voted for a rule requiring them to take recorded roll call votes on all consolidated budget amendments. It wasn't much of a reform, but it was something. A consolidated amendment can represent scores of individual items, and passing them through the process with a nod and a wink seemed pretty cheeky even to this bunch.
 
But a little thing like a rule ensuring a small measure of accountability didn't stop the Leadership from hiding a failure.  
 
When it appeared one of the consolidated amendments wasn’t going to pass, Leadership pulled it. Rather than have a record of who voted against the package, the 75 amendments were unbundled and passed along via a voice vote.
 
When all the shenanigans were done, the total for the Senate Budget came in at $40.39B as they added roughly $50.67M in spending during debate. However, left underfundedwas $180.7M in obligations.

In a state where the law requires the annual budget to balance, this is dirty dealing. The Senate Budget handed Governor Baker a black hat for the next episode. He'll have to make tough 9C cuts in order to keep the state’s basic services going.

Worst of all, from our perspective, an amendment filed to put another road block in place at the MBTA passed unanimously. Legislative memories are short (apparently, even those of the pachyderms). Commuters, however, haven't forgotten the abysmal train service before Governor Baker took the reins of the runaway Transit Authority. With last night's vote, the Senate made the first move toward de-railing all that good work.
 
If you rely on public transportation, save your pennies. You'll need fur-lined boots and a warm wool coat for the long, cold morning wait once the Beacon Hill Power Brokers put the Union Bosses and their lust for perks back in the driver’s seat.