Tax amendment would mean big gains for public education
MTA members attending the 2015 Summer Conference in Springfield gathered around Fall River Educators’ Association President Rebecca Cusick, center right, on the day she became one of the 10 initial signers of an initiative petition seeking a statewide ballot question on raising revenues for public education and transportation.
MTA members have their best opportunity in more than two decades to raise significant revenues for public education — taking a major step to advance the interests of our students, our schools, our colleges and universities, and our communities.
The MTA has joined an effort by the Raise Up Massachusetts coalition to increase revenues for education and transportation through an ambitious amendment to the state Constitution. The process of qualifying the amendment for the 2018 ballot begins with the collection of more than 100,000 signatures by Nov. 18.
“This initiative is a game-changer,” said MTA President Barbara Madeloni. “Our members have told us that new resources will help them create and support the schools and colleges our students deserve and make our public higher education system more affordable.
“It’s time to end the austerity myth that is used to justify depriving some students of an enriching educational experience,” Madeloni continued. “Let’s make Massachusetts a truly great place for students to live and learn, regardless of their ZIP codes.”
“This initiative is a game-changer,” said MTA President Barbara Madeloni. “Our members have told us that new resources will help them create and support the schools and colleges our students deserve and make our public higher education system more affordable.”
Raise Up Massachusetts is a coalition of labor, faith and community organizations that led the successful 2014 earned sick time ballot campaign and is the driving force behind campaigns to increase the minimum wage.
MTA members will be collecting signatures from other members in their schools and on their public higher education campuses, as well as from the general public in locations with heavy foot traffic, such as supermarket entrances and bus stops. Local leaders are working with their MTA field representatives and Senate district coordinators to develop signature collection plans.
The Raise Up Massachusetts amendment filed with the attorney general on Aug. 4 would:
- Create an additional tax of 4 percentage points on the portion of a filer’s annual income in excess of $1 million. Income tax rates would remain unchanged for the bottom 99 percent of the population.
- Index the $1 million threshold to inflation so that it would only affect the very wealthiest taxpayers.
- Raise more than $1 billion annually for public schools, public higher education and transportation infrastructure.
Rebecca Cusick, one of the first 10 signers of the initiative petition, said the amendment “is an opportunity to start to level the playing field for kids who live in poor communities.” Cusick, a fourth-grade teacher in Fall River, is president of the Fall River Educators’ Association and a member of the MTA Board of Directors.
“For me, a high priority is for more preschool,” she said. “We know that kids who live in poverty experience a lot of stress and trauma that can affect their brain development. Early interventions are very important. Right now, we don’t have universal preschool in Fall River where children can be nurtured and are guaranteed to be fed. Good preschools help children develop their social skills and lay the foundation for what they need in order to engage in academic activities later on.”
Other priorities, Cusick said, include smaller kindergarten class sizes (there are currently 25 to 30 students per class in Fall River), more counselors to deal with students’ social and emotional issues and the return of school librarians to help students learn research skills and select reading materials that inspire them.
Max Page, an MTA representative on the Raise Up Massachusetts Steering Committee, said he’s a strong advocate of using a more progressive tax system to improve education funding at all levels.
“For too long the MTA has had to play defense, trying to prevent cuts to our public schools, colleges and universities,” said Page, a University of Massachusetts Amherst professor. “With the revenue that would be generated by this initiative, we would be able to address some of our big dreams, including fixing the broken foundation budget system, investing in early education, cutting the cost of public higher education and investing in more faculty and staff at our public colleges and universities. These have all been impossible because each year we have heard, ‘There’s no money.’”
Why the wealthiest should pay more
The Massachusetts Budget and Policy Center has documented that income inequality has grown tremendously in the past 30 years. At the same time, the state’s wealthiest residents are paying a smaller share of their income than everyone else in state and local taxes.
The top 1 percent of earners pay, on average, 6.4 percent of their income in state and local taxes, while the bottom 99 percent pay 9.4 percent. Why the disparity? Because low- and middle-income families spend a much higher share of their income on property and sales taxes than do 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.
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.
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.
In inflation-adjusted dollars, state support has dropped for public schools, public higher education and local aid.
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.
- 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.
- 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.
- State spending on other local aid — some of which is spent on education — is down 50 percent between FY 2001 and FY 2016.
- 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 class of property.” The state Supreme Judicial Court has ruled that this uniformity clause applies to the income tax as well as other kinds of “property” taxed by the state.
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.”
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For more information on the campaign, visit www.massteacher.org/revenue and www.raiseupma.org.
Prepared for the Summer 2015 edition of MTA Today.