THE QUESTION of how to split the money flowing into state coffers from the millionaires tax between education and transportation accounts is likely to be a key focus of state budget discussions this year.
Members of a task force on transportation funding, as they’ve set about crafting a final report, have indicated that there should be a more even split than the way the pie was divided in the most recent budget cycle. The House’s top budget-writer, Rep. Aaron Michlewitz, has also suggested that the funds were “designed to be split evenly.”
But one of the main backers of the 2022 ballot question that created the 4 percent income tax surcharge on income over $1 million says the split shouldn’t be locked in.
“I don’t land on a particular number,” said Max Page, the head of the Massachusetts Teachers Association, when asked about whether the split should be 50-50. There could be budget cycles where education needs outpace transportation needs, he said.
Page’s union, along with the National Education Association, was responsible for the vast majority of campaign spending on the ballot measure, pouring millions of dollars into an effort to pass the question, which 52 percent of voters statewide supported. Boston, Cambridge, Holyoke, Fall River and Page’s hometown of Amherst backed the measure, but business groups opposed the measure, which was voted down in Plymouth, Needham, Milton, and Hingham.
Page, whose union has 117,00 members across 400 local groups in the state, is quick to add they back the investments in transportation, since they ride the struggling MBTA, drive down roads and bridges, and walk on the sidewalk.
But “landing on an exact number as needs shift from year to year doesn’t make sense,” he added. “Saying it must be x percentage or y percentage, that may shift a bit over time depending on particular needs in any given area.”
In talking about spending priorities, Page expects them to shift year to year, depending on the needs. His union is noting deferred maintenance at schools and colleges, and pointing to a “real fiscal crisis” within school districts, as some were forced to implement layoffs and others attempted property tax overrides.
Salaries for staff and faculty across the system are low, Page contends, when the state’s high cost of living is factored in.
Paid family leave is another issue. State law provides 12 weeks of paid leave for an employee to care for a family member or bond with a child, except for municipal departments. “Our educators, who are two-thirds women, do not have access to the state paid family leave program,” he said. “That’s a wrong that needs to be righted.”
In the most recent state budget, 59 percent of millionaires tax revenue went towards education (universal free school meals and free community college, for example), while 41 percent went to transportation (fare relief for low-income riders and free regional transit beyond the MBTA lines, among other spending items).
The left-leaning Massachusetts Budget and Policy Center, also known as MassBudget, in a report issued Monday, indicated that ridership on the Southeastern Regional Transit Authority fare-free buses rose by 56 percent last summer into the fall, and the buses improved their on-time performance, since they weren’t slowed down by people fumbling to pay their fare.
But some experts are also warning that the millionaires tax comes with tradeoffs. “The key thing to understand about the millionaires tax is that it doesn’t simply create a new stream of revenue; it also reduces the revenue we collect through the standard income tax, thanks to taxpayers who leave the state or engage in tax avoidance,” Tufts University’s Evan Horowitz testified to a panel of Beacon Hill budget-writers in December.
Even so, for Beacon Hill policymakers, there’s still a billion dollar surplus from the millionaires tax to play with, too, as state budget writers ready to write the spending plan for the fiscal year that starts this July. A revenue estimate recently agreed upon by Beacon Hill leaders points to $2.4 billion coming from million-dollar incomes.
“That’s a tremendous boon to the Commonwealth,” Page said.
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