On June 18, 2018, the Massachusetts Supreme Judicial Court (SJC) decided Anderson v. Attorney General,¹ invalidating Initiative Petition 15-17 (IP 15-17), which was scheduled for the November 2018 ballot and, if approved by voters, would have amended the state constitution to allow an additional 4% tax on income over $1 million. According to IP 15-17, this additional revenue would be designated for transportation and education, "subject to appropriation" by the Massachusetts Legislature. The SJC held that IP 15-17 should not have been certified by the Attorney General "in proper form for submission to the people,"² because the petition violated the requirements of Article 48 of the Amendments of the Massachusetts Constitution (Article 48) concerning the subject matter and scope of initiative petitions.

Background

As described by the SJC in the Anderson decision, Article 44 of the Amendments of the Massachusetts Constitution (Article 44) mandates that the commonwealth can only levy its income tax under a flat tax rate. Article 44, ratified in 1915, enables the Legislature to levy a state income tax at a "uniform rate throughout the commonwealth upon incomes derived from the same class of property." This provision has been held by the SJC to prohibit a graduated income tax. In the past 50 years, there have been five initiative petitions seeking to amend Article 44 to permit the Legislature to impose a graduated income tax, with the most recent attempt being in 1994. The graduated income tax proposal in all five of these instances was presented on a standalone basis (i.e., not combined with some other measure), and failed to garner the necessary votes for passage. As noted by the SJC, 65% of voters voted against the graduated income tax ballot question in 1994.

The process to pass this constitutional amendment began nearly three years ago. In September, 2015, the Attorney General certified that IP 15-17 was, "in proper form for submission to the people" because, among other reasons, "it contains only subjects that are related or are mutually dependent … " After the petition was certified, the proponents of the petition gathered and submitted sufficient signatures so that the Secretary of State could then transmit the measure to the Legislature. Then, in two subsequent legislative sessions, the Legislature approved the petition, allowing IP 15-17 to appear on the ballot in November 2018. The instant litigation ensued following the Legislature's final approval in June 2017. Opponents of the petition filed a complaint in county court in October 2017 and the matter was ultimately reported to the SJC for a decision by the full court.³

The Supreme Judicial Court's opinion

The plaintiffs (opponents of IP 15-17) argued primarily that IP 15-17 should not have been certified because it violated the requirement in Article 48 that initiatives contain only subjects "which are related or which are mutually dependent." The SJC agreed with the plaintiffs and therefore, invalidated IP 15-17. This relatedness requirement of Article 48 has been analyzed by the SJC in numerous cases over the years when the propriety of various initiative petitions has been contested. According to the SJC, the intent of Article 48 is, among other things, to "protect against petitions which include 'as alluring a combination of what is popular with what is desired by selfish interests,'" or "packaging proposed laws in a way that would confuse the voter" in a practice sometimes referred to as "logrolling."⁴

The defendants argued that the relatedness requirement in Article 48 was an alternative test. In other words, the initiative petition must be "related" or "mutually dependent." After a review of precedent and legislative history underlying Article 48, the SJC rejected this argument, holding that "or"⁵ should not be interpreted as a disjunctive in this context and that the "mutually dependent" language was intended as a means of assisting the Attorney General and the Court in understanding the relatedness requirement. The SJC interpreted the substance of IP 15-17 in this light and in so doing noted that, "it is immediately apparent … that the three provisions [graduated income tax, revenue for education and revenue for transportation] are not mutually dependent." The SJC reasoned that these three subjects could all proceed as coherent stand-alone initiatives, as, in fact, the graduated income tax proposal had five times previously. The majority of the SJC concluded that, "because the provisions here can 'exist independently' they are not 'mutually dependent.'"

On the subject of relatedness, the SJC was not persuaded by the Attorney General or the intervening defendant's reasoning. The SJC wrote:

"Although she certified the subjects as sufficiently related, the Attorney General has not articulated a common purpose between these spending priorities, beyond the abstract determination that both purposes are "broad areas of public concern." The interveners, for their part, assert that prioritizing spending for education and transportation will "strengthen the Massachusetts economy and set a foundation for inclusive growth."

The SJC reasoned that the relatedness requirement is not satisfied by merely articulating a "'conceptual or abstract bond' between diverse subjects such as "broad areas of public concern" and "keys to inclusive growth." The SJC continued, holding that:

"The two subjects of the earmarked funding themselves are not related beyond the broadest conceptual level of public good. In addition, they are entirely separate from the subject of a stepped rather than flat-rate income tax, which, by itself, has been the subject of five prior initiative petitions … [IP 15-17] does not meet the related requirement set forth in [Article] 48 … Including it on the ballot would place a reasonable voter in the 'untenable position of casting a single vote on two or more dissimilar subjects.'"

Thus, the majority of the SJC determined that IP 15-17 contained three distinct issues that were not sufficiently related as required by Article 48.

Implications

Given that IP 15-17 has been held to violate the requirements for initiative petitions under Article 48, IP 15-17 cannot appear on the Massachusetts ballot and a graduated income tax remains impermissible under Article 44 of the Massachusetts Constitution. Going forward, it would likely be an uphill battle for a party to advance a graduated income tax initiative petition combined with a spending measure considering the SJC's holding in Anderson.

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ENDNOTES

¹ Anderson v. Attorney General, Slip. Op. SJC-12422 (June 18, 2018). The SJC's opinion was written by Justice Gaziano, joined by Justices Lowy, Cypher and Kafker. Justice Lenk wrote a concurring opinion. Justice Budd wrote a dissenting opinion joined by Chief Justice Gants.

² Unless otherwise noted, all quotations in this Alert are from the Anderson decision. Internal citing references have been omitted.

³ The online docket is viewable here (last accessed June 19, 2018).

⁴ The dissenting justices explained in a footnote that, "'Logrolling' … [has been] defined as the legislative practice of including several propositions in one measure or proposed constitutional amendment so that the legislature or voters will pass all of them, even though these propositions might not have passed if they had been submitted separately."

⁵ The SJC noted that, "although the disjunctive 'or' may suggest separate meanings for the two terms … it does not require mutual exclusivity. The word 'or' commonly introduces a synonym or 'definitional equivalent.'" The majority opinion interpreted "or" as a definitional equivalent in this context of Article 48. The dissenting justices would have reached the opposite conclusion, interpreting "or" in the disjunctive sense, providing two alternative tests.