Anderson v. Attorney Gen.

• Decision Date: 18 June 2018
• Docket Number: SJC–12422
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Christopher ANDERSON & others v. ATTORNEY GENERAL & others.

479 Mass. 780

99 N.E.3d 309

Christopher ANDERSON & others¹

v.ATTORNEY GENERAL & others.²

SJC–12422

Supreme Judicial Court of Massachusetts, Suffolk..

Argued February 6, 2018.

Decided June 18, 2018.

Kevin P. Martin (David J. Zimmer & Joshua J. Bone, Boston, also present) for the plaintiffs.

Kate R. Cook, Boston, (Lisa C. Goodheart, Boston, also present) for the interveners.

Juliana deHaan Rice, Assistant Attorney General (Daniel J. Hammond, Assistant Attorney General, also present) for the defendants.

The following submitted briefs for amici curiae: Francis X. Wright, Jr., City Solicitor of Somerville, David P. Shapiro, Assistant City Solicitor of Somerville, Charles D Boddy, Jr., City Attorney of Lawrence, George Markopoulos, Assistant City Solicitor of Lynn, Mark Rumley, City Solicitor of Medford, Mikaela A. McDermott, City Solicitor of New Bedford, & Alan Seewald, City Solicitor of Northampton, for mayor of Somerville & others.

Joseph E. Sandler & Dara Lindenbaum, Washington, of the District of Columbia, Ben T. Clements, & Jessica Dormitzer, Boston, for Ballot Initiative Strategy Center.

Thomas O. Bean, Boston, for Alliance for Business Leadership.

Andrea C. Kramer, Boston, for Center on Budget and Policy Priorities & another.

John Pagliaro, & Martin J. Newhouse, Boston, for New England Legal Foundation.

Mark G. Matuschak, Robert K. Smith, & Colleen McCullough, Boston, for Pioneer Institute, Inc., & another.

Steven P. Lehotsky, Dan Himmelfarb, & John T. Lewis, Washington, of the District of Columbia, for Chamber of Commerce of the United States of America.

Richard Juang, St. Louis, for Adela Gonzalez & others.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

GAZIANO, J.

The Attorney General certified as suitable for printing on the 2018 Statewide ballot an initiative petition that would ask voters in the Commonwealth to decide whether to amend the existing flat tax rate mandated by the Massachusetts Constitution in order to impose a graduated tax on residents with incomes in excess of $1 million. The language of Initiative Petition 15–17 also provides that, "subject to appropriation" by the Legislature, all revenues received from the proposed tax "shall" be earmarked for two budgetary purposes: education and transportation.

The plaintiffs, registered voters in the Commonwealth, seek to exclude the petition from the ballot on the ground, inter alia, that it does not meet the related subjects requirement of art. 48 of the Amendments to the Massachusetts Constitution. In addition, the plaintiffs contend that the petition would constitute a "specific appropriation of money from the treasury of the commonwealth," contrary to the explicit prohibition in art. 48, The Initiative, II, § 2, of the Amendments to the Massachusetts Constitution against such appropriations, and that the drafters of art. 48, at the Constitutional Convention of 1917–1918, did not intend that tax rates be set by initiative petitions.³ The plaintiffs filed a complaint in the county court challenging the Attorney General's certification of the initiative petition and seeking to enjoin the Secretary of the Commonwealth (Secretary) from placing the petition on the 2018 Statewide ballot. The single justice reserved and reported the case for consideration by the full court.

We conclude that the initiative petition should not have been certified by the Attorney General as "in proper form for submission to the people," because, contrary to the certification, the petition does not contain only subjects "which are related or which are mutually dependent," pursuant to art. 48, The Initiative, II, § 3, of the Amendments to the Massachusetts Constitution, as amended by art. 74 of the Amendments.⁴

1. Background. a. Article 44. To place the issue in context, a brief description of the mandatory flat tax rate in the Massachusetts Constitution is necessary. Article 44 of the Amendments to the Massachusetts Constitution, ratified in 1915, allows the Legislature to levy a State income tax on Massachusetts residents at a "uniform rate." See Drapkin v. Commissioner of Revenue, 420 Mass. 333, 336, 649 N.E.2d 1094 (1995). Article 44 provides, in relevant part:

"Full power and authority are hereby given and granted to the general court to impose and levy a tax on income in the manner hereinafter provided. Such tax may be at different rates upon income derived from different classes of property, but shall be levied at a uniform rate throughout the commonwealth upon incomes derived from the same class of property."

Pursuant to art. 44, the State income tax "must be calculated by applying a single, flat rate percentage to a particular class of income." Peterson v. Commissioner of Revenue, 441 Mass. 420, 427, 806 N.E.2d 78 (2004). As a result of this provision, therefore, the Legislature is precluded from imposing a graduated income tax on Massachusetts taxpayers. See Opinion of the Justices, 383 Mass. 940, 941–942, 423 N.E.2d 751 (1981) ; Opinion of the Justices, 266 Mass. 583, 588, 165 N.E. 900 (1929).

Over the past fifty years, a number of initiative petitions seeking to amend art. 44, in order to permit a graduated income tax, have been certified and presented to the voters. In 1962, 1968, 1972, and 1976, proposals to amend the flat tax rate were placed on the ballot by the Legislature; in 1994, the ballot initiative seeking to amend the flat tax was the product of a voter-initiated petition. In all five of these measures, the graduated income tax, alone, was the sole subject of the ballot question. In 1994, for example, the ballot question stated:

"This proposed constitutional amendment would require Massachusetts income tax rates to be graduated, in order to distribute the burden of the tax fairly and equitably. The proposed amendment would require the rates for taxpayers in higher income brackets to be higher than the rates for taxpayers in lower income brackets. The proposed amendment would also allow the state Legislature to grant reasonable exemptions and abatements and establish the number and range of tax brackets. The proposed amendment would eliminate from the Massachusetts Constitution the present requirement that income taxes must be levied at a uniform rate throughout the state upon incomes derived from the same class of property."

Voters rejected this petition by a margin of sixty-five to twenty-eight per cent of votes cast. On the same ballot, voters also rejected, by a margin of sixty-five to twenty-seven per cent of votes cast, an initiative petition that a statute be enacted requiring graduated income tax rates.

b. Initiative Petition 15–17. By August 5, 2015, at least ten registered voters had filed with the Attorney General the initiative petition at issue here, entitled, "An Initiative Petition for An Amendment to the Constitution of the Commonwealth to Provide Resources for Education and Transportation through an additional tax on Incomes in excess of One Million Dollars." The petition would amend art. 44 by adding the following:

"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, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes. In addition to the taxes on income otherwise authorized under this Article, 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. To ensure that this additional tax continues to apply only to the commonwealth's highest income residents, this $1,000,000 (one million dollar) income level shall be adjusted annually to reflect any increases in the cost of living by the same method used for federal income tax brackets. This paragraph shall apply to all tax years beginning on or after January 1, 2019."

On September 2, 2015, the Attorney General certified to the Secretary that the petition "is in proper form for submission to the people; that the measure is not, either affirmatively or negatively, substantially the same as any measure which has been qualified for submission to the people at either of the two preceding biennial state elections; and that it contains only subjects that are related or are mutually dependent and which are not excluded from the initiative process pursuant to Article 48, the Initiative, Part II, Section 2."

After the Attorney General's certification, the proponents of the initiative petition gathered and submitted sufficient additional signatures to the Secretary so that the Secretary transmitted the measure to the Legislature. See art. 48, The Initiative, II, §§ 1, 3, 4, as amended by art. 74. On May 18, 2016, more than one-quarter of the members of both houses of the Legislature voted in favor of the proposed constitutional amendment, and it was referred to the next legislative session. See art. 48, The Initiative, IV, § 4. On June 14, 2017, more than one-quarter of the members of both houses again voted to approve the proposed amendment. This litigation followed.

On October 3, 2017, the plaintiffs filed a complaint in the county court seeking a declaration pursuant to G. L. c. 214, § 1, that the initiative petition does not comply with the requirements of art. 48; they also sought an order quashing the Attorney General's certification and an injunction preventing the Secretary from placing the initiative petition on the general election ballot to be put before the voters in November, 2018. Ten registered voters who support the petition were allowed to intervene in the case. The single justice then reserved and reported the matter for decision by the full court.

The plaintiffs contend that the Attorney General's certification of the petition was improper for three reasons. First, they argue that the petition combines "three very different subject matters: whether to ...