BOSTON GLOBE: Mass. business leaders launch nonprofit to fight progressives — and ‘Taxachusetts’ label

Thanks in part to the state’s so-called millionaires tax, the old label “Taxachusetts” is back.

Now, a number of prominent business groups and executives are launching what they hope will be a powerful new coalition to beat back high-tax policies that could stifle the local economy.

Top executives in Greater Boston have been quietly raising millions of dollars and drumming up support for what’s being called the Mass Opportunity Alliance, a nonprofit launching this week to highlight the tax burden and high costs of doing business and living in Massachusetts. Its goal is to improve the state’s competitiveness by changing public opinions and lobbying.

The new group, nicknamed MOA, is led by the heads of the Massachusetts High Technology Council, known for its anti-tax efforts, the libertarian-leaning Pioneer Institute think tank, and the Massachusetts Competitive Partnership, a group of big-name CEOs. All three founding members were among the many business groups that unsuccessfully fought the new income tax surcharge on annual earnings over $1 million that voters approved in 2022.

While the MOA won’t get involved in ballot questions this year, its organizers hope to avoid similar losses in the future. Its launch underscores a concern that’s been swirling around the business community and inflamed by the millionaires tax ballot question: that Massachusetts is losing ground to rival states, and that policy makers on Beacon Hill have been slow to respond to the threat.

“The alarm bells went off after the millionaires tax passed,” said Suffolk Construction owner John Fish, one of several big MOA donors. “There were a lot of regrets from the business community. What could have happened? What could have been done? … And I think that was a wake-up call.”

Fish and other supporters say they’re concerned that the extra tax on high earners is prompting people they know to leave the state,while high housing costs and other expenses are driving many in the middle class away. (Massachusetts suffered a net loss of nearly 40,000 people to other states in the most recent year in which data is available.) The pro-business Tax Foundation recently ranked Massachusetts 46th in the nation, a significant fall from previous middle-of-the-road rankings; a tax reform package passed by the state Legislature last year will do little, if anything, to alter that low ranking.

To fight the millionaires tax, some potential donors were reluctant to write big checks because their names would be made public. That will not be the case with the Mass Opportunity Alliance, which is set up as a 501(c)6 organization that does not need to divulge its contributors. The organization can lobby state government leaders but cannot endorse political candidates. Campaign finance laws prevent the MOA from getting involved in ballot campaigns this fall, including with a business-backed effort to fight a question that could undermine the MCAS test.

But the alliance could make ballot question donations in future cycles, according to Chris Anderson, president of the Mass. High Tech Council.

“This really is designed to be a long-term, permanent fixture,” Anderson said. “We’re not organizing around a short-term threat, tax proposal or ballot question, … or any of that.”

The organizers hope to have an executive director for this multimillion-dollar endeavor in place eventually. Much of the communication, including its website, currently is being handled by a national public affairs firm whose identity is being kept secret for now. The organizers also declined to say how much they’ve raised so far.

Among the first initiatives planned: an “Opportunity Report Card” that will regularly measure the state’s competitiveness across several key indicators, from business dynamics to education to the cost of living. (MOA’s first report card gives Massachusetts a C-plus.) Also on tap: a monthly poll to keep tabs on residents’ opinions about everything from the hardship posed by local taxes to why people would consider leaving.

Despite the region’s surplus of business associations, Anderson said there’s no one group solely focused on competitiveness — as opposed to also hosting events, member services, training, and the like.

“This is going to be hyper-focused only on issues of economic growth, stemming the loss of talent, and building prosperity,” said Jim Stergios, Pioneer’s executive director. “[But] we’re not going to change minds overnight.”

The wave of hybrid and remote work ushered in by the COVID-19 pandemic threatens Massachusetts because many workers can choose to live elsewhere. Meanwhile, political and business leaders in many lower-cost states are recruiting Massachusetts talent and companies.

“Other people want to be number one, so they’re hungrier and more aggressive,” said Jay Ash, chief executive of the Massachusetts Competitive Partnership. “Bricks and mortar no longer matter. As a result, you see places that you’d never thought we would be in competition with catching up and in some cases exceeding us in certain areas.”

But some other business leaders aren’t sure Massachusetts needs another business organization.

“Sometimes, it’s not a good thing for the business community to have so many different voices,” said Jim Rooney, chief executive of the Greater Boston Chamber of Commerce. “I don’t think this is going to eliminate any of that. It just adds another one.”

The MOA is sure to face pushback from progressive leaders who argue the concerns about competitiveness are overblown. The left-leaning Mass. Budget and Policy Center just issued a reportclaiming that younger people are leaving at a faster pace than the wealthy. Supporters say the millionaires tax, formally called the Fair Share Amendment, has lived up to expectations, bringing in $2 billion in revenue in its first year, for education and transportation causes. (Federal data showing the incomes of people who left after Fair Share took effect is not yet available.)

“We don’t see evidence of the uber-rich fleeing,” said Max Page, president of the Massachusetts Teachers Association, whose organization poured millions of dollars into the Fair Share campaign. “I see no evidence that there is this massive out-migration. Where we do agree is there’s a cost problem in this state. But it’s not about rich people. It’s about regular people.”

Besides, Page said the MTA, whose group is also behind this fall’s MCAS question, is upfront about the source of its funds: union member dues. Being competitive, he said, is about running great schools, improving infrastructure, and building more affordable housing — not cutting taxes for the wealthy. “We have a different definition of what it means to be competitive,” Page said.

However, the message that Massachusetts isn’t business-friendly may resonate more strongly with the public now that there is no longer a Republican governor to keep the Democrat-run Legislature in check, Stonehill College political science professor Peter Ubertaccio said.

And Rob Gray, a political consultant who has worked with GOP candidates from Bill Weld to Charlie Baker, said the State House has become a “petri dish for higher spending and higher taxes without any significant opposition,” in part because the Legislature is far more liberal today than it was in the 1990s and early 2000s. To succeed, he said, this new group will need a leader who is a “bulldog,” unafraid to publicly criticize the political establishment.

As for John Fish, who turned a local construction business into a $6 billion national juggernaut, he has no plans to leave. That’s why, he said, he’s fighting to make sure Massachusetts remains a good place to live and grow a company.

“How do we come together as a business community and a political establishment and come up with a thoughtful strategy that can take hold over the next five to seven years?” Fish said. “This is a systemic issue right now. … We need to first recognize we’ve got a problem.”