Minutes before my recent meetup with Jay Gonzalez, the democratic nominee for governor of Massachusetts, he was marching among signs reading “Yankees = Scabs” outside the Boston Common Ritz Carlton. Up and down the sidewalk, hotel workers from Local 26 were striking for a contract. The picket was loud, with demonstrators chanting into megaphones and banging away on empty cans.
After we found some quiet nearby outside of a coffee shop, I asked Gonzalez to explain his tax plan; among other things, he’s proposing a new levy on the largest university endowments to fund transportation infrastructure and state colleges. The idea has received criticism from both universities and also from Gonzalez’s opponent, incumbent Gov. Charlie Baker, who is leading in recent polls.
Gonzalez seemed tired from the trail but determined. Within earshot of striking workers, he spoke about combating wealth inequality and reinvesting in crumbling infrastructure and public education.
Can you explain your endowment tax plan?
This is a proposal to impose a 1.6 percent [tax] on the value of endowments of universities in Massachusetts who have endowments that exceed a billion dollars in value. And that 1.6 percent tax would generate one billion dollars each year that would be dedicated to improve our education and transportation systems in Massachusetts, which we desperately need to do.
It would go to make childcare and preschool more affordable for families. It would go to help make our public schools work for every child in this state; we have huge disparities, huge achievement gaps. Lower income districts in particular don’t have the resources we need. This will help get every school to be great. It would help make our public universities and community colleges more affordable and debt free for any resident who wants to go.
And our transportation system is one of the worst in the country. It’s affecting people’s quality of life every day. Traffic is terrible. People are paying higher fares for disabled trains and reduced bus service. We have to do better at this.
We’re Massachusetts. We have always believed we can overcome every challenge. We’ve always been a leader. And in order for our economy to keep growing, we need to invest in the most important asset, which is our people. And these are two of our biggest challenges holding people back.
I think it’s a fair proposal. These universities have accumulated enormous wealth, thanks to their tax-exempt status. And for those who have accumulated over a billion dollars in their endowments, I think this is a modest tax that would enable them to do everything they do today and allow their endowments to still grow but at a slightly slower rate, and make a huge difference for working families across this state.
You use the word “fair,” and you’ve used it before to talk about this plan. What do you mean by this?
Let me give you an example. Harvard gets the equivalent of—it was reported—$48,000 in government subsidies and support for every undergraduate student. The state of Massachusetts spends $8,000 for every student at UMass Boston. There are big disparities.
The wealth gap, the income gap in our society has gotten to the point where it is starting to drag us backwards. And it’s going to really start dragging us backwards if government doesn’t step in to address it. And so what I’m trying to do is ask those at the top, those who’ve benefited from public policies that have enabled them to accumulate enormous wealth, like the tax-exempt status for these higher-ed universities, to give back a little and pay a little bit in taxes that is going to enable us to build a stronger community for everybody.
That’s what I mean by fair: We are all in this together. These universities are great. I’m not attacking them, I don’t see them as the enemy; we’re so lucky to have them in this state. They’re huge drivers of our innovation-oriented economy. It’s great the extent to which they use their own resources to provide financial aid to their students who otherwise wouldn’t be able to go to their schools.
But because of these public policies, this tax-exempt status that has enabled them to accumulate this huge wealth and do all the great things they do, [colleges and universities are] in a position to help strengthen the community for everyone else. And that’s what I mean by believing this is fair. This shouldn’t prohibit them from doing everything they do today and all the important things they provide to us as a community. This would ask a little bit from them to help make the community stronger for everyone else.
The Harvard Crimson opposes the plan. Is Harvard particularly penalized?
I would argue they’ve particularly benefited from the tax-exempt status and have accumulated more wealth than pretty much any institution I’m aware of. Their endowment is now the size of the annual state budget. It’s $39 billion in this last year. It grew by $2 billion. After they provided financial aid to students who need it. After they make all the investments they make in covering their own operating expenses and in research and all the other positive benefits they provide. After all that their endowment still grew by $2 billion in the last year.
So, they are, because of these policies, accumulating huge wealth. And they’re hit differently by the tax based on the amount of wealth they’ve accumulated. But I also think it is affordable for Harvard and for each of these other institutions.
This proposal is different from the Republican tax plan to tax endowments in that the revenue will benefit transportation and education, as opposed to individuals and corporations. But some people are saying that this plan is actually just taking wealth from one sort of public good, which is universities, and bringing it to another public good. Shouldn’t we be taxing entities that aren’t nonprofits?
I’m not disputing that universities provide a public good. And that’s why they’ve had the benefit of this tax-exempt status. And that’s why … unlike Donald Trump, who maybe viewed them as the enemy, I don’t. I’m thrilled that they’re here. We’re fortunate to have them. I understand and am grateful for the ways they contribute to our economy and our community here in Massachusetts. It’s a unique asset we have.
But that’s a different question from: Can they, those who have benefited so much from this public policy to accumulate enormous wealth, can they share some of that to invest to make a stronger economy for everyone else? And I believe they can. These universities are different from lots of other entities in our economy and lots of other institutions in the sense that they have accumulated enormous wealth. And that is the only reason I have come up with this proposal, which, by the way, Donald Trump didn’t initiate. This is a proposal that has been considered for many years, there’s been legislation pending on Beacon Hill in Massachusetts to do something similar to this for a long time. I think it’s a fair proposal for the reasons I described, and I don’t think it’s going to adversely impact those institutions, and it will make a huge difference for working families across this state. And they are my top priority.
As important as these universities are to our economy, nothing is more important than our people. And having a great transportation system to improve mobility, having a great education system to make sure we continue to have the best-educated workforce in this country and the world, that is going to be a much bigger driver of our economic growth than anything else.
Moving off of this topic: From what I’ve seen, and what’s been reported, two of the biggest challenges that your campaign faces are first, name recognition; people don’t know you. And, second, if they do, how do you distinguish yourself from Gov. Baker?
So on the second point, I’m not worried at all about the differences between us, they’re huge. And as more and more people are tuning into this race and understanding them, we’re earning their support. On the differences, quickly: He’s a status quo governor. He’s totally satisfied with the world as it exists. His number-one operating principle right out of the Republican playbook is no more taxes. …
And I’m saying, let’s be Massachusetts. Let’s aim high. Let’s take on these big challenges that are holding people back and be honest about the fact that we’re going to need new revenue to do it. And I’m going to ask the wealthy to pay their fair share in order to make investments to fix our transportation system, to make our education system work for everyone, and address the challenges holding people back. So big differences between us.
I also think it’s really important that we have a governor that’s going to stand up for every single person in this state. For all the little guys out there. Charlie Baker, you know a lot of people’s starting point is, “Well, I’m just grateful, he seems nice, he’s not a crazy right-wing extremist, aren’t we so lucky.” But that’s not good enough. That shouldn’t be the measure of whether our governor is doing a good job and standing up for everyone.
He’s actually been complicit with Donald Trump on immigration issues, opposing Syrian refugees resettling here, committing the Massachusetts National Guard to the Mexican border to separate kids from their families. It took a lot of pressure for him to change his position on that.
I am going to be consistent on this issues. He’s also asking the people of Massachusetts to send Geoff Diehl to represent us in the United States Senate, and replace Elizabeth Warren. Geoff Diehl, who was the co-chair of Donald Trump’s campaign in Massachusetts. Just as an example, Charlie Baker’s pro-choice. You can’t be pro-choice and want to send someone to the United States Senate who’s going to do everything he can do undercut a woman’s right to choose. So there’s a big difference on those issues between the two of us.
In terms of name recognition, nobody knew who I was when I started this campaign. This is the first time I’ve ever done this. Lots of people are distracted with all the stuff going on in Washington. People are just starting to tune in to this race. And as they do, we’ve got a huge grassroots campaign that’s engaging them, we’re engaging in one-on-one interactions knocking on tens of thousands of doors every week, [making] tens of thousands of phone calls, out talking to people at events. And when we’re engaging people and getting people to think about this race for more than five seconds, we are earning their support.