SJC Archives - Pioneer Public Interest Law Center

Action seeks to bring Massachusetts into compliance with recent U.S. Supreme Court ruling

BOSTON – The Pioneer Public Interest Law Center and Greater Boston Legal Services have filed an action with Massachusetts’ Supreme Judicial Court (SJC) to enjoin the City of Springfield from foreclosing on a home worth about $230,000 because of a $22,000 unpaid tax bill without returning the more than $200,000 difference between the value of the home and the tax liability to the homeowner.

The action comes after the U.S. Supreme Court unanimously found earlier this year in Tyler v. Hennepin County that a Minnesota statute substantially similar to the Commonwealth’s “equity theft” law was unconstitutional because it denied just compensation to a homeowner for the taking of her property. State Attorney General Andrea Campbell recently opined that Tyler renders the Massachusetts law, known as Chapter 60, unconstitutional.

“In Tyler, the Supreme Court sent a clear message that any surplus beyond the tax debt must be returned to the homeowner,” said Pioneer Public Interest Law Center President Frank Bailey. “Massachusetts is one of a minority of states that has a law like Minnesota’s, and the Court’s ruling makes it clear that such laws are unconstitutional and therefore unenforceable.”

In Tyler, the Court unanimously ruled in favor of Geraldine Tyler, an elderly woman who had lost her home valued at $40,000 because of $15,000 in unpaid property taxes. Pioneer Public Interest Law Center filed an amicus brief in the case arguing that the Minnesota statute was unconstitutional.

In the Massachusetts case, Ashley Mills is on the verge of losing her Springfield home worth around $230,000 and for which the mortgage has been fully paid, due to a $22,000 property tax debt. Currently, Chapter 60 allows Springfield — or a private actor to whom a municipality sells its right to foreclose — to keep the more than $200,000 difference between the home’s fair market value and the taxes owed.

Mills, 25, lives with her 22-month-old son and disabled mother in the home she inherited from her grandmother. The home is her only financial asset. If it is foreclosed on and she does not receive the more than $200,000 of remaining equity after the tax debt is satisfied, Ashley, her toddler, and her disabled mother are at risk of becoming homeless.

In 2016, Mills was unable to pay $1,636.70 in property taxes she owed. Over the next three years, she entered into payment agreements with the city, but was unable to catch up, largely due to a punitive 16 percent interest rate and other charges imposed under Chapter 60. In May, the City of Springfield filed a motion in the Massachusetts Land Court for judgment of foreclosure.

“Ms. Mills will continue to use every avenue available to pay her taxes and keep her home,” said Catherine M. Kay, Supervising Attorney at Community Legal Aid, who represents Mills in the Land Court foreclosure case. “But those options are limited at this point. If she cannot save her home, she should at least receive the equity in it.”

Ashley Mills’ home is but one example among dozens of unconstitutional tax takings in Massachusetts this year. As a result, in addition to enjoining the City of Springfield from taking her home, the Pioneer Public Interest Law Center and Greater Boston Legal Services are also asking the SJC to enjoin all use of Chapter 60 takings for 90 days.

The action is meant to give the state Legislature time to amend the law to conform with Tyler and allow for a permanent injunction that would prevent Springfield from taking Ms. Mills’ home unless the city makes a provision to turn over, in a reasonable time, the difference between the fair market value of the home and the amount Mills owes in taxes.

Prior to Tyler, 13 states had laws similar to Chapter 60 and the Minnesota statue the Court struck down. Since then, Minnesota, Maine and Nebraska have changed their laws. Illinois has frozen sales of the right to foreclose.

“Low-income households are especially vulnerable to tax foreclosures and Massachusetts has failed to provide these homeowners with realistic options to repay tax arrears,” said Todd S. Kaplan, Senior Attorney at Greater Boston Legal Services. “We are asking the Supreme Judicial Court to stop tax foreclosures while the Legislature works to align the tax foreclosure process with Tyler. The Legislature has an opportunity to ensure that tax foreclosures are a last resort and are done in accordance with the Constitution.”

By not requiring that the Attorney General present an accurate, impartial summary of the tax hike amendment the MA SJC discounts the ideal of an informed voter

BOSTON – Today the Massachusetts Supreme Judicial Court missed an opportunity to reaffirm a basic tenet of American government: An informed electorate is necessary for a healthy democracy. The SJC’s decision will prevent Massachusetts voters from having an accurate description of the tax hike amendment to the state Constitution when they cast their ballots in November.

PioneerLegal filed an amicus brief in support of the lawsuit challenging the Attorney General’s summary language and “yes”/”no” statements that describe the amendment.

The proposed amendment to the state Constitution would add a 4 percent surtax on all annual income over $1 million, including capital gains (sales of homes and other assets) and most small business pass-through income. The proposed summary language put forward by the Attorney General and the Secretary of State reads that revenue from the tax would be dedicated to fund public education and transportation.

“While revenue from the tax would be deposited in transportation and education accounts,” said Frank J. Bailey, President of PioneerLegal, “there is nothing to prohibit lawmakers from diverting money previously dedicated to transportation and education to different purposes, as has occurred in other states.”

Speaking about the need for transparency in the constitutional amendment process, Bailey noted that: “a ballot initiative that seeks to amend the Massachusetts Constitution must be fairly described to voters. Absent an accurate summary of the effect of this vote, homeowners, small business owners, and retirees may well be surprised by the implications of a vote in favor of the amendment. Voters should never be surprised.”

Among the key points in the PioneerLegal brief authored by Daniel P. Ryan, Caroline A. Kupiec, and Jillian Friedmann of Sullivan & Worcester, are:

The Attorney General’s own brief on an identical proposal in 2018 conceded that surtax revenues are fungible and may not result in any increase in appropriations for education and transportation. In the argument of the case before the Supreme Judicial Court, the Attorney General’s counsel also conceded this point and Chief Justice Gants made the same point.
The Legislature made their intentions crystal clear by rejecting two amendments (by votes of 154-39 and 156-40) requiring new revenues to be invested in addition to existing expenditures.
Finally, the brief provides a close analysis of the experience in California, where revenues derived from a similarly “dedicated education” tax largely substituted existing appropriations, which were then diverted to other purposes.

Posts

Public Interest Law Firms File Direct Action with SJC to Enjoin Use of ‘Equity Theft’ Law

Action seeks to bring Massachusetts into compliance with recent U.S. Supreme Court ruling

MA Court Misses Opportunity To Reaffirm A Core Pillar Of Democracy

Stay Informed