Legislature Continues to Work Towards Requiring a Supermajority to Raise Taxes
In the future, will a supermajority of the Legislature be required to raise tax rates? The current Legislature continues to take steps to move us closer to such a requirement.
When the Wisconsin Budget Project last posted on this issue, it was to report that the Governor had proposed a bill in the special session that would require a two-thirds majority of the Legislature to raise the rates for the sales, individual income, or corporate income taxes. The supermajority requirement would not apply if a statewide referendum approved the hike.
That supermajority bill has passed the Assembly and is scheduled to be voted on in the Senate on Tuesday. Meanwhile, a more restrictive proposed constitutional amendment has been introduced. Unlike the bill, the proposed amendment does not include a provision to bypass the supermajority requirement if a statewide referendum approves an increase in the tax rate. The amendment as introduced does not include a provision in an earlier version of the amendment that extended the supermajority requirement to increasing fees.
In order to amend the constitution, the resolution (SJR 8) must be approved by two consecutive legislatures and a statewide referendum.
A month ago, the Wisconsin Council on Children and Families issued a statement describing the disadvantages of adopting a supermajority requirement. This statement, which is even more relevant today given the recent actions of the Legislature, warns:
“Requiring a two-thirds vote in each house of the legislature for tax rate increases is likely to result in damaging budget cuts, including cuts in state expenditures for property tax relief. Although the supermajority requirement would hold down taxes on income, sales and corporate profits, it will put upward pressure on fees and local property taxes. As a result, many taxpayers may not benefit much financially, while the services they rely on would almost certainly suffer.” (You can read the full text of the release here.)
The Legislature seems determined to pass measures that would require a supermajority to raise taxes. If realized, these measures would make it nearly impossible to reform our tax code. Even now-Secretary of Revenue Rick Chandler’s fall 2010 proposal to increase the sales tax to pay for reductions in the property and income taxes would require a supermajority to pass.
The supermajority constitutional amendment would tie legislators’ hands in a time when we desperately need flexibility to deal with the state’s revenue shortfall. The size of the budget hole demands we take a balanced and responsible approach to budgeting, rather than limiting the state’s options for climbing out of the hole.