Movement for Supermajorities to Raise Taxes Growing Fast

Published April 1, 2005

Illinois Republican House Minority Leader Tom Cross is proposing legislation that would require a “supermajority” vote in both houses before the General Assembly could raise income or sales taxes, raising the threshold for these taxes from a simple majority to a more restrictive three-fifths majority.

Comparing Supermajority States to All States
  Supermajority States All States
FY 2002 Budget Cuts $2.44 billion $15.19 billion
FY 2003 Tax Increases $65 million $12.82 billion
Ratio of Budget Cuts to Tax Increases 37.52 to 1 1.18 to 1
Compiled by Prof. Michael New, University of Alabama, using data from National Association of State Budget Officers and Michael New, “Supermajority Requirements: A Comparative Political Analysis,” presented at the Midwest Political Science Association meeting, April 27, 2002.

Says Cross, “I think we’ve been too quick, in the past, to try to solve our budget problems by automatically looking at tax increases; I think it’s time we said enough is enough to that line of reasoning.”

This most recent attempt to force “government to live within its means,” as Cross put it, fits the pattern of a growing counter-movement to the tax-and-spend sprees many states have embarked on.

For more than a decade, fiscally conservative legislators, governors, and activists have sought to minimize the ability of elected officials to raise taxes without a legislative super plurality or direct approval of voters. Known as tax limitation amendments (TLAs) or “supermajority” requirements, the measures require majorities of two-thirds, three-fifths, or three-fourths votes of each legislative chamber before a tax can be increased.

Growing Trend

As many as 16 states have a supermajority requirement for tax increases, either statutory or constitutional in nature. Most of these states–Arizona, California, Colorado, Louisiana, Nevada, South Dakota, and Washington–have opted for two-thirds requirements. Others–Delaware, Florida (for corporate income tax increases only), Kentucky, Mississippi, and Oregon–require a three-fifths majority.

The most restrictive requirements exist in Arkansas and Oklahoma, where any tax increase must be approved by a three-quarters majority of members of each chamber.

The supermajority requirements implemented in Michigan and Missouri do not appear on all listings compiled by scholars researching the issue. Michigan requires approval by three-quarters of the legislature on any adjustment to the state property tax assessment. Missouri’s constitution mandates that all tax increases exceeding the revenue limit first achieve a declaration of emergency by two-thirds of each of the legislature’s two houses.

Statutory Versus Constitutional

Many of the first supermajority measures were enacted by statute instead of by amendment to the state constitution. Critics argue this has created a measure without teeth strong enough to constrain tax hikes. Supermajority statutes can be voided, temporarily or permanently, by legislators passing another statute.

Jason Mercier of the Evergreen Freedom Foundation contends supermajority statutes are abused by legislators who simply override the statute for their own interests. “As Washington state legislators have demonstrated,” Mercier said, “taxpayers don’t really have the protection of a supermajority requirement for tax increases unless that tax restriction is found in the state constitution.

“Though Washington State has a statutory 2/3 vote requirement for tax increases,” Mercier notes, “legislators have ‘suspended’ that taxpayer protection with just a simple majority vote. This makes statutory supermajority requirements paper tigers in their actual ability to restrain the spending and taxing appetite of legislators. A meaningful supermajority requirement must be part of a state’s constitution.”

Constitutional or statutory, to taxpayer advocates any supermajority requirement is better than a blank check to raise taxes with a simple majority.

Said Grover Norquist, president of Americans for Tax Reform, “Raising taxes should never be easy, and any obstacle legislators must overcome to reach into taxpayers’ wallets is a good one. Of course, one would favor constitutional requirements, but Rome wasn’t built in a day, and if these requirements create an atmosphere that is favorable to [Taxpayer Bill of Rights]-like tax-and-expenditure limitations, then this is definitely a step in the right direction.”

Permanent Temporary Taxes

Proponents of supermajority requirements frequently note the permanent nature of most “temporary” tax hikes.

When government outlays exceed revenue, they say, some legislators look for short-term solutions like accounting gimmicks and temporary tax increases, none of which actually solves the problem. A case in point is Ohio, where in 2003 a one-cent sales tax increase was passed as a short-term remedy for the state’s budget crisis. State history shows every temporary tax increase has become permanent.

“When taxes go up, they rarely ever go back down, even when they are sold as ‘temporary,'” said State Sen. John Campbell of California (R-Irvine), who speaks from experience in his own state, which has a two-thirds supermajority requirement in place. Campbell points out that supermajority-type checks in the system force greater unanimity among legislators of both parties.

“The supermajority vote to raise taxes in California protects taxpayers by requiring that there is overwhelming support from both parties before taxes go up,” Campbell said. “Otherwise, a temporary change in legislative power or control could result in permanent tax increases.”

Large Observable Effect

Said Michael New, assistant professor at the University of Alabama, “During the budgetary shortfalls [in numerous states] in 2001 and 2002, supermajority tax limits demonstrated their ability to prevent tax increases, protect taxpayers, and steer states toward sound fiscal policies.”

New compares supermajority states and those without a limitation, evaluating their state fiscal behavior (determined by budget cuts versus tax increases) during the budgetary deficits of FY2002. Among states that had comprehensive supermajority requirements and competitive legislatures (dominated by no political party), the ratio of budget cuts to tax increases (in dollar terms) was 37.52 to 1, compared with 1.18 to 1 among all other states. (See table.)


New argues this shows supermajority rules can force legislators to “live within their means.”

Under Fire

While pro-taxpayer groups stress the importance of supermajority requirements as a means to protect taxpayers, the measures currently in place have come under fire many times.

In a highly contested decision in 2003, the Nevada Supreme Court threw out the two-thirds requirement that had been added by citizen initiative a decade earlier. This followed a lawsuit filed by the governor against the legislature, in which he contended a constitutional mandate to “adequately fund education” trumped the supermajority requirement for passing new taxes.

The legislature eventually struck a deal and passed the tax increase on July 21, 2003 with the two-thirds supermajority required.

In California in 2004, activists and interest groups took aim at revoking the limitations set by the passage of the Gann Limit in the late 1970s, which mandated passage of a two-thirds threshold for all tax increases.

Proposition 56, on the ballot in March 2004, would have lowered the required two-thirds constraint to 55 percent. With $60 billion in tax increase proposals pending in the legislature that session, passage of Prop 56 would have been a major setback to the pro-economic growth policies envisioned by Gov. Arnold Schwarzenegger (R).

Taxpayers defeated the measure, dubbed by opponents as a “blank check for higher taxes,” by a vote of 63.5 percent to 34.5 percent.

Ron Nehring, vice state chairman of the California Republican Party, said, “Californians have a real opportunity to enact Governor Schwarzenegger’s reform agenda this year. If the supermajority requirement had been eliminated, we wouldn’t be talking about reform. Instead we’d be debating how much to raise taxes, and reform would be dead.”

Further Plans

The list of states looking to incorporate supermajority requirements to raise taxes is growing and includes Illinois, Indiana, Maine, Ohio, and Pennsylvania, among others. Taxpayer advocate groups in Florida are seeking to strengthen the existing requirement that addresses corporate tax increases only.

Many taxpayer advocates see supermajority requirements as steps not only toward tax restraint, but toward reductions in state spending as well. One activist stated, “You can’t burn down the house if you don’t have the matches.”

Scott LaGanga ([email protected]) is state coalitions manager, and Sandra Fabry ([email protected]) is state government affairs manager, for Americans for Tax Reform.