Do States Circumvent Constitutional Supermajority Voting Requirements to Raise Taxes?

Abstract

To constrain legislative taxing power, 16 U.S. state constitutions require a supermajority in both chambers to increase or impose taxes. Both supporters and opponents of the requirement argue that its effect fades away because states circumvent it in various ways, especially by raising fees that are not subject to the requirement. Existing literature, however, offers little and inconsistent evidence on whether the effect decays over time and whether the decay results from fee hikes. This article documents legal cases to show the ways in which states have responded to the requirement, estimates whether the effects of the requirement decay over time, and tests whether states raise fees instead of taxes after adopting such a requirement. Using state-level panel data, I find that the initial effectiveness of the requirement on tax burden does decay approximately a decade after enactment and that the decay is not the result of fee increases.

Finally, Nebraska: A Synthetic Control Analysis of Legislative Structure

“…More recently, S. Lee (2014, 2018) showed that supermajority requirements are generally only successful at limiting tax burdens in the short run. Keele, Malhotra, and McCubbins (2013) found no evidence that term limits impacted spending one way or the other.…”

“…For example, Kousser, McCubbins, and Moule (2008) found that tax and expenditure limits had virtually no constraining effect on state governments. More recently, S. Lee (2014Lee ( , 2018 showed that supermajority requirements are generally only successful at limiting tax burdens in the short run. Keele, Malhotra, and McCubbins (2013) found no evidence that term limits impacted spending one way or the other.…”

Revisiting the effect of supermajority requirements on fiscal outcomes

“…Knight (2000) and Lee et al (2014) record the date of adoption as 1966, while Bradbury and Johnson (2006) records the date of adoption as 1921, and Lee (2018) records the date of adoption as 1974. 11 As pointed out by Bradbury and Johnson (2006) and thoroughly documented by Lee (2018), supermajority requirements are not uniform across states and can target expenditures, revenue, or both. Thus, one might think that the use of the different supermajority lists is based on the specific fiscal variables being analyzed.…”

“…Lee (2018) offers several criticisms of the 2SLS approach. For example, she points out that one instrument used in Lee et al (2014), the availability of voter initiatives, is arguably directly related to spending and taxing outcomes.…”

“…Data on the supermajority states and years of adoption come from a variety of sources. Knight (2000), Bradbury and Johnson (2006), Lee et al (2014), and Lee (2018) are important sources for this information. In particular, Lee (2018) provides the constitutional provisions outlining supermajority requirements and the years in which these were adopted.…”