If the people’s elected representatives want to take more money out of their constituents’ pockets, they will have to reach a broader consensus before they can do so. That is really all that a supermajority requirement for tax increases says, although critics say it is radical and draconian. In her State of the State address, Gov. Christine Whitman endorsed the idea of requiring a 2/3 supermajority for state tax hikes in New Jersey. On Tuesday April 14, she will unveil her formal proposal. State Senator Walter Kavanaugh and State Assemblyman Guy Gregg have proposed a less restrictive 3/5 supermajority requirement.
Requiring a broader consensus to raise taxes is a no-brainer in a high-tax state like New Jersey. Despite the recent income tax cuts, New Jerseyites still face one of the highest state tax burdens in the nation. Only 12 states have a higher per capita state tax burden than New Jersey. When local taxes are included, New Jersey is fourth highest (16th highest as a percentage of income). At 6.37 percent, the top income tax rate is still much higher than it was in 1990 (3.5 percent) before Gov. Jim Florio’s record-breaking tax hike. And since 1980, per capita state spending in New Jersey has gone up faster than in every other state in the nation except one. Only Connecticut has increased per capita spending faster than New Jersey.
Some critics of a supermajority requirement say it is a risky measure that would not work in New Jersey. However, 13 other states already have such requirements. Nine of those states have stiffer requirements than the 3/5 measure being considered in the legislature—seven have a 2/3 requirement, like Gov. Whitman has endorsed, and two have a 3/4 requirement.
Other states have gone even further. Five states now require voter approval for tax increases, a substantially more difficult barrier. In Florida, where taxes are already much lower than in New Jersey, tax hikes must be approved by a supermajority of the voters.
A supermajority requirement does not mandate a tax cut, nor does it prohibit tax increases. Supermajority requirements merely ask legislators to reach a broader consensus when they want to take more money out of their constituents’ pockets.
There is some evidence that supermajority requirements have at least helped to restrain the growth of taxes. From 1980 to 1996, state tax burdens as a share of personal income increased by 1.1 percent in states with supermajority requirements. Taxes rose five times faster in states without such requirements.
In 10 states, residents face higher top personal income tax rates today than they did in 1990. None of those states require supermajority approval for tax hikes. None of the 13 supermajority states have higher top rates today than they did in 1990, and three of them have lowered their top rate in the 1990s.
In Arizona, before the supermajority requirement was enacted in 1992, taxes had been raised eight times in the previous nine years. Since then taxes have been cut five years in a row.
Opponents of supermajority requirements for tax increases often claim that they are radical, reckless measures that will require draconian cuts in government spending on schools, roads, children and the poor. For instance, the New Jersey Education Association recently told a state Senate committee that a supermajority requirement “threatens the future of public education.”
While supermajority requirements can provide a modest amount of tax relief by making it less likely that tax hikes will be imposed, make no mistake, those requirements are truly modest measures. The idea that requiring more than a simple majority to increase taxes will gut the budget is ridiculous. A supermajority requirement does not mandate a tax cut, nor does it prohibit tax increases. Supermajority requirements merely ask legislators to reach a broader consensus when they want to take more money out of their constituents’ pockets.
Furthermore, since the supermajority requirements proposed in the legislature and by the governor are in the form of constitutional amendments, they would have to be approved by the voters before taking effect. Therefore, enacting those measures will not by itself impose a supermajority requirement. Instead, it would merely give New Jersey taxpayers an opportunity to decide whether or not they want to make it more difficult for their elected representatives to increase their taxes. What could be more reasonable? Why not let the voters decide? After all, it is their money.
Today Americans have to spend more on taxes than they do on food, clothing, shelter and transportation combined. Other states with lower taxes than New Jersey are prohibiting their legislatures from raising taxes without the explicit permission of the voters, a much stiffer restriction than a supermajority requirement. Is it really too much to ask that more than a simple majority of the legislature be required to raise New Jersey’s tax burden even higher?