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CACR 6 Threatens State's Long-term Fiscal Health

by: William Tucker

Mon Mar 14, 2011 at 06:00:00 AM EDT

CACR 6 proposes to amend the state's constitution to require a three-fifths vote in both chambers of the legislature to impose new or increased taxes or license fees.

The New Hampshire Fiscal Policy Institute details why this would be unsound fiscal policy and how it would threaten the state's long-term fiscal health.

[S]tate budget deficits tend to emerge during economic downturns .... Erecting procedural barriers to tax increases ... means that policymakers would either have to enact deeper spending cuts than would otherwise be the case or would have to rely upon short-sighted accounting gimmicks to bring revenue and expenditures into balance.
A supermajority requirement would cede control over any number of important priorities to a minority of the legislature. ... [T]hey could also delay or halt consideration of other critical legislation ... for concessions on other, potentially unrelated issues.
William Tucker :: CACR 6 Threatens State's Long-term Fiscal Health
The ostensible purpose of the proposed resolution is to make the enactment of future tax increases more difficult and, by extension, to keep taxes in New Hampshire low. Yet, the level of taxation in the Granite State is already exceptionally low — and has been for some time -– even in the absence of a supermajority requirement.
In sum, the proposed supermajority requirement ... would unduly constrain the flexibility New Hampshire needs to respond to changing economic circumstances ... and would likely lead to a greater reliance upon temporary solutions to future budgetary shortfalls, more frequent legislative stalemates, and higher borrowing costs.

It's worth noting that seven of the ten states named by the Pew Center on the States as being in fiscal peril impose a supermajority requirement to raise revenue or ratify budgets. Pew identified this constraint as one of the common threads among the states in peril.

CACR 6 is scheduled for a House floor vote on Tuesday, March 15.

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CACR 6 Threatens State's Long-term Fiscal Health | 6 comments
How you grow a state (4.00 / 1)
by limiting it's growth, I have no idea.  How are they going to fund their army?  Or are we all going to serve for free?  Not even going to buy me my blue musket?
California the most obvious example (4.00 / 4)
Despite the downturn, still one of the richest economies in the world, yet on the brink of bankruptcy.

So much of our current malaise is a result of supermajority requirements, which absolve ruling parties (including Senate Democrats) from responsibility for action. In functional democracies ruling parties rise and fall on the success of their actions, not on how successful they are at convincing people they are powerless.

We have a mechanism in this state for dealing with people that impose unpopular taxes -- a biannual vote.  


The result of this passing will be to drive property taxes higher... (0.00 / 0)

over time, as the state's permanent deficit accelerates the pressure on the legislature to slash aid to communities and down shift costs to them.

Surely this was mentioned in committee when the hearing for the bill was heard and it was execed. Yet here is the puerile blurb that the legislature, the vast majority will depend on for their insight on the bill, will have to work from.

This bill simply requires that the members of the general court actually vote on tax bills with a 60% majority.  Recent history in this storied legislature proves that a constraint on both the majority and the minority by our constitution.  When a tax increase is required the public, our employers, can be assured that the increase is accepted by a large number of their elected officials.  A minority of the committee objected that such a requirement would slow the growth of the state and make passing a balanced budget difficult.  Yes, it will make it more difficult and more open, more visible and more responsive to the people.  An escape clause is built into the law to prevent the stagnation associated with bond payments in other states by allowing a majority vote and bond payments.

This from a clown named Ulery, famed for his 'all signs must be in six languages' bill. I have news for him. We already have a system to make sure that legislation is accepted by a large number of elected officials'. It's called a majority and somehow it's worked for more than 200 years. And why this bill will make the process "more open, more visible and more responsive to the people" is a mystery.

Note the exception -- bond payments. (0.00 / 0)
That's an admission that what our financial class prefers is to lend, rather then pay their fair share of taxes.  If public corporations are forced to borrow, then the hoarders of dollars have a secure source of income for which they have to do no work.  And, if they're not spend-thrifts, that pot keeps growing, increasing their interest in lending rather than spending on public needs.
[ Parent ]
does this mean R's forsee their own demise? (0.00 / 0)
i mean, if they were confident about maintaining their majority going forward indefinitely, would they want to give such power to minority dems?
Whatever happened to "run government like a business?" (4.00 / 2)
Have you ever heard of a corporate board enacting a rule requiring a supermajority vote to raise product prices?

Of course not! They know that a successful business needs to be more nimble and able to respond to changes in the market.

CACR 6 Threatens State's Long-term Fiscal Health | 6 comments

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