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Wisconsin Legislative Supermajority for Tax Increases Amendment (2016)

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A Wisconsin Legislative Supermajority for Tax Increases Amendment may appear on the November 8, 2016 ballot in Wisconsin as a legislatively-referred constitutional amendment. The measure, upon voter approval, would prohibit the state legislature from increasing the sales, income or franchise taxes unless the bill is approved by a two-thirds majority. The prohibition would not apply in situations where the legislature passes a joint resolution to put a advisory question regarding the potential tax on the ballot and a majority of voters approve the tax increase proposed in the question.[1]

Currently, a three−fifths majority vote is required in the legislature to increase taxes.

Text of measure

Constitutional changes

AJR 79 would amend Section 8 of ArticleVIII of the Constitution of Wisconsin to read:[1]

Section 8 (1) On the passage in either house of the legislature of any law which imposes, continues or renews a tax, or creates a debt or charge, or makes, continues or renews an appropriation of public or trust money, or releases, discharges or commutes a claim or demand of the state, the question shall be taken by yeas and nays, which shall be duly entered on the journal; and three−fifths of all the members elected to such house shall in all such cases be required to constitute a quorum therein.

Section 8 (2) Except as provided in sub. (3), no house of the legislature may pass a bill that increases the rate of the state sales tax or that increases any of the rates of the income tax or franchise tax unless the bill is approved by two-thirds of those members present and voting.

Section 8 (3) Subsection (2) shall not apply if the legislature passes a joint resolution requiring a statewide advisory referendum on the question of whether the legislature should authorize the tax increase provided in the bill and a majority of voters voting at the referendum vote to approve the tax increase.

Support

Supporters

Opposition

Opponents

  • Wisconsin Council on Children & Families[2]

Arguments

  • Jon Peacock, director of Wisconsin Budget Project, said that AJR 79 would have a number of negative "unintended consequences," including:[3]
  • “The most worrisome of those [consequences] is the strong possibility of higher costs to finance construction. States with constitutional constraints on the options for balancing their budgets run a significant risk of getting lower ratings for the bonds they sell, which raises their interest rates and can significantly increase the cost of borrowing for major construction projects
  • “Bond rating agencies give higher scores to states that don't have constitutional limits on their ability to raise revenue when necessary to balance the state budget. In downgrading Nevada's credit rating, Moody's noted that Nevada's "supermajority requirement to raise taxes presents a hurdle to achieving balance on an ongoing basis." Moody's also cited Arizona's supermajority requirement as a reason for reducing that state's bond rating.”
  • “Another unintended consequence of creating a higher hurdle for tax rate increases is a shift to other types of state and local revenue. By holding down income tax revenue, the state will have less funding for property tax relief, which will put upward pressure on local property taxes… The proposed change in the state constitution also would make it more difficult for state lawmakers to pass legislation that makes comprehensive tax reforms. It wouldn't be possible without a two-thirds vote for legislators to pass a revenue-neutral bill that raises income or sales tax rates in order to pay for a substantial cut in property taxes.”
  • “In addition, when state policy-makers need to raise revenue to balance the state budget, they would be much more likely to raise fees, such as university tuition. Although the proposed amendment allows tax rates to be increased by referendum, the timetable for accomplishing that will generally make it an unworkable solution when it comes time for legislators to pass a biennial budget bill.”
  • “Although supporters argue that a supermajority requirement is necessary to hold down tax rates, history shows this not to be the case. The three tax rates that would be restricted by the proposed constitutional change have rarely been increased in Wisconsin. In fact, the state's sales tax rate and corporate income tax rate have not been raised in 32 years. The only increase in the individual income tax in the past 28 years, which took place in 2009 during the recession, affected only about one out of every hundred tax filers.”

Path to the ballot

See also: Amending the Wisconsin Constitution

The Wisconsin State Legislature is required to approve the amendment by majority vote in two successive sessions. AJR 79 was approved for the first time in the Wisconsin Assembly, with all Republicans voting for and all Democrats voting against, on February 11, 2014.[4]

Assembly vote

February 11, 2014 Assembly vote

Wisconsin AJR 79 Assembly Vote
ResultVotesPercentage
Approveda Yes 60 60.61%
No3939.39%

See also

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