Vestigial Fiscal Constitutions

Authors

Joe Schomberg

Document Type

Article

Abstract

(Excerpt)

This Article examines the history and original intent of fiscal constitutions in the United States, providing helpful context for their usefulness today. It argues that, due to the rigidity of states’ fiscal constitutions, they are ultimately ineffective at preventing state and local governments from incurring more and more debt. Ultimately, it suggests that the weakness of state fiscal constitutions is a result of their functionality being overtaken by increased efficiencies in the capital markets and Tiebout-Tullock markets. Our state fiscal constitutions have suffered the same fate as our wisdom teeth or appendixes—they have become less useful and less relied upon as the relevant market environment matures and becomes more efficient.

This Article proceeds in the following order. Part I explains the nature and history of fiscal constitutions in America. Part II details the many strategies state and local governments employ to legally avoid such fiscal constitutions. Part III contends that the prevailing interpretive approach toward state fiscal constitutions is what renders them particularly rigid and easily sidestepped. Part IV makes the argument that attempts to combat this avoidance of fiscal constitutions through the political process or legal process will likely be unsuccessful. Finally, Part V suggests that state fiscal constitutions have grown vestigial as relevant market forces have become more effective at realizing the original goals that fiscal constitutions were instituted to accomplish.