Do legislative procedures affect tax expenditures?

Legislative procedures that expose tax expenditure proposals to scrutiny outside the taxation committees can improve a state legislature’s ability to control its tax base. These procedures -- fiscal notes, special subcommittees, joint taxation and spending committees, and bill size C move decisions away from the exclusive control of committees whose interests may be more narrow than the interests of the legislature as a whole. Strong legislative procedures do not, and should not, eliminate the passage of new tax exemptions, but it is desirable to enact only exemptions that match major policy objectives. Several factors, including an important economic special interest, a tax rate increase, or a major shift in intergovernmental fiscal relations, can boost an exemption past even the strongest procedures. Procedures appear to be most effective in limiting exemptions with a relatively small fiscal effect.