This is a correct answer.constitutional monarchy>theocracy>papal states>constitutional restoration
There is another method (which could produce base tax over 1000), but in my view it's illegal (because it uses bug in UI). When Papal State popup (red) shows up, go into government tab and change government from theocracy to absolute monarchy. Black popup box will ask you to confirm the change. Now go to the red Papal State box and accept it (government will change to Papacy). Then accept the black popup changing the government to the absolute monarchy and then proceed to theocracy normally.