Amendment 3: Fight Over How Tightly To Cap Taxes

October 2, 2012

An amendment before Florida voters on the November ballot would tighten the state’s rarely-used revenue cap, potentially giving it more teeth – something supporters say will restrain reckless spending but opponents say would gut vital services.

Under Amendment 3, the amount of revenue the state would be allowed to collect and spend would no longer be tied to the growth in the economy — a cap that the state has never bumped into. Instead, it would follow a formula combining inflation and population growth.

For supporters, the proposal will help avoid the wild swings that Florida’s budget has taken over the last decade, smoothing out spending and providing a more robust savings account for when the state falls on more difficult economic times.

“Voting yes on Amendment 3 will send a message to our state leaders that the size of Florida’s government shouldn’t grow faster than the taxpayers’ capacity to pay for it,” said Edie Ousley, a spokeswoman for the Florida Chamber of Commerce, in an email.

But opponents say the amendment would force the Legislature to slavishly follow a rigid formula instead of adjusting spending as necessary. And they say it would handcuff lawmakers from addressing the state’s loophole-ridden tax code in a way that might bring in additional money for schools and infrastructure.

“We do not need to reduce our future to a mathematical formula,” said Charles Misted, associate state director for the AARP.

The force behind Amendment 3, approved by the Legislature in 2011, was Senate President Mike Haridopolos, R-Merritt Island. At the time, Haridopolos was gearing up to challenge Democratic U.S. Sen. Bill Nelson, though Haridopolos eventually abandoned his bid.

But as he leaves office because of term limits, Haridopolos said his proposal will help future legislative leaders avoid the headaches he and others had to deal with after years of spending inflated by an economic boom gave way to deep cuts triggered by an economic bust.

“What we’re trying to do with this amendment is just provide common-sense consistency,” he said.

Haridopolos also noted that some of the support for those opposing Amendment 3 comes from out-of-state groups.

Opponents, though, sense an effort to protect special interest tax breaks and constrict funding for public services under the guise of lowering taxes and responsible government.

“I know a wolf when I see one,” thundered Richard Dunn, senior pastor at Faith Community Baptist Church in Miami and a former Miami-Dade commissioner, during a rally Monday on the steps of the old Capitol. “This Amendment 3 is a wolf. And it’s a wolf in sheep’s clothing.”

Critics say government costs often grow faster than inflation, artificially keeping the new limits too low. They’ve taken to citing a study by the Center on Budget and Policy Priorities — a left-leaning think tank based in Washington, D.C. – saying the proposal would slash $11 billion from state spending by 2021, including more than $2 billion in the final year.

That contrasts sharply with estimates from legislative staff, which said in a 2011 analysis that the state would stay well below the cap until at least the 2019-20 fiscal year.

Rich Temple of the AFL-CIO, one of the groups fighting the proposal, mocked supporters’ argument that the amendment would provide certainty to businesses.

“It certainly guarantees that Florida will continue to remain at the bottom in all of the key indicators of a healthy society forever,” he said.

Exhibit A for opponents of the proposal is Colorado. Voters there approved a similar measure in 1992, but eventually suspended the measure because of an effect known as “ratcheting,” which limited lawmakers’ ability to use the revenues from an economic recovery to offset earlier reductions.

Jeanette Baust, a Denver sociologist, said Florida would follow the same path if it accepted the “snake oil” that was sold to Colorado voters.

“History will repeat itself if you do the same thing Colorado did and pass this amendment,” she said.

Haridopolos said that’s not true. He said Colorado ran into some of its problems because of spending requirements in Colorado in areas like education. And the Florida amendments provide safeguards, he said, that would allow a two-thirds majority in the Legislature to spend more money than the cap would allow if there’s an urgent need to do.

“We learned from the Colorado success,” he said, “and some of their difficulties.”

By Brandon Larrabee, The News Service of Florida

Comments

5 Responses to “Amendment 3: Fight Over How Tightly To Cap Taxes”

  1. Mark on October 2nd, 2012 5:54 pm

    If the Chamber of Commerce is for it, Then I am against it.

  2. S.L.B on October 2nd, 2012 10:45 am

    He said, she said, they said…oh my…I’m more confused now after reading all their opinions than I was before. I agree with Walnut Hill Roy, we need a format of information that lays it all out on the line verses what somebody thinks, says or believes. Unless we get that, how will we be well informed enough to make a logical decision that is best for our County?

  3. Walnut Hill Roy on October 2nd, 2012 8:10 am

    I’d like to read a real politically neutral list of the pros and cons of the change; time was (sigh, I’m showing my age) when the newspapers would do that. Today’s media are so far right or left that you can’t count on them for a politically neutral list of anything.

  4. Barry on October 2nd, 2012 7:41 am

    If the AFL-CIO is against it, then I am all for it.

  5. Jane on October 2nd, 2012 5:50 am

    This a two edged sword………

Written by William Reynolds · Filed Under News