Revenue Cap Defeated in TBRC and Legislature;
Stay Tuned for Full Analysis of TBRC Amendments
The Florida Taxation and Budget Reform Commission (FTBRC) meets every 20 years and has the power to place proposed constitutional amendments directly on the ballot for approval by voters. In order to place an amendment on the ballot, 17 of the 25 commissioners must vote in favor of it.
On Apri 14, CP 45, which is modeled after Colorado's 1992 Taxpayer Bill of Rights and called TABOR, was defeated after receiving three votes fewer than the required 17. More than 1200 CIVIC members signed a petition in just three days and individually emailed commissioners urging them to vote against the measure.
CP 45 would have capped revenue growth at the state and local level using a formula based on population growth plus inflation. Any additional revenue would be returned to citizens and exceeding the cap would require a popular vote. As a soundbite, this plan seems to make perfect sense. But in practice, it has been a disaster.
As a result of TABOR in Colorado, government spending on education and health care has dropped precipitously. Colorado now has the worst ranking among all states for the number of children lacking health coverage, ranks 49th in spending on K-12 and 48th in spending on higher education. In addition, the state's ability to attract new businesses and new jobs has suffered because of the decline in necessary infrastructure, like workforce development and transportation. In 2005, the effects of TABOR on Colorado's economy were so severe that a broad-based coalition of business leaders and activists led a successful statewide referendum to suspend it.
A national budget policy think tank, the Center on Budget and Policy Priorities, has prepared an in-depth explanation of CP 45 and analyzed its likely effects. You can click here to read that report.
Florida already ranks near the bottom of the fifty states in a number of key public services. Our schools and universities are struggling to operate and face impending budget cuts. Nearly a half-million children lack health insurance. We can't afford to hamstring our state's ability to meet these challenges.
State CFO Alex Sink has also raised concerns that the revenue cap would lead to the downgrading of Florida's bond rating (the government's version of a credit score), costing the state billions in increased interest rates.
When it became clear during the TBRC debate that the revenue cap would fail, proponents offered an amendment eliminating the cap but requiring a two-thirds vote to raise taxes or fees. This measure failed too, largely because of concerns that the Legislature would be unable to eliminate special interest sales-tax exemptions if a super-majority vote were required.
When TABOR was officially declared dead in the TBRC, it was immediately revived in the legislature. The day after the TBRC vote, the House Policy and Budget Council passed HB 7125, which would place the amendment on the 2008 ballot. The bill failed to garner the necessary support, however, and did not pass the House and Senate before the end of the session.
Stay Tuned for Analysis of All TBRC Amendments
While TABOR was defeated, the TBRC did place several amendments on the ballot in November, including one to eliminate all school property taxes, which some experts say will leave at least a $5 billion hole in the education budget. They also put forth an amendment designed to make it easier to funnel state dollars to private religious schools through vouchers.
We'll be providing an expert plain-language analysis of all the amendments soon to ensure you can cast an informed vote in November. Sign up in the box on the upper right to make sure we notify you when the analysis is posted.