Karen Woodall, Executive Director Florida Center on Fiscal & Economic Policy

2012 Ballot 2012 Ballot - AMENDMENT 3AMENDMENT 3:

“TABOR/SMART CAPS”“TABOR/SMART CAPS”The Impact on Florida’s Kids, The Impact on Florida’s Kids, Communities and EconomyCommunities and Economy

Karen Woodall, Executive DirectorFlorida Center on Fiscal & Economic Policy

What is Amendment 3?A CONSTITUTIONAL AMENDMENT – Budget/Taxes• Replaces the existing, reasonable revenue limits with a

new limitation based on inflation and population change. • What happens to the left-over money?

– Any funds that exceed the revenue limits would be placed in the state's "rainy day fund."

– Once the fund reaches 10% of the prior year's total budget the Florida State Legislature would be required to vote to either provide tax relief or reduce property taxes.

• The proposed measure requires 60 percent voter approval for adoption.

• It seems simple and reasonable, but it’s based on a COMPLICATED and FLAWED formula that just does not work

• New Formula– State revenues can’t grow

faster than the rates of Population + Inflation

Why is Amendment 3 a problem?

The FLAWED Formula• Population + Inflation

- POPULATION• AVG population that doesn’t

capture growth in populations served by government (such as, kids with disabilities, seniors, prison population)

- INFLATION• Inflation, measured by the CPI-U doesn’t capture the growth of

public sector expenses (such as, education, health care, transportation)


• The purpose is to SHRINK government.

• It’s a GIMMICK. It does nothing to encourage efficient spending of taxpayer dollars.

• It THREATENS OUR ECONOMIC RECOVERY.

• It THREATENS OUR BOND RATING. It will make school construction, road repairs, and new improvements more expensive and less attainable.

• It REMOVES FLEXIBILITY for our policymakers.

• It places the state’s budget on AUTO-PILOT.

• It REMOVES ACCOUNTABILITY from our ELECTED LEADERS.


Wait, There are MORE Problems?!

• Constitutional – the Limits are PERMANENT

• It’s NOT FISCALLY RESPONSIBLE –

• Unintended consequences

• Doesn’t allow us to plan for our future

• It will result in COST-SHIFTING TO LOCAL GOVERNMENT and COMMUNITIES.

AMENDMENT 3 – FAILED EXPERIMENT

• Colorado is the ONLY state to have a measure similar – called “TABOR”.

• Adopted in 1992.

• Strangled the budget, slowly squeezing tighter every year.

• Suspended in November 2005 – a bi-partisan coalition of business, children’s advocates, education, health, senior groups led the effort.

“ A good ‘business climate’ depends as much or more on the quality of public services as it does on the state’s tax level. ”

- Deloitte & Touche/Fantus Consulting

“ For businesses to be successful, you need roads and you need education, both of which have gotten worse under TABOR and will continue to get worse. ”

-Tom Clark, Denver Metro Chamber of Commerce Executive Vice President


Average Annual Employment ChangeBefore and After TABOR

1980-1992 1992-2004

Colorado 2.1% 2.6%

Mountain States(median)

2.1% 2.8%

Source: Bureau of Labor Statistics

AMENDMENT 3 – FAILED EXPERIMENTTABOR Did NOT Improve Colorado’s Economy as Promised

Arizona 12.8%

Colorado 0.2%

Idaho 10.3%

Nebraska 7.5%

Nevada 19.1%

New Mexico 8.7%

Utah 8.0%

Wyoming 9.8%

Job Growth (March 2001- January 2006)

Colorado’s Job Growth After the Recession Was VERY SLOW

Source: Bureau of Labor Statistics


WHY DO WE WANT THIS HERE?

• What YOU can do!

• Spread the word.

• Stay connected.

• Info: www.fcfep.org www.cbpp.org

http://www.fcfep.org/

TABORTABOR

Karen Woodall, Executive Director Florida Center on Fiscal & Economic Policy

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