On Wednesday, the Senate Budget Committee in Tallahassee passed a proposed constitutional amendment that would ask voters to put a new revenue cap in the state Constitution, a measure sponsored by Fort Lauderdale GOP state Senator Ellyn Bogdanoff.
The so called TABOR (Taxpayer Bill of Rights) legislation has only been approved in one other state – Colorado – and they voted in 2005 to suspend the law. It would limit state revenues through a formula using the combined rate of inflation and population growth.
The proposal is opposed by a variety of groups, like the AARP and the League of Women Voters. And the D.C. based Center on Budget and Policy Priorities has published an analysis of the measure.
That report, written by Nicholas Johnson and Erica Williams, says that TABOR's passage would lead to:
- Immediately and over the long term raise Florida’s cost of borrowing to invest in infrastructure, costing the state potentially tens of millions of dollars annually in increased interest payments; and
- Cause a gradual deterioration of public services like health care and education, and hinder state investments, as revenues decline over time relative to the state economy.
Even with the clamor to cut spending, the group say since Colorado adopted TABOR in 1992, over 20 state legislatures have rejected similar proposals, and it has been voted down in every state in which it reached the ballot.
On a conference call, Johnson excoriated part of the legislation that would require a super majority to approve any tax increase, an obstacle that California had until recently w
The Miami Herald weighed in on the proposal in an editorial in its Wednesday editions. They are not supportive, writing:
We’re all for importing successful ideas from elsewhere. But deep cuts to Colorado’s state and local budgets had such negative consequences, and so paralyzed that state’s economy, that voters suspended the TABOR revenue caps for five years. Thankfully, Florida Senate sponsors modified prior, failed attempts to apply the caps to local taxing bodies as well as the state. Still, locals might correctly fear the measure could provide a foot in the door for state lawmakers who want to come back and tie knots in local purse strings as well.
In addition to long-term spending reductions for healthcare, education and transportation — services sure to face higher costs even as budgets are trimmed — opponents are especially concerned about a provision that limits payments to bondholders. We agree.
Bonds are exempt from the current constitutional cap, but under the proposed amendment, revenues used to pay debt service on bonds issued by the state would be limited. Just how would potentially higher interest payments and a drop in infrastructure investment help Florida’s economy?
With such increasingly deep revenue cuts, how could the state meet emerging needs, or respond to new opportunities, when existing responsibilities would be so squeezed?
The measure would have to be approved by the Legislature before getting on the ballot, and then of course would need to be approved by 60% of the Florida electorate.
This article appears in Feb 17-23, 2011.