Transcript 2012 Ballot - AMENDMENT 3: “TABOR/SMART CAPS” The Impact

2012 Ballot - AMENDMENT 3:
“TABOR/SMART CAPS”
The Impact on Florida’s Kids,
Communities and Economy
Karen Woodall, Executive Director
Florida 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.
Why is Amendment 3 a problem?
• 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
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)
Why is Amendment 3 a problem?
• 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.
Why is Amendment 3 a problem?
• 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.
AMENDMENT 3 – FAILED EXPERIMENT
AMENDMENT 3 – FAILED EXPERIMENT
“ 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
AMENDMENT 3 – FAILED EXPERIMENT
TABOR Did NOT Improve Colorado’s Economy as Promised
Average Annual Employment Change
Before 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 EXPERIMENT
Colorado’s Job Growth After the Recession Was VERY SLOW
Job Growth
(March 2001- January 2006)
Arizona
Colorado
Idaho
Nebraska
Nevada
12.8%
0.2%
10.3%
7.5%
19.1%
New Mexico
8.7%
Utah
8.0%
Wyoming
9.8%
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