WHAT NONPROFIT ORGANIZATIONS NEED TO KNOW ABOUT FLORIDA AMENDMENT 3

PRESENTED BY THE FLORIDA NONPROFIT ALLIANCE

Special Guest Presenters

 Deirdre Macnab, President, League of Women Voters of Florida  Mark Turner, Public Policy Director, Colorado Nonprofit Association

Constitutional Amendments on 2012 Ballot

 11 constitutional amendments on the 2012 ballot  Require a 60% margin to become law  All were generated by the Florida Legislature within the last 2 years  No citizen initiatives on the ballot this year

Florida’s Tax Revenue in Comparison

 Florida is the 4 th largest state in the Union. Here is where Florida ranks in terms of overall tax burden:  46 other states have higher taxes as a percentage of personal income (1)  42 other states have higher tax revenue per person (1)  38 other states have a higher corporate tax rate (2)

Public Spending in Florida

 Here is where Florida ranks in terms of Elementary Secondary per pupil spending:  On average, the U.S. as whole spends $10,499 per pupil. Florida, on the other hand, spends $8,760, which puts us behind 37 other states. (3)  Florida’s government workforce has shrunk over the last decade, and is now the smallest and the cheapest in the country on a per-capita basis. (4)

Amendment 3: State Government Revenue Limitation

 An attempt to impose a new formula for calculating the state’s revenue cap

The Colorado Example: TABOR

 Colorado adopted a similar provision in 1992. However, after state funding fell for schools, public safety, healthcare and transportation, Coloradoans voted to suspend TABOR in 2005. At this time, over 30 states have considered similar measures, but no other state has passed it.

A Vote YES on Amendment 3 would:

 Replace the existing state revenue limitation based on personal income growth with a new, more restrictive limitation based on changes in population and inflation  Restrict government revenue (taxes, licenses, fees, fines, or charges for services) in good and poor economic times  Limit the Legislature’s ability to increase revenue beyond what the formula allows

A Vote NO on Amendment 3 would:

 Maintain the existing state revenue limitation based on personal income growth  Protect the state’s ability to provide the current level of government services  Preserve the Legislature’s current flexibility in responding to budgetary concerns and changing economic conditions

Be Ready to Vote in 2012!

 3 Ways to Vote: By Mail, Early or on Election Day  Check your voter status at: www.BeReadyToVote.org

 You can update your:   Address Name    Political party Absentee ballot request Signature   Help educate your friends and family Book the League to speak to your community, civic, religious or political organization

Questions for Deirdre?

Colorado’s Taxpayer’s Bill of Rights (TABOR)

Mark Turner Director of Public Policy Colorado Nonprofit Association 455 Sherman St. Suite 207, Denver CO 80203 - 303-832-5710 www.ColoradoNonprofits.org

“TABOR”

• A constitutional tax and expenditure limit approved by CO voters in 1992.

• Written by Doug Bruce, Colorado Springs lawyer and real estate developer • Passed in 1992 with 53% of the vote after three previous attempts.

Colorado “TABOR” – 1992

• Requires voter approval of any state or local tax, debt, mill levy or other “net revenue” increase • Revenue limit:

previous year’s revenue

times growth in the inflation rate + population rate • Revenue above the limit is “rebated” to taxpayers

Colorado “TABOR” – 1992

• Requires voter approval to weaken existing state spending limits • “Ratchet effect”- revenue limit based on lesser of actual previous year revenues vs. revenues allowed by the formula.

Colorado “TABOR” – 1992

• ‘90-’01 General fund revenue boom- 7.8% growth per year on average, from $2.6 to $9.4 billion • Between ‘96 and ’01, Colorado rebated $3.2 billion in “TABOR surplus” to taxpayers • Legislative Council ‘93 report – ”TABOR's contribution to the state's economic prosperity, if any, cannot be statistically quantified.”

Colorado “TABOR” – 1992

• 2001-2003 recession - $1.1 billion in cuts, no TABOR surplus • Ratchet: limits based on lower revenue base • 2004-2005: Economy recovering but Colorado had both a shortfall and a TABOR surplus

NONPROFIT COLORADO The Effects of Colorado's Economic Downturn

76% of nonprofits funded by the state experienced reduced budgets in 2004 (85% project reduced budgets in 2005)

Revenue reduced, 76%

(source: Colorado Assn. of Nonprofit Organizatons survey)

NONPROFIT COLORADO The Effects of Colorado's Economic Downturn

58% of nonprofits funded by the state experienced increased demand in 2004 (56% project increased demand in 2005)

Demand for services increased, 58%

(source: Colorado Assn. of Nonprofit Organizatons survey)

Nonprofit Colorado: Economic Impact

• 67% increased requests to foundations in 2004 (Colorado Nonprofit Assn. Survey) • 54% increased individual donor requests (Colorado Nonprofit Assn. Survey survey) • Colorado ranked 43 rd in the nation in charitable giving (Catalogue for Philanthropy)

Governor Bill Owens (R) 2005 “State of the State”

“General Fund dollars available under TABOR – after paying required Amendment 23 and Medicaid expenses – will not keep pace with the demands on the budget. As a result,

we cannot take the steps we must take to build a brighter future for all of Colorado, and particularly our children

.”

Colorado’s 2005 Referendum C

• Compromise between Governor and D legislature • Suspended TABOR revenue limits from 2005-2010 allowing the state to keep all revenues collected • No effect on existing tax rates • Eliminated the ratchet, reset the revenue base • 85% of Colorado cities and counties have voted to “de-bruce” – i.e. suspend local revenue limits on property tax revenues • TABOR surplus may return around 2014

Nonprofit Voice Project

Demand for services has grown.

Revenues haven’t kept pace.

Changes Since FY 2007-2008

Medicaid Enrollment Children's Health Plan Higher Education 19% 21% K-12 Education State Park Visits 7% 7% General Fund -5%

Governor Hickenlooper FY 2012-2013 Proposed Budget to JBC

24 72%

$180,00 $160,00 $140,00 $120,00 $100,00 $80,00 $60,00 $40,00 $20,00 $0,00 Colorado’s Tax Burden Is Low (compared to other states)

Colorado State Taxes per $1,000 of Personal Income Compared to Nation 49 of 50

$163,89 $58,50 $40,89 $37,50 High Average Colorado Low 25

Colorado Invests Less in Public Services (compared to other states)

Spending per $1,000 of Personal Income Colorado v U.S. Average

$160,00 $140,00 $140,52 $120,00 $100,00 $80,00 $60,00 $40,00 $20,00 $0,00 $106.49

$50,67 $41.16

$7.16

$3,52 $27,74 $13.11

$8.87

$5,44 Total (47th) K-12 Education (48th) Higher Education (48th) Medicaid (49th) Highways (48th)

Colorado Fiscal Policy Institute, 2009

US Average Colorado 26

Changes in Funding of CO Public Services

% Change in CO 2007- 08 to 2011-12

-20,0% -10,0% 0,0% 10,0% -40,0% -30,0% 20,0% 30,0% Agriculture - 28.8% Nat'l Resources Higher Ed - 21.2% - 16.6% Human Services Local Affairs K-12 Per Pupil Corrections - 4.8% - 3.7% - 2.6% + 2.9% Health Care + 20.1% 27

JBC Staff Documents; Ed News Colorado

TABOR and Colorado’s Future

• Colorado’s still a growing state but revenues aren’t keeping pace with demand • Voters have the final say on increasing revenues and amending the constitution • TABOR’s CPI (inflation) + population formula does not capture growth in costs of public services. – CPI measures what consumers buy not what governments buy

Thank you…

Mark Turner Director of Public Policy Colorado Nonprofit Association 455 Sherman St. Suite 207, Denver CO 80203 - 303-832-5710 www.ColoradoNonprofits.org

Questions for Mark?

Additional Resources

 Center for Budget and Policy Priorities Report on Florida Amendment 3: http://www.cbpp.org/cms/index.cfm?fa=view&id=3831  PICO United Florida “ NO on 3 Campaign”: http://www.picoflorida.org/events/no-on-3  Center for Lobbying in the Public Interest: http://www.clpi.org/  Nonprofit Vote: http://www.nonprofitvote.org/