Amendment Number Three is an idea that's already been tried in the state of Colorado with not-so-great results.
One of the eleven proposed constitutional amendments Florida voters will be deciding in the upcoming election is Amendment Number Three. Outgoing Florida Senate President Mike Haridopolos says it’s the solution to a problem that has plagued state government for years.
“As you know over the last two years we’ve cut six billion dollars in spending in order to balance the budget without raising taxes. And what this would allow us to do is, in the good years when we take in a little more money, we’ll put those extras into a reserve or a rainy day fund so that in the bad years we can use those reserves and not ask for additional taxation or make radical cuts in the future.”
The official title of Amendment Three on the November 6th ballot is “State Government Revenue Limitation.” There is already a limit in place as to how much state revenue can grow. That limit is tied to how much personal income grows. Amendment Three would replace that limit with one that tracks the growth of inflation and the state’s population. This is by no means a new or untried idea. The State of Colorado adopted this very concept twenty years ago. There it was called the “Taxpayer Bill of Rights” or “TABOR” for short. But things didn’t exactly work out the way TABOR supporters had hoped.
“In the economy, there’s productivity growth. which is usually one-to-three percent, so every year you’re shrinking each year away from what the economy is and eventually you can’t do basic services for government," said Colorado Democratic State Representative Mark Ferrandino.
According to an analysis by the non-partisan Bell Policy Center, the real impact of TABOR on Colorado’s state and local government service levels didn’t really hit until the recession of 2000 through 2003. Government revenues plunged and there was only a small reserve to take up the slack. That reserve was nowhere near enough and lawmakers were forced to slash budgets by hundreds of millions of dollars. By 2005, it seemed apparent something had to be done about TABOR. That’s when former Colorado Governor Bill Owens took to the airwaves asking the state’s voters to make some changes to TABOR:
(TV ad audio) “Colorado is in trouble. A glitch in TABOR is penalizing us for the recession and slowing our economic recovery. After a billion dollars in cuts, we still face a crisis. That’s why Referenda ‘C’ and ‘D’ are so important. They fix the glitch in TABOR by earmarking dollars the state already collects for education, roads and healthcare, without a tax increase.”
Referendum “C” passed and that loosened many of TABOR’s restrictions. In fact, for the first five years until 2010, Colorado’s government revenue caps pretty much went away altogether. They’re now back, but in a somewhat watered-down fashion. Still, the Bell Policy Center says the State of Colorado continues to lag the majority of states when it comes to many government services, including education. There’s been some private sector impact as well. The state’s tourism industry, for instance, depended heavily on government-funded marketing programs to attract visitors to Colorado. That industry never fully recovered from the cuts to those programs caused by TABOR.
“One of the things they always say about TABOR is it’s going to bring economic development, it’s going to help jobs. I think the flyer said, ‘Lower taxes; more jobs’. Colorado, since TABOR’s passed, has had one of the lowest job growth rates in the mountain region of any state. We have not had more jobs,” said Colorado Democratic State Representative Mark Ferrandino.
But Florida Senate President Mike Haridopolos says Colorado’s problems have little if anything to do with his state’s Amendment Three. For one thing, he says, the Florida amendment pertains only to state revenues with no limitations on local tax collections. And unlike Colorado, Florida tax revenues that exceed the cap won’t have to be refunded to taxpayers.
“What this would allow us to do is that, in the good years when we take in a little bit more money, we’ll put those extras into a reserve or a rainy day fund so that in the bad years we can use those reserves and not ask for additional taxation or make radical cuts in the future.”
At the same time, Haridopolos says, the amendment will put the brakes on unrestrained growth of government.
"This law will make it so it takes a super-majority vote by both houses of the legislature in order to increase the amount of money that the government extracts from you. So we think it’s a right balance, we’ve learned from what was good and what was bad in Colorado and we think this flexible approach is the best way to give budget certainty that currently does not exist.”
There’s also certainty among opposition groups, such as AARP, the League of Women Voters and Florida Business Watch, that Amendment Three is a bad idea. Those are the primary forces aligned against the proposal. It will take at least 60 percent of the state’s voters to pass the amendment come November sixth.