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Senate sets stage for revenue cap vote

Ellyn Bogdanoff
Ellyn Bogdanoff

By Lynn Hatter

http://stream.publicbroadcasting.net/production/mp3/wfsu/local-wfsu-956989.mp3

Tallahassee, FL – A proposed constitutional amendment to limit state revenue has hit the Senate floor. As Lynn Hatter reports, the proposal, commonly known as the Taxpayer's Bill of Rights, is favored by fiscal conservatives, but its opponents say it will do more harm than good to the state's economy.

The proposal is sponsored by Fort Lauderdale Republican Senator Ellyn Bogdanoff. She says the idea behind it is simple: limit government growth, and stop government from spending money it doesn't have.

"But I suspect, based on what's happening in the nation, that the voters believe government always spends too much money. It's something I noted in 2005, cause I was in the legislature, when we had the extra billion dollars, there was a desire to spend it. Because the one thing you know about government is that we will never have enough money to fill all of the desires and needs of the state of Florida."

Under the amendment proposal, state revenue collections would be capped. That cap would be determined by a formula made up of population growth and inflation state revenue can't grow faster than those two indicators. If the state exceeds the cap the extra money, Bogdanoff says the extra money will go to a couple of different places.

"The money that exceeds the cap will go to the stabilization fund. Once we achieve that appropriate level, the rest goes to the Required Local Effort, which is every property tax payer in the state of Florida. Beyond that, once that is zeroed out, and we have to chose another method to return, that's going to be up to future legislators."

Bogdanoff says lawmakers can choose to lower fees for things like driver's licenses or the state's sales tax. The state already has a revenue cap in place that was approved in 1994. It's never been reached. And opponents to TABOR like Karen Woodall with the Florida Center for Fiscal and Economic Policy, say what's the point?

"The legislature is elected by the people to deal with the needs of the state of Florida. They've had no problem whatsoever with reducing taxes. Over the last decade they've eliminated recurring revenue sources like the intangibles taxes at least 12-billion dollars out of the revenue stream, and they've done that with the existing cap."

Woodall says if TABOR passes it would tie the hands of future lawmakers to make budget decisions, and she likens the bill to what happened in Colorado. In 2005 that state placed a five-year moratorium on TABOR. Under the law Colorado's education system, health care system and transportation system all took hits while the state was giving money back. Senator Paula Dockery, a Lakeland Republican, questioned how the state could justify lowering tax collections, dealing with a loss of stimulus money, filling a budget deficit AND giving money back to taxpayers.

"So when those monies go away, since you're talking about a revenue cap, when those monies go away, how do we fund our priorities with money we're no longer going to see?"

Bogdanoff: "Well, I think we're going to probably see what's going to happen this year."

Meanwhile, other lawmakers sought to amend Bogdanoff's proposal. Senator Gwen Margolis, a Democrat, targeted a provision that limits the state's bonding ability. Republican Senator Thad Altman supported the amendment, saying bonding is important to the state's economy, especially transportation. He says it's important to differentiate between program spending and infrastructure spending.

"Infrastructure creates jobs. Infrastructure creates economic vitality and opportunity. Infrastructure doesn't grow government, but enables the private sector to flourish and grow. Infrastructure provides an improvement in the quality of life for our citizens. So certainly the cap is well thought out, well done, but the one weakness is the inclusion of infrastructure expenditures and treating them the same as the growth of government programs."

That amendment failed and the proposal moved to third reading. That puts it in position to be approved by the Senate the next time it comes up. From there, it goes to the House, and if approved, voters will see it on the ballot in 2012.