By Lynn Hatter
http://stream.publicbroadcasting.net/production/mp3/wfsu/local-wfsu-966871.mp3
Tallahassee, FL – A proposed constitutional amendment to limit state revenue has hit the House floor. As Lynn Hatter reports, the priority of Senate President Mike Haridopolos cleared the upper chamber earlier in the legislative session and was heard on the House floor Tuesday.
The proposal is Senate Joint Resolution 958, also called the State Government Revenue Limitation. It's based on a proposal called the Taxpayer Bill of Rights, or TABOR. The measure is favored fiscal conservatives who say it's needed to cut down on government spending. But opponents say it will do more harm than good to the state's economy. The House sponsor is Representative Steve Precourt.
"This proposed constitutional amendment modifies the existing constitutional revenue cap and does nothing to cap local government revenues. It changes the formula, revises the revenue definition, outlines the disposition of excess funds, and provides some flexibility for emergencies."
The Revenue Limitation would cap state spending using a formula based on population growth and inflation. Basically, state revenue can't grow faster than those two indicators. And if the state does bring in more money than its supposed to, the extra dollars would first go to the budget stabilization fund, then to taxpayers in the form of property tax breaks.
But the state already has a revenue cap in place, and it has never been reached. Critics of the revenue cap language like Representative Jim Waldman say that means there's no need for the proposal.
"Why can't we just do that legislatively instead of doing it in the constitution?"
Precourt says the solution is simple: the state shouldn't spend money it doesn't have.
"It's a cap that doesn't have. So we feel there's a need for a cap that is effective so we don't have the same problem with making commitments we can't live up to like in the boom years of 04,05 and 06."
Waldman: "Well you say it's a cap that doesn't cap, but have we ever exceeded it?"
Precourt: "Not the current cap."
Waldman: "Then it seems like the cap did cap."
Similar proposals to bring down state spending have been rejected in other states. And the only other state with a similar law on the books is Colorado. In 2005 that state placed a five year moratorium on its revenue cap to recover from deep cuts it had to make to education, healthcare and transportation all while the state gave money back to taxpayers. And, according to the Karen Woodall, a lobbyist with the Florida Center for Fiscal and Economic Policy, the state doesn't have a spending problem.
"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."
The revenue cap came up in 2008 as an idea by the Taxation and Budget Reform commission and originally included city and county governments, but the opposition was so great, the committee dropped the proposal. The new State Government Revenue Limitation proposal exempts local governments. And, even though it cleared the Senate earlier in the session, the passage wasn't unanimous. Republicans like Lakeland Senator Paula Dockery opposed the measure. Dockery wanted to know how the state could justify lowering tax collections, deal with the loss of federal stimulus money, cut the budget AND give money back.
"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?"
If the House approves the measure, it will go before voters on the 2012 ballot. It will need 60-percent of those voters to approve it in order to be placed in the constitution.