karen woodall, executive director florida center on fiscal & economic policy
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2012 Ballot 2012 Ballot - AMENDMENT 3AMENDMENT 3:
“TABOR/SMART CAPS”“TABOR/SMART CAPS”The Impact on Florida’s Kids, The Impact on Florida’s Kids, Communities and EconomyCommunities and Economy
Karen Woodall, Executive DirectorFlorida 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.
• 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
Why is Amendment 3 a problem?
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.
• It REMOVES FLEXIBILITY for our policymakers.
• It places the state’s budget on AUTO-PILOT.
• It REMOVES ACCOUNTABILITY from our ELECTED LEADERS.
Why is Amendment 3 a problem?
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
“ 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
Average Annual Employment ChangeBefore 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 EXPERIMENTTABOR Did NOT Improve Colorado’s Economy as Promised
Arizona 12.8%
Colorado 0.2%
Idaho 10.3%
Nebraska 7.5%
Nevada 19.1%
New Mexico 8.7%
Utah 8.0%
Wyoming 9.8%
Job Growth (March 2001- January 2006)
Colorado’s Job Growth After the Recession Was VERY SLOW
Source: Bureau of Labor Statistics
AMENDMENT 3 – FAILED EXPERIMENT
WHY DO WE WANT THIS HERE?
• What YOU can do!
• Spread the word.
• Stay connected.
• Info: www.fcfep.org www.cbpp.org
TABORTABOR
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