Karen Woodall, Executive Director Florida Center on Fiscal & Economic Policy

1. 2012 Ballot - AMENDMENT 3:“TABOR/SMART CAPS”The Impact on Florida’s Kids, Communities and Economy Karen Woodall, Executive Director Florida Center on Fiscal & Economic Policy

2. 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.

3. Why is Amendment 3 a problem? • 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

4. 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)

5. 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.

6. Why is Amendment 3 a problem? • It REMOVES FLEXIBILITY for our policymakers. • It places the state’s budget on AUTO-PILOT. • It REMOVES ACCOUNTABILITY from our ELECTED LEADERS.

7. 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.

8. 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.

9. AMENDMENT 3 – FAILED EXPERIMENT

10. 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

11. AMENDMENT 3 – FAILED EXPERIMENT TABOR Did NOT Improve Colorado’s Economy as Promised Source: Bureau of Labor Statistics

12. AMENDMENT 3 – FAILED EXPERIMENT Colorado’s Job Growth After the Recession Was VERY SLOW Job Growth(March 2001- January 2006) Source: Bureau of Labor Statistics

14. WHY DO WE WANT THIS HERE? • What YOU can do! • Spread the word. • Stay connected. • Info: www.fcfep.org • www.cbpp.org

15. TABOR