Plan To Cap State & Local Gov't Moves Forward

by Jorge Romero, Paul Symons
Sections: Taxes, State, Local
From: Volume 2, Issue 3

Imagine your local government actually asking for your permission to raise taxes. Does it sound too far-fetched? For Floridians, it might not be. Taxpayers have a unique opportunity to put the brakes on the growth of state and local government once and for all.

“The Taxpayer Protection Amendment is the most effective method of insuring that we get fiscal responsibility from our government,” said Dan Quiggle, the Florida State Chairman of Americans for Prosperity, one of the groups supporting the plan. “It empowers citizens to have more control over their tax dollars and their government.”

After the measure’s recent approval by two subcommittees, it moves to the full special commission created by the Florida Constitution once every 20 years. The Budget Reform Commission has the authority to place the amendment on the ballot without legislative or judicial approval, but it must pass with 17 votes in the 25- member body. If it is approved by the commission and then by voters in November, increases in local and state taxes or spending would be tied to population growth and inflation. It would also prohibit any tax or fee hikes unless they met voter approval.

Florida’s economy in particular is in dire straights as taxes soar to all-time highs. While many candidates have presented their plans to get us out of the current recession, most economists agree that the immediate prospects for the state’s economic future look bleak. But, supporters of the measure say the amendment would help revitalize the economy.

“Our real estate market and our economy cannot continue to thrive unless we enact necessary and substantial tax reform,” Quiggle said. “The Taxpayer Protection Amendment is the only proposal that has proven to limit the excessive growth of government and ensure fiscal responsibility on both the state and local level.”

While most economists believe the current crisis is due to the sub-prime mortgage debacle and the Fed’s monetary policy, there is more to the story. The mortgage crisis has exposed the irresponsible fiscal behavior of our local, state and national governments. Government’s fiscal and economic activities can be compared to a person’s finances. Everybody has to budget their income; when people want something but don’t have the money for it, they either borrow or save. If an individual perpetually spends more than he or she makes, it will eventually lead to bankruptcy. All levels of government work in a similar fashion, the only difference being that they can always take more of your money. When governments overspend or need to repay a debt caused by past overspending, they simply give themselves more income. This translates to higher taxes for you and me. People have to follow different rules though - since most can’t get a raise whenever they want, they have to manage their income properly.

So, how can government become more fiscally responsible? The answer for many Floridians is this amendment. The plan is Florida’s version of a Tax and Expenditure Limitation like Ronald Reagan’s proposition 1 and Colorado’s Taxpayer Bill of Rights (TABOR). While proposition 1 was defeated at the polls in 1973, TABOR has been in place in Colorado since 1992 producing very favorable results. Before adopting its own version of the amendment, the state ranked 43rd nationally in economic growth per capita. Since then, they’ve ranked 7th. Colorado also ranked 33rd nationally in job growth, but since TABOR they’ve ranked 6th.

Today, taxes in Florida are at an all time high. In the last few years state and local taxes have captured at least 10% of the state’s income.

“Some citizens are being taxed out of their homes and others are being taxed out of the state entirely,” noted Quiggle. “Had this proposal already been in place, the average Alachua County resident would’ve saved over $500 in taxes last year.“

Supporters in Florida want to hold their government officials accountable for the current economic situation. The TPA would do just that, they say. Requiring voter approval for tax increases would severely undermine politicians’ ability to waste money. Investing surplus government revenue in emergency funds would also help deal with downturns in the “business cycle.” If the funds already have enough, the money would be returned to taxpayers.

“Many special interests are pressuring these commissioners to weaken our proposal,” according to Americans For Prosperity. “Currently, it looks like it is going to be very close.”

If The TPA is approved by Florida’s Budget Reform Commission, Tallahassee better hold on in November. Angry Floridians burdened by skyrocketing property taxes say they have had enough. One Florida economist compared the impending showdown to rich parents not handing any more money to their spoiled, overspending, unappreciative kids. They will moan, cry, kick, and scream - but eventually they will learn to value and conserve other people’s money