Florida lawmakers hand voters the power to limit state tax increases
A constitutional amendment to make it more difficult for future Florida lawmakers to raise new revenue is on its way to the statewide ballot.
The Senate on Monday gave final approval to joint resolution HJR 7001 by a vote of 25-13. The amendment would require two-thirds votes in the Legislature to increase state taxes and fees.
The House-proposed measure passed that chamber by a vote of 80-29 on Jan. 24.
Both chambers are led by a majority of Republicans.
To take effect, the amendment must be approved by 60% of Florida voters Nov. 6. The same requirement would apply to decreasing or eliminating any state tax, fee exemption or credit.
Currently, state level tax and fee changes require a simple majority vote.
A less restrictive three-fifths vote had been proposed in a Senate resolution that would have only applied to state taxes, not fees, but it ultimately was not considered.
Gov. Rick Scott, whose signature is not required for such initiatives, thanked lawmakers for placing the more restrictive amendment on the ballot.
“We have cut taxes more than 80 times since I’ve been in office because we know that Florida families and businesses succeed when we put their tax dollars back in their pockets,” said Scott, a Republican who cannot run for reelection due to term limits. He's widely reported to be weighing a U.S. Senate bid.
“I look forward to this important amendment being on the ballot to protect families from unfair tax increases," he added.
Currently, state-level tax and fee changes - such as the state sales tax rate and fees charged for driver license renewals - require a simple majority vote.
Lawmakers used that power to raise driver’s license fees and other levies to pay for state budget priorities after revenue collections declined following the 2008 recession.
Those fees were rolled back under Scott’s administration over the past seven years, but that’s largely because Florida’s general fund revenue collections have risen every year since the end of the recession.
General fund revenues grew to $29.46 billion in fiscal 2017, up from $21.6 billion in 2010, according to the state’s Revenue Estimating Conference. In the current year, general fund revenues are projected to total $30.8 billion.
“Florida families plan their budgets carefully to make every dollar count and the Legislature exercises the same attentiveness when appropriating the tax dollars Floridians send us,” Senate President Joe Negron, R-Stuart, said after Monday’s vote. “Just like Florida families, state government should live within its means.”
The proposed amendment is “ill-advised” and doesn’t bode well for Florida’s families or its economy, said the Florida Policy Institute, an independent, nonprofit organization that analyzes state policy issues.
“If this threshold is approved in November, lawmakers’ hands would be tied during an economic crisis, when revenue is desperately needed,” FPI Executive Director Joseph Pennisi said in a statement. “Imagine what would happen after the next hurricane or during the next economic recession, when the demand for services increases and the revenue to address them lags.”
Although the proposal would not subject local taxes and fees to the stricter voting requirement, Pennisi said local governments could be harmed if state lawmakers are unable to raise revenue.
About 60% of all revenues in Florida that fund school districts for education from pre-kindergarten through grade 12 come from state coffers, Pennisi said.
A legislative analysis of the resolution also said that the proposed amendment would affect the Legislature’s ability to respond to future conditions.
The amendment would limit the ability of lawmakers to change user fees for services to impose increased costs on those persons receiving services or benefits, the analysis says. Those include fees used to recover the costs of goods and services provided by the government, such as highway tolls, parks admissions, and university tuition.
Other areas where the amendment could hamper the Legislature’s ability to act include dealing with exemptions or tax credits that have outlived their intended purposes; correcting a court or administrative decision that results from an unintended interpretation of a tax statute; and the ability to change premiums and co-payments for the State Employee Health Insurance Program or the Medicaid program.
The negative revenue impact of the amendment could not be determined, the state’s Revenue Estimating Conference said in a required fiscal analysis of the proposal.
In addition to constraints outlined in the legislative analysis, the REC said, “To the extent that state taxes or fees shared with local governments are affected, there may also be negative indeterminate impacts on local government revenues.”
If approved, the supermajority amendment would go into effect in January 2019.
Since he took office in January 2011, Scott has approved record-high state budgets as revenue collections improved each year.
Lawmakers are currently considering another record spending plan of about $87 billion for fiscal 2019, and must adopt the budget Tuesday in order for final action to be taken on Friday, the last day of session.
Budget negotiations have slowed to debate bills funding new gun-safety programs at the state’s public schools in the wake of the Feb. 14 mass shooting deaths of 14 students and three adults at Marjory Stoneman Douglas High School in Parkland.
The Senate passed a $400 million bill late Monday that would provide funding for mental health and additional school safety programs. The measure now goes to the house.