How Strict New Tax Rules Could Affect Florida

Oct 18, 2012

Amendment 3 on Florida’s ballot this year, if passed, will change how the state figures out how much money it can collect in taxes.

Opponents all over the state, however, say this one change could lead to massive cuts in state services such as health care and education.

How Amendment Three Works

  1. The state will no longer base how much money it can collect in taxes on statewide personal income. Instead, government officials will only be able to consider inflation and changes in population when they figure out tax rates
  2. If the state collects more money than it could spend, lawmakers have to put it in what is called a “rainy day fund."
  3. Once that fund reaches 10 percent of the total annual budget, lawmakers will be forced to lower property taxes or give the money back.

Out of Control Spending

Supporters of Amendment 3 say these new rules will keep government spending in check.

“The current Legislature is fairly frugal, but we couldn’t count on that for all future legislators-- and, therefore, this would put into the Constitution a restraint on the growth of spending-- growth beyond inflation and the population growth,” Bob Sanchez, policy director at conservative think tank James Madison Institute in Tallahassee, says.

The Institute has endorsed the amendment because they say the state has so far been unable to limit the growth of state spending.

But his group also warns that limiting state spending may mean more expenses will fall upon local governments.

That’s why the Florida Association of Counties is telling Floridians to vote no on amendment 3.

The Campaign Against Amendment 3

The biggest campaign against Amendment 3, though, is being lead by PICO: a nationwide network of faith-based community groups.

Richard Dunn is a pastor living and working in the struggling inner-city in Miami.

He is one of many religious leaders fighting Amendment 3 with PICO.

“It will become a shell game where, okay we are going to cut-- we are going to reduce taxes-- but then also you end up having to reduce services,” Dunn says. “And I got a feeling that the people that will be left out, once again, will be those particular groups, the senior and the children and many people in the urban core and in the poor areas.”

He says he’s worried that if the state cuts more spending, people in his community will have to turn to his church for services, but Dunn says his church doesn’t have the resources to pick up the slack.

Opponents also argue that during these past few years of economic hardship, the state has already taken a lot of money out of services.

But Sanchez says Amendment 3 would have actually been a big help to the state during hard times.

“Well had it been in effect, there might have been a larger reserve to draw upon when the economy did go south-- and, therefore, the cuts wouldn’t had to have been as severe.”

Colorado's TABOR

The Center on Budget and Policy Priorities, a left-leaning policy group in Washington, released a report claiming the amendment would cost Florida 11 billion dollars in revenue over 10 years.

Erica Williams was one authors of that report.

“It sounds, on it’s face, very logical and very rational, but this formula actually cannot keep pace with the normal growth and the cost of services, year to year,” Williams says. “And we know this because it failed to do so in the one state that put it into place. It’s called TABOR there. Colorado’s TABOR caused massive, massive cuts to the services that people and businesses rely on most.”

She says Colorado had to make big cuts in health services and education, among other things.

Williams says that’s because there are fundamental flaws with tying state tax rates to population growth and inflation.

She says looking at overall state population growth means lawmakers won’t look specifically at groups that use public services the most-- such as children and seniors.

She also says lawmakers should focus on the cost of services instead of inflation.

Bob Sanchez at the James Madison Institute says there are safeguards in place in amendment 3 that prevent the state from making huge cuts.

This story is part of a collaboration with the Florida Center for Investigative Reporting. For more information on this year's ballot measures-- including endorsements, explanations and funding-- go to