August 8, 2003
General Bob Milligan
Senator John McKay
Senator Jack Latvala
As three Floridians who have served in our state government over the last decade we have come to believe that Florida is at a fiscal crossroads.
Our state’s primary revenue source, the sales tax, was set-up in 1949 to serve a state which was largely agriculturally based. At the time it was established it was difficult to predict the future – the metropolitan Florida we have become, the tourist- driven economy we would have or the effects of the Internet on commerce.
Over the last several years we have seen the dramatic impact that an economic downturn or a reduction in tourism can have on our ability as a state to provide basic services. To balance our state budget we have had to rely on gimmicks such as the use of nonrecurring dollars for recurring needs and we have raided trust funds set up for specific purposes. Just this year, for example, the Legislature took 200 million in gas tax dollars set aside for road construction and put it into general revenue.
The time has come for Florida to review our sales tax system and determine if it is fair to all Floridians and if it meets the needs of our state’s future.
The current system has a hodge-podge of exemptions, many of which were narrowly focused by special interests and were adopted without a clear public purpose – over 100 new exemptions in the 1990’s alone.
Is it fair, for instance, to charge sales tax on movie and sports event admissions but not on skyboxes or adult entertainment? Or to charge sales tax on long distance phone calls from home but not on prepaid phone cards bought in a store?
We have tried to get Florida’s Legislature to act on this matter. While the Florida Senate has acted, the other branches have not.
The last resort when the Legislature will not act is for the people to act. Seventeen times since 1976 the people of Florida have done just that with initiatives that have changed Florida’s Constitution. In most cases legislative action has resulted to bring about the changes mandated by the people.
Our proposal is simple – to require the Legislature to look at every sales tax exemption and exclusion every ten years. Under this amendment the Legislature shall continue only those exemptions or exclusions that serve a public purpose.
To prevent the legislative trains and insure individual accountability by legislators to their constituents each tax exemption will have to be reenacted in a separate bill as a single subject.
And finally, this measure will require a three-fifths vote of both houses to reenact or enact an exemption. This extraordinary vote will insure a broad consensus and that each item exempted will have a stated public purpose.
Since sales tax is the revenue life blood of essential state services, we believe that exemptions should be treated in no less significant a manner than the way our Constitution treats trust funds and public records exemptions.
We know this will not be an easy endeavor. Those who currently have the exemptions will not want to see them tested and will raise millions of special interest dollars to campaign against us.
However, we believe the people of Florida will see through that rhetoric and understand that those who fight this type of comprehensive, systematic look at exemptions by the legislators we all elect are those whose exemptions will not stand the light of day.