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Governor Proposes  “No Hidden Taxes in Florida’s Constitution”

March 9, 2004

Last Friday (March 5, 2004)  in a special notice we told you about a new proposed constitutional amendment, “No Hidden Taxes in Florida ’s Constitution.”  This amendment is being sponsored by Senator Jeff Atwater (R–North Palm Beach) and the concept was proposed by Governor Jeb Bush.  This amendment is designed to limit future constitutional amendments in two significant ways:  

1.)  If a proposed amendment has a fiscal impact of over $1 million, then the amendment proposer must identify a new tax or user fee to pay for the amendment; and  

2.)  The amendment must receive a 2/3 vote (66.67%) of all of the voters in that election (versus 2/3 of the voters who approve that amendment) based on the highest vote in that election (e.g., usually the presidential or gubernatorial race).  

In a balanced fashion, we would like to lay out the pros and cons of the arguments on this amendment and then ask that you let AIF know your thoughts on this proposed amendment.

   

Pro  

            Florida ’s Constitution is now becoming the bastion of populist ideas with tremendous fiscal impacts on our state’s budget.  Consequently, in the status quo, if you have a popular concept, a special interest group with the financial capacity can easily propose an idea that can wreak havoc with financial resources of the state of Florida, as has the recent High-Speed Railroad and Classroom Size amendments.  

            To help mitigate these financially ruinous amendments in the future, amendment proposers will be required to clearly identify a new tax or user fee in their amendment language, if the amendment’s fiscal impact exceeds 1 million.  Floridians traditional reluctance to tax themselves hopefully will raise the bar for acceptance to the point that not only must the amendment be very popular, but voters must be willing to pay for it.  

            The second component of this proposed amendment is that in order for it to be enacted by Florida voters, it would require a 2/3 vote by all of the voters in that election based on the highest vote getter in that election ( in most years this would be a Governor or Presidential race).  Currently, constitutional amendments can be approved with only a 50% +1 margin of whoever cast a vote on that amendment.  In practical terms, that means that it is possible for a minority of voters to approve an amendment.  Why?  Because of “voter ballot fatigue” or “voter ballot fall-off.”  In reality, with increasingly long ballots, voters are not always going through the ballot and voting for every race or every amendment.  Often voters will skip over a race in which they like neither candidate or they will skip over a proposed amendment that they do not understand.  So, while every voter has an opinion, and expresses it, for the presidential or gubernatorial race by the time voters get to the end of the ballot where proposed constitutional amendments are placed, some voters just don’t vote on these amendments.  This fall-off allows some constitutional amendments to secure the necessary 50% +1 of the voters for that amendment, but not the 50% +1 majority of all voters in that election.  

            There is documentation that confirms this phenomenon from Florida TaxWatch.  Their analysis indicates that under current laws 76.6% of all proposed amendments (95 out of 124), have passed with a 50% +1 vote on that amendment.  Had there been a super majority vote of 2/3 vote on that amendment (which is not as strict as a 2/3 vote of all voting), only 47.6% of the amendments (59 out of 124) would have passed, a significant swing in the overall outcome.  Concurrently, the High-Speed Rail would not have been approved by voters as it garnered only 52.7% of voters on that amendment, versus only 47.2% of all voters in the election.  Suffice it to say that the higher voter threshold can have a meaningful impact on the election outcome.  

            Some might argue that a 2/3 majority is too restrictive for constitutional amendments, but remember this is for amendments with a fiscal impact of more than $1 million.  Thankfully there is precedence for the super majority vote, because the Florida Constitution already mandates a 2/3 of the votes cast on the election pursuant to Article XI, Section 7.  So, this amendment logically extends to spending what is already required for taxing.  

 Con  

            The flip side of the amendment is that in all likelihood, voters may not elect to tax themselves, but rather business.  Since Florida ’s tax structure is primarily a tax on business, due to no state income tax, this may not be too far-fetched.  So it’s possible that a new High-Speed Rail amendment could be funded in the future by, say, a increase in taxes and/or fees on specific business sectors or on the (XXXXXXXXX )tax on 18 wheel tractor-trailers on Florida ’s highways.  Certainly it is possibly for popular ideas to be funded by taxing someone else.  Herein lies the potential danger for Florida ’s business establishment.  Will we be the objects of the others’ taxing desires?  This remains to be seen, but it does not seem to be an outlandish idea, given the public’s desire for “painless” taxing.  

            The whole constitutional amendment issue is at front and center of this legislature so this proposal will play a very important role in those discussions.  As AIF has made constitutional amendments a very high priority this session, we would like to get your thoughts on the Atwater proposal.  You can send a email to us at aif@aif.com  or feel free to give Barney Bishop or Doug Bailey a call at 850-224-1940.