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AIF Stands in Support of Efforts to Challenge Amendment 5

June 25, 2008

TALLAHASSEE – Last week, the Associated Industries of Florida (AIF) board of directors voted to join a lawsuit challenging the proposed Amendment 5. AIF’s board also pledged to campaign against the amendment if it appears on the November ballot. If passed, the proposed constitutional amendment would lead to the largest tax increase in Florida history by replacing $9.4 billion in education funding previously generated through property taxes with increased
sales taxes, the elimination of sales tax exemptions and exclusions, and the potential of a services tax.

“Floridians need to understand this amendment does not offer immediate tax relief,” said Barney Bishop, president and CEO of AIF. “We will not see any reductions in property taxes until 2011 and there is no way to know what the economic condition of our state will be at that time. This amendment takes a blind leap into Florida’s future by mortgaging our children’s education and the potential economic growth of our state.”

AIF joins the Coalition to Protect Florida’s Economy, some education associations, Florida Association of Broadcasters, AARP and others in their efforts to keep the constitutional amendment off the ballot. The potential negative impact of Amendment 5 on the business community is far reaching. Businesses already suffering from the current economic downturn
will be hit again by tax increases that discourage consumer spending. Fewer tax exemptions for businesses will likely result in fewer companies setting up shop in Florida.

“Amendment 5 would bring a halt to economic development in this state as businesses considering relocation to or expansion in Florida will steer clear of a state mired down in the mess of figuring out whether or not there will be a services tax and which tax exemptions or exclusions will be kept and which have to go. Equally unappealing will be a state that does not invest in a highly-skilled and trained workforce of tomorrow through quality education today,” added Bishop. “We support the coalition’s opposition and will do whatever we can to ensure the issue is defeated, either on or off the ballot.”

To make up the loss in school funding, Amendment 5 would require the Florida Legislature to replace these dollars through other revenue sources, such as increased state sales tax, elimination of certain sales tax exemptions or exclusions on goods and services, imposition of a services tax or by additional cuts to an already stripped-down state budget. Further cuts to education will also adversely affect the business community, which values public education and the role it plays in developing employees with workforce skills.

“We literally cannot afford to have this amendment get to the ballot,” said Kathy Anderson, president of the Coalition to Protect Florida’s Economy and CEO-Executive Director of the Florida Institute of CPAs. “Although it appears to be relief from high property taxes, this amendment will only hurt our economy during financially-strained times. Amendment 5 would create more uncertainty and self-imposed problems and we are happy to have AIF join the fight to challenge this amendment.”

In addition to legal action taken by the Coalition to Protect Florida’s Economy, Sen. Mike Haridopolos (R-Melbourne) and Rep. Dean Cannon (R-Winter Park) have also spoken out against Amendment 5. At a press conference held earlier this week, Sen. Haridopolos announced the creation of another coalition, Protect Florida’s Future, opposed to the taxswapping amendment.

"This is clearly a bait and switch that will lead to even higher taxes," said Sen. Haridopolos.