Florida Senate wants cap on government spending
By Jerome Stockfisch
The Tampa Tribune
TALLAHASSEE – Florida's state budget could be tied strictly to population and inflation growth under a "Taxpayer Bill of Rights" that has become a cause célèbre of the new wave of conservatives, libertarians and Tea Partiers nationwide.
The state Senate on Tuesday sent a joint resolution to the House that would ask voters in 2012 whether they approve of the spending cap. Should it carry with 60 percent approval, Florida would become the second state in the nation with such budgetary restraints – although the first implementation, in Colorado in 1992, backfired severely.
"This is something we're going to put before the people," said Ellyn Bogdonoff, the Republican bill sponsor from Fort Lauderdale. "I suspect the people of this state would be interested in the government having more fiscal restraint. If government takes less, the people have more. I don't know about you, but I'm OK with that."
The proposal would actually limit how much tax revenue the state can collect, which in turn affects how much it can spend. Florida currently has a revenue limitation, enacted in 1994, but it is based on personal income growth and has had little effect on the budgeting process because incomes have grown faster than the state's economy.
Under the current scenario, "the more money an individual makes, the more the state should spend and take," said Bogdonoff. "That's why the '94 cap doesn't work. It's based on the wrong philosophy."
Opposition to the measure centers on the failed experience in Colorado, which enacted the original Taxpayer Bill of Rights, or "TABOR," in 1992. When that state's economy went south in the early 2000s, budget writers were hamstrung by falling revenue and had to dramatically reduce state spending.
According to a report from the Center on Budget and Policy Priorities, a Washington think tank dedicated to issues affecting low- and moderate income families, TABOR "contributed to deterioration in the availability and quality of nearly all major public services in Colorado."
Fed up with cuts to K-12 education, higher education, and public health programs – and amid evidence that the strategy may have worsened the recession – Colorado voters backtracked in 2005, putting the TABOR caps on hold for five years.
Since 1992, more than 20 state legislatures have rejected TABOR, and it has been voted down in every state in which it reached the ballot.
"This is not Colorado," Bogdonoff said Tuesday. "We have learned from the mistakes of other states. When the Senate president and I began talking about this bill, Colorado was first and foremost in our minds, because we did not want to repeat what they had done."
In Colorado, the revenue free-fall meant a permanent ratcheting down of spending. Consider, for example, Florida's proposed $66 billion state budget. Under the circumstances Colorado faced, should actual revenue fall to where the state would have to adjust annual spending to $64 billion, the budget the following year would be capped using that number in the formula. Another bad year might send spending down to $62 billion. Then, Florida's revenue base would be fixed at that level.
That cap couldn't change, even if circumstances improved and Florida returned to a growing state, needing added services and infrastructure.
Wade Buchanan, president of the progressive Bell Policy Center in Denver and an expert on the Colorado TABOR experiment, likened the situation to a reservoir emptying out during a drought. "When the drought ends, you can't fill the reservoir back to the old level, but only to where you were during the drought," he said.
Florida Senate supporters said that has been addressed by setting spending caps based on the prior year's revenue limitation as calculated rather actual revenue. That would yield a higher number for the base. They also added provisions that would allow the Legislature to "bust the cap" in emergencies with supermajorities in each house, or to ask voters to reset the cap by sending the matter to voters.
Buchanan is not impressed.
"What you have ultimately is a formula for downsizing government permanently, year in and year out, regardless of where you're starting. That was our experience here and that's why voters opted to take a time out from it."
Perhaps aware of the bad publicity stemming from Colorado, supporters of the bill were careful to avoid the term "TABOR" on the Senate floor. The bill has been dubbed the "Smart Cap" in Florida, and is a priority of Senate president Mike Haridopolos, a Republican who is running for the U.S. Senate in 2012 and has courted the Tea Party and other conservatives.
The Tea Party lists excessive government spending and taxation as the impetus for its movement. Another conservative group, Americans for Prosperity, lists TABOR-style tax and expenditure limitations among its missions.
But the strategy has been derided by the League of Women Voters as "a proven failure."
Buchanan of the Denver think tank called TABOR-style caps "an abdication of the legislative obligation'' to write a budget.
"Really, the only argument that could be made for it is the ideological argument that government is too big and will always be too big," he said.