Finance & Taxation/TABOR

The League of Women Voters of Florida supports a state fiscal structure that is equitable in its distribution of the tax responsibility and responsive to public needs. The League promotes equitable tax policy reform that provides adequate funding for state services. The League supports the repeal of tax exemptions that do not fulfill a public purpose.

Background

The League believes local governments should have available a variety of options for generating revenues to meet local needs. Florida’s revenue structure is inadequate to meet the needs of Floridians. The legislature already substantially cut the public education budget and many other services that are essential to our state’s long-term prosperity. The federal stimulus monies awarded to Florida have postponed but not solved some of the financial problems facing the state, including those in education funding.

During the 2009 session, everyone on the Senate and House Finance and Tax Councils was asked to review all current sales tax exemptions. For the first time in decades, the Senate Finance and Tax Committee heard a presentation that identified over $2 million in exemptions that could be eliminated. While the committee expressed a willingness to consider ending some tax exemptions, very few members recommended eliminating any of the exemptions they reviewed, and none of those recommendations were adopted by either Council. Instead, the House and Senate agreed to raise fees on services such as driver’s licenses, title transfers, court fees, university tuition, and fishing licenses. Some of the fees were more than doubled. A bill introduced in the House called for all reviewable tax exemptions to be considered for repeal or modification by the Joint Legislative Sunset Committee and for all reviewable exemptions to expire if not renewed or modified. A companion bill was filed in the Senate. The House bill was never placed on the agenda of the Finance and Tax Committee, and the Senate bill never made it out of its first committee. A Senate bill that increased the cigarette tax by $1 and levied the tax on all tobacco products except for cigars did become law.

In a repeat of the 2008 session, a bill was introduced in the Senate that would close an existing tax loophole in Florida’s system that allows companies in Florida to assign business profit gained in Florida to other states, thereby avoiding Florida taxation. The League supported this legislation and spoke in support of it. The bill passed successfully through three committees before dying in the Policy and Steering Committee on Ways and Means; a House companion bill was never heard in committee. Still, another Senate bill was introduced that would close other corporate tax loopholes dealing with deductibility of intangible expense, interest expenses, and management fees. This bill also died in committee. Bills that would tax bottled water sold in Florida and tax Internet sales did not make it out of committee in 2010.

In both sessions, the TABOR (Taxpayer Bill of Rights) constitutional amendment was introduced. The League strongly opposed the amendment that would require budget cuts in both good and poor economic times because revenues above a formula-based limit could not be spent. It would mean that state services would constantly face budget cuts and deteriorate in most years. During the 2008 session, the proposal was voted down in the Taxation and Budget Reform Commission. While it passed the House, it died in the Senate. Unfortunately, it arose again during the 2009 session. While it passed through one committee in the Senate, it was postponed four times in a second committee where it finally died. In the House it also died in committee. While a TABOR bill surfaced briefly during the 2010 session, it was not brought up in committee.

Introduced during the 2011 legislative session and dubbed "SmartCap" by Senate President Mike Haridopolos, Senate Joint Resolution 958 is a joint resolution for a ballot amendment that will come before voters in 2012. It proposes to amend the state Constitution to replace the existing state revenue limit based on personal income growth with a new revenue limit based on a formula of change in population and inflation. It would require excess revenue be placed in the budget stabilization fund, used to support education, or be returned to taxpayers. It allows the legislature to increase the revenue limitation by a supermajority vote or to put a proposed increase before the voters. It would first apply in fiscal year 2014-15.

For more information about SJR 958, review the League's white paper, "Vote No on SJR 958: A Proven Failure," the Center on Budget and Policy Priorities' white paper, "SJR 958 Florida TABOR/'SmartCap': A Ticking Time Bomb," and the Center on Budget and Policy Priorities' report, "Florida 'TABOR' Proposal SJR 958 Would Endanger Education, Public Safety, and Infrastructure: (document viewer)

Legislative Position LWVF will support tax legislation that:
- Focuses more on ability to pay;
- Does not jeopardize local services;
- Addresses Florida’s infrastructure deficit;
- Enhances Floridian’s quality of life; or
- Removes unfair tax exemptions that hinder the state’s or local governments’ ability to serve Floridians.

LWVF will oppose tax legislation that:
- Does not provide true, fair tax relief to Floridians; or
- Further burdens the state’s or local governments’ ability to serve Floridians.

LWVF will support legislation that:
- Requires periodic review of all current tax exemptions and the repeal of those that do not serve a public purpose.
- Provides for the collection of taxes on Internet sales.
- Levies taxes on corporations earning money in the state but reporting the income in other states.

LWVF will not support legislation that:
- Continues the status quo for tax exemptions.

TAKE ACTION SEND a letter-to-the-editor for publication to your local news outlet expressing your opposition to the TABOR ballot amendment.

DONATE (link to LWVF donation page) to the League of Women Voters of Florida Advocacy Fund to help us campaign against the TABOR ballot amendment.

COLUMNS w/ scrolling: Useful links Links to TABOR Press Release PDFs Links to News Articles on TABOR Imbed of CBPP: The Real Story Behind TABOR Video