Amendment 3: State Government Revenue Limitation

Published: Saturday, October 6, 2012 at 6:01 a.m.
Last Modified: Sunday, October 7, 2012 at 12:53 a.m.

A look at the constitutional amendments on the Nov. 6 ballot from the League of Women Voters of Florida Education Fund:

Amendment 3: State Government Revenue Limitation

Synopsis: Since 1995, Florida has set a cap for the amount of revenue it can spend every year from taxes and fees imposed on everything from gasoline and tobacco sales to business licenses and auto titles. Any excess revenue above the cap is to be deposited in the state's rainy day fund or returned to taxpayers rather than be spent by the government. The cap is considered by its backers to be a self-imposed restraint on government growth. The current cap is set using a formula based on changes in Florida personal income (a cumulative total of all personal earnings such as wages, dividends, rent or interest income received in a given year by Florida residents). To date, state revenue collections have never exceeded the cap (largely due to rising personal income and falling tax rates). If passed, Amendment 3 would impose a stricter formula for calculating the revenue limit and, as a result, increase the likelihood it would affect government spending. The new formula would be based on annual population growth and inflation, instead of personal income. Those indicators are considered less volatile than personal income growth and more likely to constrain growth in state revenues. Critics fear the strict revenue limits would affect spending on necessary services like schools and public safety. According to one opposition group, the Center on Budget and Policy Priorities, the proposed amendment would result in allowable revenues 26 percent below pre-recession levels (2006-07) by 2025, potentially resulting in major cuts to all government services. Supporters say the cap is needed to limit government spending.

A vote YES on Amendment 3 would:

- Replace the existing state revenue limitation based on personal income growth with a new, more restrictive limitation based on changes in population and inflation

- Restrict government revenue (taxes, licenses, fees, fines or charges for services) in good and poor economic times

- Limit the Legislature's ability to increase revenue beyond what the formula allows

A vote NO on Amendment 3 would:

- Maintain the existing state revenue limitation based on personal income growth

- Protect the state's ability to provide the current level of government services

- Preserve the Legislature's current flexibility in responding to budgetary concerns and changing economic conditions

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