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Florida Amendments: The High Cost of Low Taxes

Lifestyle & Opinion


Amendments two, three, four, nine, ten and eleven all involve making changes to our tax code by changing the Florida state Constitution. Florida continues to languish behind the rest of the nation in economic recovery. In last year’s budget, the state government slashed one billion dollars in education spending, including 179 million for construction and upkeep of Florida colleges. All the while, Floridians continue to enjoy one of the lowest tax burdens in the nation, along with public schools that rank in the bottom quarter of all schools in the country. Here is how much the savings on your tax bill will cost.

Amendments two, and nine cut property taxes for disabled veterans, and the surviving spouses of veterans. Amendment two would benefit resident disabled veterans over age 65, even if they were not living in the state before they enlisted. Florida already offers up to a $10,000 exemption for disabled veterans, $5,000 for disabled veterans of any age, and another $5,000 for disabled veterans over 65. The state also waives property taxes for total and permanent service related disabilities. According to the Collins Center for Public Policy, the state’s Revenue Estimating Conference believes that amendment two would cost approximately 15 million dollars in the first three years.

Amendment nine would provide a full property tax exemption to spouses of veterans and first responders killed in the line of duty. The exact costs are difficult to pin down, Collins cites an REC estimate of  600,000 dollars in the first year. Amendment three’s cost is less immediate.

Amendment three is the ‘smart cap,’ that changes the way the state collects revenue. It changes the revenue limits in our Constitution from being based on the rate of income growth for all Floridians over a five year period, to one based on population growth and inflation. The University of Florida Electronic Data Information Service reports that according to state legislative research, the state would collect more than 60 billion in fiscal year 2019-20 under our current laws. With amendment three the amount would be approximately 38 billion.

The law is similar to Colorado’s experiment with a smart cap that limited revenue collection. As the financial crisis hit, the Colorado state legislature had to modify the law to keep basic services such as education, roads and transit funded. Proponents of the amendment, such as Senate President Mike Haridopolos claim that amendment three is needed to reign in government spending. The American Association of Retired Persons and the League of Women Voters oppose the law; they believe it will necessitate cuts to critical services such as education and healthcare. Amendment three’s cuts are minor compared to amendment four, which comprises more than 90% of the fiscal impact of the proposed amendments.

Amendment four would reduce the annual increase in taxable value of non-homestead properties by 50 percent. Non-homestead property includes vacation homes and business properties. It would provide an extra exemption for first-time home buyers, and let legislators prohibit increases for properties whose values are decreasing. Those in favor of the amendment hope that this amendment will help the real estate market, but critics point to the cost – one billion dollars in revenue over three years. According to the Center on Budget and Policy Priorities those cuts could present a serious threat to the safety of Floridians, “at current rates the local revenue loss would grow to 471 million by 2016 – the equivalent of 7,656 police officers” calculated by average salary. They also point out that the primary beneficiaries of this amendment are out-of-state corporations and non-resident home owners who will enjoy savings at Floridians’s expense. This year’s ballot throws another bone to business in amendment ten.

Amendment ten provides an exemption for property used in business. To qualify for the proposed exemption the property value must be more than 25,000 dollars and less than 50,000. The legislature believes the exemption would help small businesses. Critics point to the price tag, another 61 million in the first three years.

The final tax amendment, number 11, extends the homestead exemption for low income seniors who have lived in their homes for more than 25 years. The cost to do that would be 18.5 million dollars over the first two years.

Should Floridians vote in favor of these amendments, they will add to our deficit with no guarantee that it will stimulate the economy. As it stands, the state faces a potential 1.7 billion dollar revenue shortfall after two years of unprecedented budget cuts. The legislature is offering citizens a deal: short term tax savings in exchange for less fire and police protection, failing public schools and higher college tuition. How about it? Is Florida ready to pay the high cost of low taxes?

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