Summary
Amendment 5 would require a two-thirds vote of both chambers of the Florida legislature to enact new taxes or fees or increase existing ones.
Fiscal Impact
We estimate likely no short-term changes, although long-run estimates suggest revenue growth would be limited.
Proponents’ Argument For
Proponents argue that Florida should join states that require a supermajority to raise taxes and enjoy similar economic benefits. They argue that this measure is especially important for a state that has marketed itself as business-friendly, low tax, low regulation.
Proponents say that Florida’s job growth would be helped in the long-run by all of the money that is kept in the pockets of business owners and residents.
Florida has seen troubling growth in its spending habits over the last five years, with spending increasing 31 percent compared to the national median of 18 percent. Proponents say Florida should make raising taxes more difficult so that spending growth, like that in recent years, is not encouraged further the by allure of easily raising taxes in order to pay for it.
Opponents’ Argument Against
Opponents argue that this is a fiscally irresponsible, short-sighted, politically motivated move on behalf of Florida’s Republican-dominated legislature. Critics claim that this measure unnecessarily limits the Florida legislature’s ability to be fiscally responsible and manage revenue commensurate with public needs. At a time when public health costs, pensions, and debt are certain to create future budget growth, this measure would arbitrarily make it more difficult to raise taxes in order to deal with those issues. Floridians deserve a functioning, fiscally-healthy government that won’t limit itself for ideological reasons.
Opponents also claim the measure is short-sighted because it restricts raising taxes but allows for more targeted tax breaks and credits to be given to preferred businesses and favored interests of the legislature. The long-run effect would be a more regressive, complicated, and corrupt tax system than what already exists.
Discussion
While Florida is already a relatively low tax state, tax restriction measures are a popular way for taxpayers to ensure that limits on government overreach and spending remain. Florida is marketed, and sought after, as a business-friendly state that promises low taxes. This measure would further solidify Florida’s competitiveness on those fronts.
Proponents are correct that spending growth has outpaced national averages in Florida in the last 10 years, although most of that growth is partially due to Florida’s above-average recovery from the recession. Still, a supermajority tax requirement doesn’t necessarily stop spending growth. Research indicates that states that have a culture of spending increases often continue to spend, and states with a frugal fiscal culture tend to remain so even after a supermajority is imposed for tax increases. This indicates that a state facing a possible change in political culture may restrain tax increases with a supermajority requirement.
Voters’ Guide to the 2018 Florida Ballot Amendments
The Voters’ Guide examines the proposed amendments to the Florida Constitution that are on the Nov. 6, 2018, ballot.