September 27, 2018

Local Governments in Florida Would Struggle to Provide Critical Services Under Amendment 5

Restricting state lawmakers’ ability to raise revenue will negatively impact cities, towns and counties across Florida

LAKE MARY, FLWhen Florida lawmakers are unable to raise revenue to support communities, the burden then shifts to local governments to either raise local taxes and fees or make cuts to needed programs and services, like water and sewage, roads, parks and beaches. A new policy brief from the Florida Policy Institute examines the impact that Amendment 5 would have on cash-strapped counties and municipalities.

On November 6, voters in Florida will decide on a constitutional amendment that would require a two-thirds (supermajority) vote of the state Legislature to raise state revenue, taxes and fees or eliminate tax breaks and loopholes.

State support is crucial for large-scale infrastructure, transportation and affordable housing projects. The Institute found that in 2016, the state provided $2.8 billion to counties. Florida’s support for municipalities totaled $1.5 billion that same year.

The brief also shows that rural counties would be disproportionately impacted by any cuts to state support; on average, state dollars account for 17 percent of total revenue in rural areas — in some cases reaching up to 40 percent — as opposed to 6.6 percent in metropolitan counties.

Special interests have falsely branded Amendment 5 as a taxpayer-protection measure, when it’s the exact opposite. The measure would enshrine tax breaks and loopholes in state law that benefit the wealthy and large corporations, while endangering state support that localities depend on to meet the needs of our families and small businesses,” said Joseph F. Pennisi, executive director of the Institute.

Two other measures on the 2018 ballot would directly impact local governments’ ability to raise revenue. Amendment 1 would increase the homestead property tax exemption for homes valued at $100,000 or more by raising the portion of a home’s value that can be exempted from property taxes, while Amendment 2 would make the 10 percent cap on non-homestead property assessment increases permanent. If adopted, these measures would cost Florida counties and cities hundreds of millions of dollars each year.

“State and local lawmakers must have the flexibility to respond to the changing needs of their communities, whether that be in the wake of an economic recession or following an environmental disaster. Amendments 1, 2 and 5 would take away that ability and put investment in families in jeopardy,” added Pennisi.

The Florida Policy Institute’s mission is to advance state policies and budgets that improve the economic mobility and quality of life for all Floridians.

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