Matthew Falconer; The Case for 'Smart Caps'

falconer1By Matthew Falconer 

The “Smart Cap,” which was formerly known as the Taxpayer Bill of Rights, limits state and local government revenue to the previous year plus an increase for inflation and population growth. The most recent bill can be found on the link below;

http://flsenate.gov/data/session/2009/Senate/bills/billtext/pdf/s1906.pdf

While the concept of a revenue cap on government is simple the ramifications are complex. The opponents of revenue limits, mostly government labor unions, will say the revenue limits will have “negative consequences” for Florida’s citizens. Their arguments can be seen on the link below;

http://www.seiuflpublicservicesunion.org/politics/tabor/default.aspx

Of course these arguments come from special interests groups who want the unlimited flow of money to continue. Florida governments have proven in the past decade they will spend as much money as they can generate. In 2002, Florida’s state and local government spending was $93 billion a year. In 2006, that figure exploded to $151 billion, and most of this increase comes from salary and benefit increases to those government labor union members.

The economic consequences to the State of Florida from increases in government spending have been severe. Unemployment increased 400% since the boom in government spending started. Part of the reason the Florida economy went from first in the nation to 47th is because our own governments diverted $58 billion a year from the private sector to the government. We literally starved small businesses of revenue.

Another effect of the massive spending and tax increases is we drove second homeowners and business out of the State of Florida. For the first time since World War II we have a declining population. And second homeowners leaving the State by the tens of thousands created a glut of homes and exasperating the housing crisis. The only way to restore economic prosperity in Florida is to increase the revenue flowing to the private sector. And the only way to accomplish this is to reduce the amount of revenue flowing to the government. Economics is a zero sum game; every dollar the government takes in is a dollar taken out of the private sector economy. Since the private sector uses revenue more efficiently than government, the more revenue in the private sector the healthier the economy.

As we enter a fourth year of recession in Florida it has become clear our economy cannot afford the weight of our own government.  Public employees now make double the private sector for the same work in many cases and the pension and other benefits are not sustainable.

WHAT WILL SMART CAP DO

Smart Cap will place a budget ceiling on all governments in Florida. With this revenue and spending limit, governments will be forced to run their affairs a business with limited resources. They will be required to make adjustments to their pay and benefits and bring them in line with the private sector. Governments will be required to prioritize which services they provide and return to the core functions of government.

Smart Cap will eliminate the corporate welfare programs like sports arenas unless the voters specifically approve them. Smart Cap will take away power from special interests and give it back to the people. But ultimately Smart Cap will force reforms that will reduce the waste in government we all know is there. Without Smart Cap the political will for these reforms is non-existent. Government labor unions, especially on a local level, have too much power for elected officials to enact real reforms. Smart Cap will draw a line in the sand and require government to address its unsustainable policies.

WHAT HAPPENS WITHOUT SMART CAP

Without placing a limit on the growth of government the Florida economy will continue to erode. The built in cost increases of government will devour an ever increasing portion of our economy. The disposable income of the consumer will continue to shrink as governments find new ways to tax them with “revenue enhancements.” As the consumers disposable income shrinks the revenue flowing to small business decreases and unemployment increases.

Smart Cap will ensure economic prosperity for the next generation in Florida. Without it we will see years of high unemployment and suffering by our citizens.

SMART CAP, A CHOICE OF WHO YOU STAND FOR

The decision to support Smart Cap depends on who and what you stand for. If you stand for the taxpayers of the State of Florida, you support Smart Cap. If you support government labor unions, who have negotiated overly generous salary and benefits at the expense of the taxpayer, you are against Smart Cap. If you stand for a healthy economy, you support Smart Cap. If you stand for the next generation and their standard of living, you support Smart Cap.

Smart Cap is critical to the economic health of our State.

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