Smart-Capping the Tax-and-Spenders

There’s a really good, game-changing idea barreling down the political pike toward us. It’s called Smart Capping, and the Florida Senate is debating it. Taxpayer-friendly proposals don’t come along that often, and when they do taxpayers need to hop on board and make sure they pass.

At a time when politicians need to bring spending and deficits down dramatically, Smart Caps, which place iron-clad restraints on tax growth, is an answer. Smart Caps, which puts a lid on runaway government spending, limits government growth by leaving more dollars in the hands of taxpayers, and less in the hands of government. It’s a tax limit with real teeth, and it makes the public employee union bosses hyperventilate.

Taxpayers need more control over government spending. We need a tax and expenditure limitation policy based on something more rational than spending whatever money comes in the door– right now, politicians use a different program. They use TIA -TAKE IT ALL.

We don’t need politicians jamming us deeper into the Hades of high taxes. What we need at all levels of government are “Live-Within-Our-Means” budgets. Many liberal politicians want mandatory this andgovernment-controlled that, because they don’t trust people to know what’s good for themselves. Well, local families must live within their means, and our county and state should do it also.

Here’s the way Smart Caps works: it limits tax revenues collected by state government to the amount collected the previous year, plus an annual adjustment based on the combined total of population growth and the rate of inflation. Any revenues in excess of the limits will be placed in the state’s “rainy day fund” until it reaches 10% of the prior year’s total budget. At that point, the excess revenue will first reduce property taxes (the portion known as the RLE “Required Local Effort”) then the Legislature must vote to provide tax relief of its choosing.

Sen. Ellyn Bogdanoff is sponsoring this Bill Relating to State Revenue Limitations. She explains that the legislature retains options to increase the state revenue limitation, to deal with emergencies and recessions. And, Florida voters have the authority to increase the revenue limitation– the Legislature may place before the voters a measure to increase the state limitation by a resolution approved by a two-thirds vote of the membership of each chamber.

Business groups and taxpayer advocates support this legislation that establishes a state revenue cap because it is clear that the state has not demonstrated fiscal restraint in the past when revenues were increased beyond the legitimate needs of the state.

Smart Caps is not all that new, as BIZPAC pushed the Palm Beach County Commission to adopt a form of it – called a Taxpayer Bill of Rights – back in 2005 and 2006. The commission refused.

Spending excess revenues, especially launching recurring programs that must continue to be funded in the future, puts Florida in the position to possibly raise taxes to fund those programs when revenues fall off.

Placing a Smart Cap in the constitution that requires a supermajority encourages fiscal discipline for future legislative bodies, and is a safeguard against the ambitious designs of political tax-and-spenders. South Florida Senators who oppose this bill as is are Senators Nan Rich and Gwen Margolis, two liberals who don’t think we spend enough.

Taxpayers will like Smart Caps, tax consumers won’t. The time has come for government to restrict itself to reasonable expenditures. Stop them before they spend again!

John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company. He is a frequent columnist for BizPac Review.
John R. Smith

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