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Amendment 10: Should Florida's Constitution be changed to ease the tax burden on small businesses?
Joe Saunders
Current Florida law exempts businesses from paying taxes on the first $25,000 in valuation on tangible personal property -- the furniture, computers and other equipment that keeps a business running. A proposed amendment to Florida's Constitution would increase that exemption to $50,000, so long as the value of the property does not exceed that amount. Supporters of the amendment say the increased exemption will improve the economic environment for small businesses, the main source of employment in the Sunshine State. Opponents say it would cost local governments too much revenue in a time already marked by belt-tightening. What do you think?
Bill Herrle
Executive Director, National Federation of Independent Businesses/Florida

In November, voters are going to face a slew of amendments on the ballot, but only one of them is sure to give small business and our economy a shot in the arm if it’s passed.

Amendment 10 might sound confusing if you’re not a small business owner, but it’s this simple – business owners are re-taxed every year on their tangible property assets (desks, computers, machinery, signs, etc). Yes, even though they already paid sales tax on the items, they must sit down and recalculate all of their tangible property and refile taxes on it.

Small businesses bear the burden of many complicated tax structures and regulations. But these taxes not only take away from the money they are able to use to pay employees or expand their services, they take away their time. Small business owners spend countless hours ensuring compliance with the TPP – we want to give them that time and money back by passing Amendment 10 so they can put it back into their businesses and communities.

In 2007, business owners got a small exemption in the TPP by way of Amendment 1 – for up to $25,000 in tangible property, they no longer had to file the tax. During the 2012 Legislative Session, the National Federation of Independent Business, Associated Industries of Florida and other business groups came back to the table and helped pass a joint resolution to increase the TPP exemption to $50,000 to help even more small businesses.

If a business has less than $50,000 of TPP, they will not need to file the tax. The owner of a business owner that has more than $50,000 of TPP would still only get the current $25,000 exemption. This means that if Amendment 10 is passed, the savings would be truly limited to small business owners – the job creators right in your backyard.

There’s something else unique about Amendment 10: It benefits local municipalities in addition to the small business community. Amendment 10 provides local governments the option to raise the exemption – an added economic development tool to help attract new investment and jobs to their areas.

So Amendment 10 really is simple – a boost to small business, a boost to your community benefits and a boost to our state’s economy.

This commentary was co-authored by Tom Feeney, president and CEO of the Associated Industries of Florida, a government affairs and lobbying group that represents more than 10,000 businesses across the state.

For more information about the Amendment 10 supporters' campaign, visit www.yesonten.com.

Jessica Lowe-Minor
Executive Director, Florida League of Women Voters

Although most Floridians wouldn't know it, the “tangible personal property tax” is something that businesses pay. Any equipment used to earn income, like furniture, fixtures, machinery, tools, shelving and signs, are examples of tangible personal property and are taxed in Florida, with revenues going to cities and counties.

Under current law, the first $25,000 of tangible personal property is exempt, so many small and fledgling businesses pay no taxes on their computers, weed-eaters, carpet cleaning machines, etc. If passed, Amendment 10 would boost that exemption to $50,000, and it would allow cities and counties to grant additional tangible personal tax exemptions beyond the $50,000 limit.

The state estimates that tangible personal property taxes represented an estimated 7.6 percent of total county property taxes and 6.1 percent of total city property taxes levied in Florida during fiscal year 2011-12. Statewide, if Amendment 10 passes, the added exemption proposed would reduce local property tax collections by $61 million over the next three years. At a time when local governments are cutting services drastically – laying off workers, reducing library hours and forgoing long-overdue infrastructure repairs – Floridians simply cannot afford more revenue reductions.
There is a reason people say that “all politics is local.” Most citizens' main interactions with government occur when they call someone about the pothole in front of their house or drop their child off at public school. Additionally, local government is “closest to the people” in the sense that it's geographically accessible. While it's relatively hard to get to Tallahassee or Washington, D.C., a trip to City Hall is something that virtually all Floridians – regardless of age, race, gender or income – can navigate. Thus, citizens' understanding of what government does, how it works and its direct benefits to them is inextricably linked with the actions, activities and expenditures of local commissions and school boards.

If passed, Amendment 10 will remove decision-making authority from local governments which, by virtue of proximity, are better equipped to understand the unique needs and challenges their communities face. The Florida Legislature is elected to handle state revenues, not local revenues, yet this year's ballot contains a number of measures – including Amendment 10 – that represent clear overreach on the part of legislators. By seeking to undermine municipal decision-making, and inappropriately attempting to enshrine such measures in Florida's Constitution, state lawmakers are disrupting the democratic process and putting services that we all depend on at risk. At the end of the day, citizens elect local officials to make local decisions, and the state should play a limited role.

Amendment 10 represents an inappropriate use of legislative power and should be rejected by Florida voters.

The League of Women Voters of Florida urges voters to learn more about all of the constitutional amendments on the ballot by visiting www.TheFloridaVoter.org.

Susan Smith
President, Democratic Progressive Caucus of Florida

Amendment 10 is one of five amendments on the 2012 ballot that would enshrine new tax reductions in the state constitution. It would hobble the ability of local governments to provide essential public services, and it is for this reason that the Democratic Progressive Caucus of Florida recommends a “no” vote on Amendment 10.

A strong public safety system, good public education and quality-of-life investments in our communities are vital to Florida’s economic future. We cannot maintain and attract business and industry to our state if we continue cutting local budgets. Amendment 10 would place a limitation on collecting revenue in our state constitution where it cannot be changed by future elected legislators.

Like Amendments 2, 4, 9, and 11, Amendment 10 would make it extremely difficult to adjust Florida tax policy in order to to respond to changing economic conditions. The Democratic Progressive Caucus of Florida believes that tax policy should be made through the legislative process, not through legislatively referred ballot initiatives.

Amendment 10 would double the current exemption on tangible personal property tax from $25,000 to $50,000. Furniture, fixtures, machinery, tools, shelving, signs and business equipment are examples of property that is subject to the state’s tangible personal property tax. Granting this exemption would mean an estimated $61 million less for local government coffers over the first three years.

If all five amendments that reduce local property taxes pass, local governments would lose well over $1 billion over the first three years of implementation. This lost revenue would mean more than $1 billion less for our public schools, health care, roads, bridges, sidewalks, libraries, police and other essential services – losses which Florida likely could not recoup through legislative changes in tax policy.

Supporters of Amendment 10 say that it is necessary to promote business development in Florida. We disagree. Businesses cannot survive in unsafe communities with bad public schools. Municipal and county governing bodies will not be able to provide essential services that create a healthy environment for business development if they are continually stripped of revenue. Over the past several years, the Florida Legislature has forced more responsibilities down to local governments while limiting the ability of those governments to pay for community needs. It’s time for our elected representatives to address the inequality in our tax system and not evade their own responsibility to govern.

The Democratic Progressive Caucus of Florida recommends a “no” vote on Amendment 10.

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