MiamiRealEstateKing

New report: Amendment 4 passage would have ‘devastating consequences’

In real estate on October 25, 2010 at 11:28 am

TALLAHASSEE, Fla. – Oct. 21, 2010 – Florida TaxWatch released a new report this morning on the potential outcome of Amendment 4 passage on Nov. 2. According to the report, passage would severely harm the state’s economic recovery, future job creation, and dampen personal income.

The economic impact analysis, “Land Use Planning by Referendum: The Economic Consequences of Amendment 4” – conducted by the Florida Council of Economic Advisors at Florida TaxWatch and a team of researchers from the Haas Center at the University of West Florida – explains the future if Amendment 4 passes, which would require voter approval of all changes to local comprehensive land use plans that cities and counties use as a specific outline for future development.

“During the Great Recession, when Florida has double digit unemployment, the most important issue with Amendment 4 is its effect on our economy and the taxpayers of Florida,” says Dominic M. Calabro, president and CEO of Florida TaxWatch, a non-partisan, non-profit public policy think tank and state government watchdog based in Tallahassee. “This analysis reveals that Amendment 4 will cost Floridians more than 250,000 jobs at a time when more than 1 million Floridians are out of work. Amendment 4 imprudently adds another layer of cost to the taxpayers while jeopardizing Florida’s long-term growth and prosperity. This analysis shows that Florida simply cannot afford Amendment 4 and it should not be in Florida’s Constitution.”

The analysis estimates that Amendment 4 would cost:

• More than 260,000 jobs
• $16.7* billion in personal income
• $21.6 billion* in Gross State Product
• $2.2 billion* in state tax revenue
• $227 million loss in property taxes – approximately $3.4 million per county
(*Estimates are average over six years in constant 2010 dollars)

“The economic impact of Amendment 4 is likely to be quite large, and the unintended consequences accompanying them are a much more severe set of problems than we see now,” says Dr. Rick Harper, director of the Haas Center. “As the state economy recovers, these effects will grow substantially. There is little doubt that developers and investors will consider the increased uncertainty associated with Amendment 4 and many may decide that the risk is too high and locate elsewhere – taking jobs and economic growth with them. The negative economic consequences of Amendment 4 are likely severe, long lasting and difficult to reverse once initiated.”

Among some of the effects: a steep decrease in jobs, particularly high-wage jobs, over the next three years; losses in personal income that persist over time; decreased housing affordability; and lower tax revenue collections, which may lead to increased taxes and fees in order to fill the budget gap.

The new report follows on the heels of an earlier briefing by Florida TaxWatch.   This report estimates the fiscal impact of voter approval for all changes to comprehensive land use plans. It found that passage of Amendment 4 would result in hundreds, if not thousands, of elections, which would incur millions of dollars in costs at the taxpayers’ expense. The Florida TaxWatch analysis estimates that the direct cost to the taxpayers throughout Florida for these special elections would be $44.6 million to $83.4 million annually. That analysis further estimates that litigation resulting from the additional and expanded elections required under Amendment 4 could result in legal costs to local governments of more than $1 billion annually – or more than $135 per Florida household annually.

“Instead of risking hundreds of thousands of jobs as well as our state’s economic recovery by marking up Florida’s Constitution, Florida should instead focus on making improvements to the existing growth management structure and process to ameliorate growth management issues to promote healthy investment,” adds Calabro.

The analysis uses Regional Economic Modeling Inc. (REMI) model of the Florida economy – a dynamic econometric forecasting tool used by the Florida Legislature that calculates the direct, indirect and induced effects on economic activities such as spending and employment that results from a policy change – with three scenarios to calculate the long term effect of Amendment 4.

Dr. Stefan Norrbin, professor of economics and the director of the master’s program in economics at Florida State University, conducted an independent review of the study’s model, methodology and the plausibility of assumptions made.

Norrbin: “It is my best professional judgment that the study has used plausible assumption of the parameters needed to make an informed decision about Amendment 4, and has used state of the art modeling and methodology to estimate the impact of the proposed Amendment 4.”

Dr. Stephen Morrell, professor of economics and finance at Barry University and chair of the Florida Council of Economic Advisors at Florida TaxWatch: “My review concluded that the empirical economic and fiscal impact estimates presented in the Haas Centers study should be viewed as highly credible and accurate.”

The complete study is available online in PDF format: http://www.floridataxwatch.org/resources/pdf/10202010Amendment4v2.pdf

Reprinted by Permission: © 2010 Florida Realtors®

Advertisements
  1. New report: Amendment 4 passage would have 'devastating ……

    Here at World Spinner we are debating the same thing……

  2. Miami Existing Condominium Sales Continue to Rise Single-Family Home Sale Prices Hold Steady…

    We liked your article, so we (RambergMediaGroup) would be interested in hearing from you, our readers like it….

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: