Florida Chief Financial Officer Alex Sink made a rare appearance before the Taxation and Budget Reform Commission Monday with a serious warning: you approve the tax cap, known as CP45, the taxpayer cost of bonding will soar.
"This proposal before you today has very serious long-term implications in terms of bonding,'' she said. She noted how the Fitch rating agency last week downgraded the bonds for Florida's Everglades funding because of the downturn in documentary stamp revenues. The change will cost the state $100 million in increased interest costs on $12 billion in bonds, Sink said.
Something similar will happen if the commission approves and voters support a constitutional amendment that caps all tax revenues based on a formula that includes population growth, inflation and one percentage point, she said.
"Any provision that we place that limits our ability and limits our flexibility, such as this proposal in front of you, will cause the credit markets to seriously consider downgrading becasue our flexibillity will be serverely limited,'' she said.
Over the next 10 years, "if the past is any indication, our local governments will be scheduled to issue $200 billion in bonding which would result in, conservatively estimated, $2 billion in additional cost to taxpayers,'' she said.
The tax commission has just started to take up a series of amendments to the tax cap plan proposed by Commissioner Mike Hogan and will vote on the measure today, it's last scheduled meeting to choose which amendments get placed on the ballot.