Economic Development and the Proposed Constitutional
Amendment 9, Florida’s Amendment to RReduce Class Size
Recommended by the By Enterprise Florida, Inc. Legislative Committee

As the state’s economic development organization, Enterprise Florida, Inc. (EFI) knows that class size is an important issue to parents, educators and the business community in Florida. EFI shares this focus on quality education for Florida’s children as a top priority. However, the issue of reducing pupil to teacher ratio should not cannot be viewed in isolation.

The class size amendment would require a significant contribution from taxpayers. Based upon a June 27, 2002 report of the state Revenue Estimating Conference, the proposed constitutional limitation on class size will cost the state between $20 billion and $27.5 billion to implement over the next seven years. Once fully implemented, each year’s operating costs are estimated to be $2.5 billion in today’s dollars.(time period?) To put these costs in perspective, the entire state budget for education kindergarten through graduate school was in the range of $16 billion this school year. The magnitude of this funding demand will clearly require increased taxes and reductions in state services, including jeopardizing funding for fundamental economic development programs and infrastructure.

The unintended demands -- resulting from the adoption passage of the Reduce Class Size, proposed constitutional amendment -- on Florida’s fiscal resources would be enormousare too great. Less costly alternatives should be explored instituted prior to attempting to amending the states Florida C constitution.

The class size amendment would require a significant contribution from taxpayers. Based upon a June 27, 2002 report of state economists on June 27, 2002, the proposed constitutional limitation on class size will cost the state between $20 billion and $27.5 billion or more to implement. To put these costs in perspective, the entire state budget for education kindergarten through graduate school was in the range of $16 billion this school year. The magnitude of this funding demand will clearly require increased taxes and a reduction in other state services.

Moreover, this proposed (if adopted) massive and unavoidable increase in taxes and drastice change in tax policy would handicaps on Florida’s global competitiveness for high, value-added businesses. These businesses that invest capital, pay higher wages and provide a stable foundation for our economy. These kinds of Ccompanies like this migrate to – and thrive in – locations that provide a competitive business environment, including a predictable, favorable, stable tax structure and economy. The potential adoption passage of Constitutional aAmendment #9, Reduced Class Size, (November 2002 Ballot) has had a destabilizing effect on added to an already uncertain economic environment in a manner that could damage Florida’s long-term competitiveness.

As long as this kind of threat of - to tax increases exists, companies may hesitate to invest and create jobs in Florida. Any threatened instability anticipated increases in the state’s tax structure and policy handicaps Florida’s competitiveness and hampers the ability of economic developers to bringbring high-wage jobs and revenue generatingrevenue-generating companies to the Sunshine State.

EFI encourages that state and education officials, teachers and parents explore proven cost-effective alternatives to reducing class size that are less costly and promise greater return on our education investment. Fundamental to this analysis is consideration of the monumental fiscal impact Amendment 9 will have on Florida’s economy and tax policy.

As a matter of economic development, EFI believes that state and education officials, teachers and parents should explore proven cost- effective alternatives to reducing class size that are at once less costly and promise greater return on our education investment.