Likely Economic Consequences of CS/HB 1: Combating Public Disorder
by Rick Harper, Ph.D.
CS/HB 1: Combating Public Disorder, will have a number of effects on Florida businesses and taxpayers if it becomes law. Recently, I examined the changes that would be made to Florida law with an eye toward the likely economic and fiscal consequences of those changes. The following points discuss some of the likely impacts.
Florida has experienced decreased crime rates over the last dozen years that have reduced prison population and allowed lawmakers to decrease incarceration expenses by $1.5 billion dollars in the most recent fiscal year (in inflation-adjusted 2020 dollars) relative to what they were in 2008. This reduction in corrections spending has freed up tax dollars to be allocated to other uses, whether in education, health care or other programs, or in tax reductions to Florida businesses and families. These gains will be put at risk by the expanded definitions, increased criminality, and enhanced sentencing that are at the heart of CS/HB 1.
- Sentencing changes resulting from the bill would likely result in a need for between 270 and 720 additional prison beds at any given time, at an expense to Florida taxpayers of between $6.6 to $17.5 million per year.
- Additional time spent incarcerated increases negative labor market impacts for those likely to be sentenced under the new provisions. Conservative estimates of these reduced Florida earnings suggest a loss of between $15.9 and $42.4 million dollars per year.
- Longer prison sentences are associated with increased criminality and resulting costs to society upon release. The proposed changes in the law imply increased net costs to Floridians of some $2.7 to $7.2 million annually relative to previous law.
- Each additional year behind bars reduces expected post-release employment by 3.6 percentage points.
- Among felony defendants with stable pre-charge earning who are incarcerated for one or more years, post-release employment drops by at least 24 percentage points.
- These negative labor market outcomes also predict increased take-up rates of taxpayer-financed public assistance.
- Taken together, these impacts are expected to result in between $25.1 and $67.1 million in lower income and increased taxes to Floridians each year.
The bill also includes a waiver of sovereign immunity for tort claims arising from a riot or unlawful assembly if the governing body of a municipality interferes with law enforcement's ability to provide reasonable police protection. Further, the bill creates a process by which either the state attorney of the judicial circuit in which a municipality is located, or an objecting member of the municipality's governing body may appeal a funding reduction to the operating budget of the municipal law enforcement agency to the Administration Commission. These provisions would have substantial negative impacts on local government authorities’ control over their budgets and on their financial risk profiles. These impacts will result in higher budgetary outlays that will need to be financed via higher taxes to residents or via cuts in other valuable public services.
- The waiver of sovereign immunity will shift the risk perspective of local government, encouraging them to ban gatherings more aggressively since the gain to local budgets from bed taxes and local option sales tax revenue could be more than wiped out by an expensive personal injury or property damage claim.
- Even as Florida touts the attractiveness to being open for business while other states remain closed due to the pandemic, this bill may well cause increased caution for municipal governments and additional expense to insure against lawsuits.
- The changes may have the potential to help hold down homeowners and business property insurance due to less risk of damage as municipal governments either shut down large gatherings, or require gatherings to be privately insured, or implement more intensive policing. Such benefits may come at the expense of the volume of tourism activities, and thus to Florida businesses’ ability to create jobs for Florida residents.
- The reduced ability to control law enforcement budget provisions may be costly. Florida has been able to cut state and local spending on police by 2.1 percent in the 2008 – 2017 period at the same time as such spending increased by 5.1 percent nationally. This spending reduction is put at risk by the law enforcement spending provisions of the new bill.
- The unlimited liability provided by the waiver of sovereign immunity, combined with the much greater ease of challenging any proposed decrease in law enforcement budgets, has the risk of driving local government spending and law enforcement spending ever higher.
HB 1 provided an affirmative defense available to a defendant in a civil action for personal injury, wrongful death, or property damage if the plaintiff’s injuries or damages were caused because he or she participated in a riot or aggravated riot. The plaintiff’s participation in the riot or aggravated riot can be established by the plaintiff’s criminal conviction for rioting or aggravated rioting, or by a preponderance of the evidence in civil court that the plaintiff participated in a riot or aggravated riot.
- By providing a potential defense against liability for someone injuring a protester or property, the bill inadvertently may contribute to an increase in injuries or damages if it causes counter-protesters to take less care or caution in behavior towards protesters found to be acting in furtherance of a riot. This might provide an affirmative defense in such circumstances as the killing of protester Heather Heyer who was killed in Charlottesville, Virginia by a counter-protester’s car, or the killing by Kyle Rittenhouse of two protesters in Kenosha, Wisconsin.
In summary, economic analysis suggested that loss of sovereign immunity, difficultly of lowering law enforcement spending even as crime rates drop, along with the expanded and upgraded criminality proposed by HB1 and its related bills will be unlikely to achieve a public safety solution that improves the well-being of Floridians. Instead, the bill, if passed and signed into law, will impose costs to the taxpayer and to Floridians generally that far exceed the possible benefits of the increased sanctions.