Florida Government and Politics Weekly Update

12 January 2009 Publication
Author(s): Robert H. Hosay Thomas J. Maida

Public Affairs News Alert

State Budget: House and Senate Budget Conferees Reach Agreement
The Florida Legislature convened in special session to address the state budget deficit on Monday, January 5, 2009. By Friday, January 9, 2009, both the Senate and the House of Representatives had held extensive committee hearings and floor debate, passing their respective budget bills largely on party-line votes.

The conference committees appointed to resolve differences between the two chambers met throughout the weekend. Going into the conference process, the major differences between the Senate and the House included the amounts to be drawn down from the Budget Stabilization Fund and the Lawton Chiles Endowment, and whether $200 million would be diverted from transportation projects to address the general revenue shortfall.

The conference committees announced that agreement had been reached on the morning of Sunday, January 11, 2009. Under the state constitution’s 72-hour cooling-off period for spending bills, members of the Legislature will first be able to vote on the agreement on Wednesday, January 14, 2009.

Because of concerns that the deficit, currently estimated at $2.4 billion, could increase before the end of the fiscal year, the budget agreement provides up to $2.8 billion in transfers and savings. The major provisions of the agreed budget language include:

  • Total spending cuts of $1.2 billion.
  • A transfer of $400 million from the Budget Stabilization Fund. This transfer must eventually be replenished.
  • A transfer of $700 million from the Lawton Chiles Endowment Fund. The transfer will not occur until mid-June 2009. By delaying the transfer as long as possible, the Legislature is attempting to maximize its opportunity to use any other federal bailout funds that might become available.
  • Transfers from trust funds totaling $571 million, including $190 million from the Affordable Housing Trust Fund. Transportation funding was preserved.
  • A reduction in the state workforce, eliminating nearly 1,500 full-time equivalent positions. Most of the eliminated positions are currently vacant.
  • A $10-million “economic gardening” pilot project that will make loans to certain small businesses.
  • Increases in traffic fines.
  • Imposition of a 5.3 percent assessment on nursing home revenue, which, according to proponents, will enable the state to draw down additional federal funding and prevent any cuts to nursing homes.
  • A temporary suspension of the Florida Forever Land Acquisition Program.

Politics: Former Governor Jeb Bush Rules Out a Senate Race in 2010
On January 6, 2009, former Florida Gov. Jeb Bush announced that he would not run for the U.S. Senate in 2010. Late in 2008, incumbent Sen. Mel Martinez announced that he would not seek reelection at the end of his term in 2010. On the Republican side, the primary process has essentially remained frozen since the former governor let it be known that he was considering a Senate run.

Possible Republican candidates now include two former state House Speakers: Marco Rubio (R-West Miami) and Allen Bense (R-Panama City); the sitting state Attorney General, Bill McCollum; and at least two members of Congress: Reps. Vern Buchanan (R-13th Congressional District) and Connie Mack (R-14th Congressional District). Gov. Charlie Crist is widely expected to run for reelection as governor in 2010, but he has not ruled out running in the U.S. Senate race.

Possible Democratic candidates include state Chief Financial Officer Alex Sink, state Sen. Dan Gelber (D-Miami Beach), and at least three members of Congress: Reps. Allen Boyd (D-2nd Congressional District), Kendrick Meek (D-17th Congressional District), and Ron Klein (D-22nd Congressional District).

Insurance: Citizens Mission Review Task Force Supports Limited Rate Increases
The Citizens Property Insurance Corporation Mission Review Task Force was created by law in 2008 to analyze issues regarding the state-created property insurer, with a primary focus on the questions of how and whether the government-sponsored insurer could return to its original role as the insurer of last resort. The task force includes members appointed by the governor, the chief financial officer, the president of the Senate, and the speaker of the House.

On January 6, 2009, the task force issued its first major recommendation, voting unanimously that the Legislature should allow Citizens Property Insurance Corporation (Citizens) rates to increase by a statewide average of up to 10 percent per year, beginning in 2010, with increases in any one rating territory capped at 15 percent per year and increases to any one policyholder capped at 20 percent per year. The rate increases would reduce concerns about the actuarial soundness of Citizens’ rates and could make Citizens less attractive to the consumers who currently view it as a low-cost alternative to better-known insurers.

The task force also discussed, but has yet to act on, proposals that would, to varying degrees, restrict eligibility for Citizens’ policies to consumers who were unable to obtain coverage from other insurers.

Public Affairs News Alert is part of our ongoing commitment to providing up-to-the minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals:

Marnie George
Tallahassee, Florida

Michael P. Harrell
Tallahassee, Florida

Robert H. Hosay
Tallahassee, Florida

Jonathan P. Kilman
Orlando, Florida

Thomas J. Maida
Tallahassee, Florida

Leonard E. Schulte
Tallahassee, Florida

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