Florida Government and Politics Weekly Update

State Budget: More Options Are Considered as the Deficit Grows
In a briefing before the Florida Senate on December 10, 2008, Amy Baker, the Director of the Legislature’s Office of Economic & Demographic Research, announced that the current-year deficit in the state budget now stands at $2.29 billion, which represents an increase of $150 million over the deficit as determined by the Consensus Revenue Estimating Conference on November 21, 2008. The increase is the result of a new forecast of 100,000 additional Medicaid clients.

Senate President Jeffrey Atwater (R-North Palm Beach) told the Senate that the size of the deficit makes a special legislative session early in 2009 unavoidable. Budget-balancing options include permanently transferring money from specialized trust funds to the General Revenue Fund, borrowing from the tobacco settlement funds in the Lawton Chiles Endowment, reducing Medicaid payments, reducing prison construction, temporarily furloughing state employees, using the remaining $681-million balance of the Budget Stabilization (“Rainy Day”) Fund, and merging the Florida Department of Health and the Agency for Health Care Administration.

Reduced gaming and lottery revenues could further deepen the deficit. The Department of Business & Professional Regulation reports that, in the period from July 1, 2008 through October 31, 2008, revenues from pari-mutuel wagering were down 17 percent and slot machine revenues were down 13 percent, as compared with the same period in the prior year. The State of Florida Department of the Lottery reports a 7.5 percent decline in sales for the fiscal year to date.

Health Care: “Cover Florida” Program Will Begin Providing Low-Cost Health Insurance in January 2009
On December 10, 2008, Governor Charlie Crist signed contracts with six health insurers to offer low-cost, basic health insurance coverage to adults who do not currently have coverage. Florida is estimated to have 3.7 million uninsured residents, the third-highest number in the nation.

Under the Cover Florida program, two insurers, Blue Cross Blue Shield of Florida, Inc. and UnitedHealthcare, will offer policies statewide, and four other insurers will offer coverage on a regional basis. The program includes both basic policies covering office visits, screenings, emergency room care, and prescription drugs, with a monthly premium averaging less than $155, and more comprehensive plans that include limited hospitalization coverage for a higher premium. Consumers with preexisting conditions are eligible for coverage, but the plans include a one-year delay for coverage of preexisting conditions.

According to a spokesman for the governor’s office, a Cover Florida policy can save the consumer 50 percent or more as compared with a typical health insurance policy, but the coverage under the state plans is more limited. Participating insurers will begin taking applications on January 5, 2009.

Judiciary: Governor Crist Rejects Slate of Florida Supreme Court Nominees
The Florida Supreme Court Judicial Nominating Commission (Commission) submitted a slate of five nominees for the vacancy created by the retirement of Justice Harry Lee Anstead to Mr. Crist on December 8, 2008. Two days later, Mr. Crist appointed one of the nominees, Judge Jorge Labarga of the 15^th Judicial Circuit, to the Florida Fourth District Court of Appeal and requested that the Commission submit additional names for the Supreme Court vacancy in order to increase the diversity of the pool of nominees. In addition to Mr. Labarga, the Commission had nominated Florida Fifth District Court of Appeal Judge C. Alan Lawson and circuit judges Kevin Emas, Gill Freeman, and Waddell Wallace III.

The Commission had scheduled a December 14, 2008 conference call to discuss the governor’s request, but that meeting has now been rescheduled for December 17, 2008.

Environment: United States Sugar Corporation Board Approves Land Sale to State Amid Growing Opposition
On December 8, 2008, the board of directors of the United States Sugar Corporation (U.S. Sugar) approved the agreement to sell more than 180,000 acres of U.S. Sugar land to the South Florida Water Management District for $1.34 billion. The agreement also requires the approval of the governing board of the water management district by December 16, 2008, and is contingent on the district obtaining financing for the purchase. A bond validation hearing is scheduled for February 6, 2009.

The U.S. Sugar land sale is opposed by another sugar producer, Florida Crystals Corporation, and by the Miccosukee Indian Tribe. Two subsidiaries of Florida Crystals have filed a motion in Palm Beach County Circuit Court in opposition to the water management district’s bond issue.

Legislative opposition also has emerged recently. On December 10, 2008, the Miami-Dade County delegation to the Legislature adopted a resolution urging the water management district’s governing board to postpone action until the Legislature has had the opportunity to scrutinize the deal. On December 10, 2008, Sen. Michael “Mike” S. Bennett (R-Bradenton), who chairs the Senate Community Affairs Committee, also wrote to Mr. Crist urging that the vote on the land purchase be delayed until his committee has had the opportunity to hold hearings on the matter.

The governing board of the water management district has scheduled a two-day meeting for December 15 – 16, 2008 to discuss and vote on the U.S. Sugar contract.

Taxation: Governor and Cabinet Adopt Emergency Rule Addressing Corporate Income Tax Glitch
Acting as the head of the Florida Department of Revenue, the governor and cabinet adopted Emergency Rule 12CER08-31 on December 9, 2008 to correct an unintended consequence of tax legislation enacted earlier in the year. Chapter 2008-206, Laws of Florida, was intended to ensure that the accelerated depreciation provisions of the federal Economic Stimulus Act of 2008 had no impact on Florida corporate income tax revenues. As described in a November 18, 2008 letter from the presiding officers of the Legislature, the Florida act was intended to permit corporate taxpayers to retain the same depreciation and expensing deductions in 2008 that taxpayers had used under the 2007 version of the Internal Revenue Code and for any remaining business deductions in subsequent years. The Florida act apparently did away with the deductions for subsequent years.

Based on a commitment from the legislative leaders to clarify the original intent of the 2008 law no later than the 2009 regular legislative session, the emergency rule, in effect, nullifies the unintended consequences and adopts the leaders’ stated intent of the 2008 law.

Public Opinion: The Economy Becomes the Most Important Issue Facing Floridians, While Government Performance Ratings Decline
In surveys conducted for Leadership Florida, Mason-Dixon Polling & Research, Inc. found that the economy/jobs was by far the top concern of Floridians. The issue was listed as the top concern by 56 percent of the survey, up from seven percent in 2007. Health care and taxes/government spending tied for the second-most important issue, with eight percent each.

The survey also showed declining approval ratings for government at all levels. Twenty percent of respondents gave the federal government a positive rating, down from 25 percent in 2007. State government received a 30-percent positive rating, down from 35 percent in 2007. The most dramatic change involved school boards, which had a 26-percent positive rating in 2008, as compared with a 37-percent positive rating in 2007.

The telephone poll of 1,200 adults was conducted from November 17, 2008 through November 23, 2008.

Legislature: Florida House Announces Council and Committee Appointments
On December 9, 2008, House of Representatives Speaker Ray Sansom (R-Fort Walton Beach) appointed the members and chairs of House councils and committees. In the House committee structure, councils oversee the work of standing committees and take final action on bills before they reach the House floor. The chairs of the House councils are:

• Criminal & Civil Justice Policy: Rep. Julio Robaina (R-Miami)
• Economic Development & Community Affairs Policy: Rep. Dave Murzin (R-Pensacola)
• Education Policy: Rep. Faye B. Culp (R-Tampa)
• Finance and Tax: Rep. Dean Cannon (R-Winter Park)
• Full Appropriations Council on Education & Economic Development: Rep. David Rivera (R-Miami)
• Full Appropriations Council on General Government & Health Care: Rep. Marcelo Llorente ( R-Miami)
• General Government Policy: Rep. Baxter G. Troutman (R-Winter Haven)
• Health & Family Services Policy: Rep. Ed Homan (R-Temple Terrace)
• Policy & Budget: Rep. Ellyn Setnor Bogdanoff (R-Fort Lauderdale)
• Rules & Calendar: Rep. Bill Galvano (R-Bradenton)

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