Florida Government and Politics Weekly Update

Economy: Governor Crist Considering Moratorium on Home Mortgage Foreclosures
On November 24, 2008, Governor Charlie Crist announced that he was considering the imposition of a temporary moratorium on home mortgage foreclosures during the holiday season, apparently through the use of his emergency powers. Governor Crist said, “I think it would be a good thing to be able to do. We want to stop the foreclosures, especially during the holidays.”

One day later, after meeting with representatives of the Florida Bankers Association, the governor announced that his preferred response to the large number of distressed mortgages would be voluntary action by mortgage lenders, rather than an executive order. After meeting with the governor, Florida Bankers Association President Alex Sanchez said that he did not expect a formal moratorium on foreclosures. Mr. Sanchez stated that the governor and the banking industry would soon announce a commitment by lenders to renegotiate payment terms with homeowners who are in or near default, and that any relief would probably be limited to owner-occupied primary residences.

Environment: United States Sugar Corporation Land Purchase Finalized
On November 25, 2008, the South Florida Water Management District (SFWMD) announced that it had reached an agreement with United States Sugar Corporation (U.S. Sugar) under which the SFWMD will acquire more than 180,000 acres of U.S. Sugar land located south of Lake Okeechobee. The deal requires the approval of the SFWMD governing board and the U.S. Sugar board of directors. In a statement announcing the agreement, the SFWMD stated, “This historic transaction would provide water managers with the unprecedented opportunity to store and treat water on a scale never before envisioned for the benefit of America’s Everglades, Lake Okeechobee and the St. Lucie and Caloosahatchee rivers and estuaries.”

U.S. Sugar will have the option to continue agricultural operations on the land for seven years, at a lease rate of $50 per acre for the first six years, and will be required to pay taxes and control pollution on the leased land. The company will retain ownership of, and may continue to operate, U.S. Sugar’s major assets, which include a sugar mill, refinery, citrus processing plant, and railroad. U.S. Sugar will be responsible for environmental cleanup to meet commercial standards, while the SFWMD will be responsible for any further remediation needed to meet the standards applicable to an environmental restoration project. The first 10,000 acres could be released to the SFWMD at any time after the end of the first year of the agreement. An additional 30,000 acres could be released to the district at any time after December 15, 2015.

The agreement specifies a purchase price of $1.34 billion. The SFWMD plans to issue certificates of participation to finance the transaction. Subject to approval by the U.S. Sugar and SFWMD boards, and subject to financing, the transaction will close in 2009.

State Budget: Cigarette Tax Increase May Be “on the Table”
Amid the growing likelihood of a special legislative session in January or February 2009 to address the state’s growing budget deficit, some lawmakers are considering a possible 50-cent or $1-per-pack increase in Florida’s cigarette tax. Florida last increased the cigarette tax in 1990. Only four states have a lower cigarette tax rate than Florida’s current 34-cent-per-pack rate.

Sen. Dennis Jones (R-Treasure Island) said on November 24, 2008 that he could support a 50-cent-per-pack increase. Sen. Jones was quoted as saying, “I’d probably be okay with that, personally. I am not for continuing to cut the budget. We need more revenue.” When questioned recently about budget cuts and tax increases, Senate President Jeffrey Atwater (R-North Palm Beach) said, “Everything is on the table.”

In the Florida House of Representatives, Rep. James W. “Jim” Waldman (D-Coconut Creek) has filed a bill (HB 11) that would raise the per-pack tax by $1. House Republican leaders appear skeptical about any tax increase. Rep. Dean Cannon (R-Winter Park) responded to questions about the proposal by stating that raising taxes is “a particularly dangerous thing to do when you are in an economic recession and you’re trying to get the economy moving again. It’s definitely a tax increase, but it’s our duty to examine it.” Rep. Ellyn Setnor Bogdanoff (R-Fort Lauderdale) said, “Raising taxes in any fashion is not part of an economic stimulus package.”

Governor Crist commented on the proposed tax increase by saying that a tax increase is “something I’m not warm and fuzzy about.” When further questioned on the subject of tax increases and budget cuts, Governor Crist said, “I don’t want to be dogmatic on anything. I understand we’re in challenging times. But I am still convinced, because of some creative ideas, that there can be ways to balance [the budget].”

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