State Budget: As Major Initiatives Fall, House and Senate Close in on a Final Budget Agreement
House and Senate budget negotiators worked through the weekend of April 24 – 25, 2010 in an effort to conclude budget negotiations in time for the 2010 regular session of the Florida Legislature to end without needing an extended or special session. By the time weekend negotiations began, unsettled issues had been “bumped up” to the two chambers’ budget chairs, House Full Appropriations Council Chair David Rivera (R-Miami) and Senate Ways and Means Committee Chair JD Alexander (R-Lake Wales).
Appropriations bills must be in final form and on legislators’ desks at least 72 hours before voting on the bills can begin, which means that negotiators must reach agreement on a budget for the 2010 – 2011 fiscal year by Tuesday, April 27, 2010 in order for the session to end on time on Friday, April 30, 2010.
One of the biggest concessions came when House negotiators agreed to drop their dramatic Medicaid reform plan. The House proposal would have placed all Medicaid beneficiaries in some form of managed care over the next five years. The Senate approach to Medicaid was somewhat less ambitious, expanding current Medicaid managed care plans to an additional 250,000 recipients in 19 counties. Other health care issues that were settled over the weekend included a seven-percent reduction in the state reimbursement rate for indigent care provided by hospitals, saving $96 million, a $77-million reduction in payments to nursing homes, and a $39-million reduction in payments to HMOs.
In education, negotiators appeared to agree on maintaining public school per-pupil spending at or near the current level of $6,866 per pupil. The Senate had proposed a $52 increase and the House had proposed a $38 decrease. Negotiators also agreed on plans to restrict eligibility for the Bright Futures scholarship program and to allow state universities to increase student fees.
Senate proposals to break up the Department of Management Services also were part of the budget negotiation process. The Senate plan would have scattered the department’s functions among several agencies and would have given the state chief financial officer authority over procurement. As agreed by Sen. Alexander and Rep. Rivera, the department would not be broken up, but would be controlled by the governor and his cabinet, instead of by a secretary appointed by the governor.
By Monday, April 26, 2010, the two chambers appeared close to resolving state employee pay issues. The House accepted a Senate proposal that would avoid reducing state workers’ salaries, but would, for the first time, require legislators, senior managers, and middle managers to contribute to their health insurance costs. Approximately 27,000 employees who currently receive free health insurance would be required to pay $100 a year for individual coverage or $360 a year for family coverage. State employees also would be required to contribute 0.25 percent of their pay to the Florida Retirement System.
Remaining issues include Senate proposals to provide $11 million in funding for public libraries and $10 million for Everglades restoration.
Politics: Rasmussen and Quinnipiac Polls Show Tightening in Gubernatorial Contest; Rasmussen Poll Gives Marco Rubio the Lead in a Three-Way Senate Race
Two recent polls show some tightening in the 2010 gubernatorial election between the presumptive Republican nominee, Attorney General Bill McCollum, and the Democratic candidate, Chief Financial Officer Alex Sink.
In a survey released on April 19, 2010, the Quinnipiac University Polling Institute found that Mr. McCollum was leading Ms. Sink by 40 percent to 36 percent, with 21 percent undecided. The April results represent a five-percentage point gain for Ms. Sink and a one-percentage point loss for Mr. McCollum.
In polling on the issue of national health care legislation, 48 percent of respondents disapproved of the legislation, 44 percent approved, and eight percent were undecided. However, these results did not translate into approval of Mr. McCollum’s lawsuit to block the legislation. Of the respondents, 54 percent said the lawsuit was a bad idea, 40 percent said it was a good idea, and six percent were undecided.
The Quinnipiac poll surveyed 1,250 registered voters from April 8 – 13, 2010. The poll has a margin of error of 2.8 percentage points.
A poll released by Rasmussen Reports on April 20, 2010 showed a similar trend in the race for governor. The April Rasmussen poll showed Mr. McCollum leading Ms. Sink by 45 percent to 38 percent. A month earlier, the Rasmussen poll showed Mr. McCollum leading by 47 percent to 36 percent.
On April 22, 2010, Rasmussen Reports released a poll on the 2010 U.S. Senate contest, focusing on Governor Charlie Crist’s potential decision to run as an independent. In a three-way race, Rasmussen found that 37 percent of likely voters would vote for the leading Republican candidate, former state House Speaker Marco Rubio (R-Miami), 30 percent would vote for Gov. Crist as an independent, and 22 percent would vote for the Democratic candidate, U.S. Rep. Kendrick Meek (D-17th Congressional District), with 11 percent undecided. A Quinnipiac poll released a week earlier showed Gov. Crist leading in a three-way race. That poll gave Gov. Crist 32 percent, Mr. Rubio 30 percent, and Rep. Meek 24 percent, with 13 percent undecided.
Rasmussen Reports surveyed 500 likely voters on April 15, 2010. The poll has a margin of error of 4.5 percentage points.
Utility Regulation: Senate Committee Fails to Confirm Gov. Crist’s Public Service Commission (PSC) Appointees; House Drops Plans for Dramatic PSC Restructuring
The fate of Gov. Crist’s appointees to the PSC was in doubt after a Senate Ethics and Elections Committee hearing adjourned without taking a vote on the appointments of David Klement and Benjamin “Steve” Stevens. They were appointed in late 2009 and took office in January 2010.
The April 20, 2010 meeting was the last scheduled meeting of the Ethics and Elections Committee for the 2010 legislative session. The appointees were criticized by Ethics and Elections Committee Chair JD Alexander for what the senator described as a populist approach to utility regulation. After the meeting, Sen. Alexander said, “This approach to popularizing regulatory functions is very dangerous for the State of Florida and it’s not something I can stand by and not speak out. I cannot support this populist approach to regulation. It’s destroying our insurance market and I believe it will have a detrimental effect on the Public Service Commission and ultimately to all rate payers if we allow this to continue.”
Senate President Jeff Atwater (R-North Palm Beach) could still bring the nominations before the full Senate.
According to PSC General Counsel Curt Kiser, if the Senate does not confirm the appointees, the PSC Nominating Council would have to seek new applicants for the commission within 30 days after the end of the session. Mr. Klement and Mr. Stevens would be free to reapply if the Senate fails to act on their appointments, but would not be able to reapply if the Senate rejects them.
In a separate action, the House abandoned its plans to restructure the PSC. The House had proposed to place the regulatory staff of the commission in a separate office under the Legislature and to place the public counsel, who represents the public before the PSC, under the attorney general. On April 22, 2010, the House dropped those proposals and adopted ethical reforms substantially similar to the PSC ethical reforms passed by the Senate earlier in the session.
Insurance: Facing a Veto Threat, Proponents of Property Insurance Rate Deregulation Concede Defeat
This year’s version of a proposal for limited deregulation of residential property insurance rates died on April 21, 2010, when the Senate Ways and Means Committee postponed consideration of the bill in its last meeting of the legislative session. The bill, SB 876 by Sen. Mike Bennett (R-Bradenton), and its House companion, HB 447 by Rep. William Proctor (R-St. Augustine), would have allowed residential property insurers to raise rates by up to 10 percent a year without regulatory approval. In 2009, Gov. Crist vetoed a similar bill that would have fully deregulated residential property insurance rates charged by extremely well capitalized insurers.
Sen. Bennett explained that “we just didn’t feel this was the right year” for deregulation. He cited the opposition of Insurance Commissioner Kevin McCarty as a key factor. “Until the governor decides to replace Mr. McCarty … I don’t think we have a chance of any insurance reform,” he said.
After Sen. Bennett declared his bill dead, Gov. Crist defended his threat to veto any bill that raised property insurance rates, saying he was “very happy” his threat had its intended effect. “We need to try to protect the consumers of the state, not allowing those rates to be increased on their backs at this time in this economy.”
Rep. Proctor’s House bill reached the House floor on April 20, 2010, but the House has repeatedly postponed a final vote. House leaders have indicated that they intend to take up SB 2044 by Sen. Garrett Richter (R-Naples), a Senate bill that addresses several property insurance issues, but does not deregulate rates, instead of passing HB 447.
Public Policy 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 these topics further, please contact your Foley attorney or any of the following individuals:
Marnie George
Tallahassee, Florida
850.513.3398
[email protected]
Michael P. Harrell
Tallahassee, Florida
850.513.3373
[email protected]
Robert H. Hosay
Tallahassee, Florida
850.513.3382
[email protected]
Jonathan P. Kilman
Orlando, Florida
407.244.3256
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Thomas J. Maida
Tallahassee, Florida
850.513.3377
[email protected]
Leonard E. Schulte
Tallahassee, Florida
850.513.3380
[email protected]
Marnie George of The George Group assists Foley on a variety of government and public policy matters as a consultant.