TALLAHASSEE — Property taxes, government spending, health care, the environment and the economy will intermingle during a 2010 legislative session, the results of which could have a particularly significant effect on Southwest Florida.
As lawmakers convene Tuesday to begin the scheduled 60-day session, a number of issues already have lined up for debate as committees of both chambers met throughout the past several months.
With the state facing a $3.2 billion budget gap, the elephant in the room again will be the budget. The task is made more difficult as budget builders will be able to rely less on federal stimulus dollars that buoyed last year’s spending plan and allowed the Legislature to avoid the painful cuts to health care and education.
The budget crunch is expected to affect other locally popular programs. Funding for Everglades restoration and the Florida Forever land-buying program again are in the crosshairs as lawmakers divvy up a fiscal pie that will have to feed more with less.
The tight fiscal situation is going to put pressure on lawmakers to reconsider a gambling compact that so far has eluded legislative leaders, the governor and the Seminole Tribe of Florida. The tight budget also has prompted proponents of offshore oil drilling to again call for an end to a two-decade moratorium on drilling within 10 miles of the Florida Gulf Coast.
“Budget issues are going to drive just about everything, again,” said Sen. Garrett Richter, R-Naples. “Economic issues are going to dominate everything.”
Health-care costs are the single most-significant expenditures in the state’s general revenue budget. Fueled by higher costs for the state’s share of Medicaid, budget builders must come up with nearly $2 billion more to pay for programs the state already funds.
Coupled with that is uncertainty over whether the federal government will continue to pay a higher percentage of the bill. Part of the federal stimulus package last year, the increased federal commitment was $1.2 billion.
Originally part of the federal jobs bill, the issue has been cut away from that jobs package and must stand on its own. The outcome, and how quickly it is resolved in Washington, will have a huge effect on budget discussions in Tallahassee.
“When 28 cents of every dollar is being spent on health care, it is going to be impossible to deal with the budget without addressing that issue,” said Rep. Matt Hudson, R-Naples.
Tax cuts, sales tax holidays and corporate incentives are on the block as legislative leaders and the governor try to use state and federal resources to jump-start Florida’s sputtering economy.
Lawmakers are expected Tuesday to take up a measure to postpone an unemployment tax increase slated to go into effect April 1. The proposal would have raised taxes to cover unemployment compensation payments resulting from an 11.8 percent jobless rate.
Likewise, legislators are slated to approve a sales tax holiday for back-to-school supplies, a move supported by retailers who say the tax break has residual effects. On the corporate tax front, lawmakers are considering a change in corporate income tax that would simplify the state’s tax structure.
Meanwhile, Rep. Tom Grady, R-Naples, has sponsored a measure to increase requirements in the Florida Retirement System to shore up and modernize the state’s pension fund by upping the retirement age from 62 to 65 and increasing the number of years an employee needs to work to fully qualify.
Last year, budget constraints temporarily clipped the wings of Florida Forever.
This year, gubernatorial candidates Chief Financial Officer Alex Sink, a Democrat, and Attorney General Bill McCollum, a Republican, have joined to ask lawmakers to restore the $15 million that would allow the state to sell $300 million in bonds. Gov. Charlie Crist has asked for money to provide $50 million in bond revenue.
Backers are hoping to maintain funding for Everglades restoration, especially projects that affect northern regions, including the Caloosahatachee River. Crist has proposed spending $50 million in restoration efforts.
The governor also has called for continued work on renewable energy programs. An expansive Senate proposal last year fell victim to debate over offshore oil. Backers have again called on the state to set aggressive targets for renewable energy sources.
Crist’s budget request includes more than $150 million in state and federal money to further those efforts.
The decision on whether to allow drilling in state waters was reignited two years ago when gas prices hit $4 a gallon. Gulf waters within 10.3 miles of shore are now considered by drilling advocates as in the state’s financial and security interests.
A proposal last year to allow the governor and Cabinet to approve such permits passed the House but stalled in the Senate. Since then, House members have been meeting on the issue and plan to spend much of session’s first week on it.
“I’m the only legislator that has a producing oil well in my district,” said Hudson, a member of the House committee. “I think it can be done safely and is something the state should pursue.”
Senate President Jeff Atwater, R-North Palm Beach, has been less enthusiastic. Last year, he asked the Century Commission for a Sustainable Florida to weigh in. The group, made up of members appointed by Atwater and the governor, last week issued a draft report that said extracting oil in state waters would neither significantly lower gas prices nor decrease U.S. demand on foreign oil. It could, however, provide the state with millions of dollars in tax revenue.
“I don’t’ think there is as much interest in moving quickly in the Senate,” said Sen. Dave Aronberg, D-Greenacres, whose cross-state district includes south Lee County. “President Atwater has made it pretty clear he wants a deliberative process.”
A major issue last session, property insurance again will play a prominent role. Proposals have again been filed to allow insurance companies to set rates without needing approval of the Office of Insurance Regulation.
Limited last year to State Farm and Florida’s large insurers, measures proposed this year would expand the group of companies that are eligible to set rates based on market forces and are out from under the agency’s thumb.
Another hurricane insurance issue is expected to be targeted as lawmakers respond to a deluge of insurance claims still flooding in from 2005, a rush some blame on lenient state laws, a sour economy and the use of public adjusters whose paychecks are linked to the amount of money their clients receive.
Look for legislation to bolster requirement for public adjusters and reduce the amount of time that policyholders have to file claims.
The governor’s 2001-11 budget is fueled in part by $150 million a year from a compact with the Seminole Tribe of Florida. The tribe, which operates seven casinos in Florida, including one in Immokalee, has been working with Crist during the past several years on an agreement that would give the tribe exclusive rights to high-stakes games while providing the state with a cut of the profits.
House lawmakers in particular haven’t been satisfied with the deals reached between Crist and the Tribe. Likewise, Seminole leaders rejected a plan crafted by House lawmakers. Pari-mutuels, meanwhile, are asking for concessions they say they need to compete with Indian casinos.