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Issue 2: March 3, 2008
Issue 2: March 3, 2008
The 2008 Legislative Session begins Tuesday, March 4, 2008. Governor Crist’s annual State of the State Address will air at live at 6:00 p.m. - Check your local listings. As discussed in last week’s LeMieux Report, legislators will move to cut more than $500 million from the current year budget in the opening days of the session.
Topic 1: Tax Reform Trade Off
The Finance and Taxation Committee of the Taxation and Budget Reform Commission (TBRC) met this past week in Tallahassee and voted to put an additional property tax measure on the November ballot. The proposal would cut an estimated 25 percent from property tax bills by eliminating the required local effort, a portion of property taxes currently allocated for local school funding. To balance out the 8 billion dollar tax cut, the state sales tax would be increased by one cent, and state law makers would be required to eliminate some of the 246 sales tax exemptions currently found in state law, and most likely further cut the budget. This proposal must now be approved by the full board of the TBRC.
The TBRC is a powerful 25 member commission, provided for in the State Constitution, and convened every 20 years to examine Florida's revenue needs and tax structure. The commission makes recommendations to the governor and legislature, but also holds the authority to place constitutional amendments on the ballot. The TBRC is also considering proposals for Florida to join an interstate agreement to collect taxes on Internet and mail order purchases, which could mean up to 2 billion dollars in additional revenues - and taxes.
Bottom Line: The TBRC will submit its final recommendations in June 2008, but look for a final vote on this tax swap proposal within the next few weeks. If 17 of 25 voting members favor the trade off, voters - for the second time in 2008 - will have a chance to fundamentally change Florida's tax structure.
Topic 2: Infrastructure Improvements - All we need is money
The Tampa Tribune reported that Florida “plans to delay more than $500 million worth of transportation projects from the DOT's five-year work plan,” this after the Federal Department of Transportation project list excluded Florida projects including a $491 million CSX rail expansion aimed at establishing an efficient commuter system, while circumventing freight travel around the Orlando Metro Area.
Reprioritizing investment in America’s infrastructure, most notably transportation funding, was a much discussed topic at the National Governor’s Association Winter Meeting. Due to Florida’s vested interest in the matter, Governor Crist joined the bipartisan “Building America’s Future” coalition to call for enhanced federal investments in public works projects.
The inability to secure financing for infrastructure presented by the current credit market, coupled with President Bush’s resistance to include infrastructure projects in the most recently proposed economic stimulus package, increased debate on funding options for state projects. Some proposed a more than 40 cent gas tax increase to fill the void.
Bottom Line: Raising the gas tax is politically untenable. Public Private Partnerships (P3s), like the Miami port tunnel and the I-595 expansion, demonstrate that states will have to embrace P3s in order to embark upon significant infrastructure improvements.
Topic 3: A Unified Business Lobby?
The Florida Chamber of Commerce, Associated Industries of Florida and the Council of 100 have come together to support a unified legislative agenda for the 2008 Legislative Session.
A once combative business lobby has called a ceasefire, spurred by new leadership who realize that business is better served with a united effort. The Tallahassee Democrat reported that reducing property taxes and insurance premiums, minimizing frivolous lawsuits and shoring up Florida’s Hurricane Catastrophe Fund are the “big three” issues the groups will tackle.
This session look for a continued increase in similar partnerships as Florida’s economy and budget constraints necessitate a team approach.
Bottom Line: Partnering among business advocacy groups is smart and good for the business community. Credit is due to the new leadership for putting rivalries aside in the best interest of their constituent members.
Topic 4: The Future is Nuclear
A brief power outage blanketed parts of Central and South Florida earlier this week. Florida Power & Light reacted quickly and power was restored within a few hours for most customers. During the outage, two nuclear reactors were taken offline. The aftermath and investigation into the malfunction that caused the outage, now thought to be human error, brings to light the broader debate over Florida's energy policy and the strengthening of Florida's energy infrastructure.
At the National Governor's Association winter meeting, governors agreed that nuclear energy needs to be part of a comprehensive solution to energy challenges facing the United States. For his part, Senator McCain, speaking to an assembled group of governors, endorsed an increased use of nuclear power and a shortening of the permitting process.
Bottom Line: As government and business increasingly make alternative and renewable energy a priority, nuclear power will play a big role in solving Florida and America's need for clean, renewable energy and will provide America a modicum of energy independence.
Topic 5: Certificate of Need Reform
The Certificate of Need (CON) process is a state regulatory process credited by its supporters with creating efficiency in the health care system by preventing the duplication of services within a geographic area. Currently hospitals must apply to state government for a CON prior to expanding certain facilities and services.
Advocates of CON reform, including Governor Charlie Crist, note that a change in the current process would develop a market-based business climate, increase competition and expand access to care. The Governor’s proposed legislation removes the CON process for certain hospitals, primarily those associated with emergency and therefore often charity care. Opponents of the proposal argue that the absence of regulation will undermine indigent care as hospitals seek to focus services on the more affluent clientele.
Bottom Line: The health care lobby is fully mobilized to block the proposal. With 14 others states including Texas having abandoned the CON requirement, will Florida make the change?
Question of the Week
“The Orlando Sentinel reports this week that, as part of the federal economic stimulus package, over 8.3 million Floridians will receive rebate checks, fusing more than $7 billion into Florida’s economy. Do I qualify for a tax rebate? If so, how much should I expect to receive?”
Click here for the answer...
Things to Watch
Florida’s Agency for Workforce Innovation will release unemployment numbers for January this Friday, March 7, 2008.
Florida House Speaker Marco Rubio recently announced his 2008 Legislative Priorities.
The next round in the tri-state water wars, between Alabama, Florida and Georgia, could be on the horizon. While Florida and Alabama have come to the table willing to compromise, observers close to the process feel Georgia will never make a deal.
The fourth and last Broward pari-mutuel, the former Dania Jai-Alai, decided against going forward with casino gambling due to the performance of the three other "racinos" in Broward, as well as the Seminole Tribe’s gambling expansion in the same geographic area.
Reminder...
Monday is the final day for Floridians who purchased a new home in 2007 to file for the Save our Homes Portability tax break now available, following the passage of Amendment 1. The paperwork should be filed with your local property appraiser.
