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Issue 4: March 17, 2008
Topic 1: Class Size – Light at the End of the Budget Tunnel?
News of the Florida economy continued to darken as revenue estimates predicted lawmakers will have 2.9 billion less than expected. Friday, Governor Crist signed legislation cutting more than $500 million from the current year budget. In total, the decline in the budget is now forecasted to be 4 billion less than last year's 70 billion dollar budget.
How the budget will be cut is the debate that will dominate the remaining six weeks of the 2008 Legislative Session. One idea gaining momentum is to tinker with the requirements of Florida's Class Size Amendment.
The House Committee on 21st Century Competitiveness last week took the first step towards restructuring the Amendment by passing a proposal allowing schools additional time to meet the voter imposed requirements.
In a tight budget year, providing schools the opportunity to delay full implementation of the caps (K – 3rd Grades – 18 students, 4th – 8th Grades –22 students, High School – 25 students) until the 2010-2011 school year could save nearly $90 million in year one.
Bottom Line: Providing more flexibility in implementing the Class Size Amendment is good policy supported by Republicans and Democrats, and will likely receive the support of the Teachers Union and the School Board Association. It is a piece in the difficult puzzle of cutting another 2.9 billion from the 2008-09 Budget.
Topic 2: Take Your Gun to Work?
For the past two years, the National Rifle Association (NRA) has pushed legislation that would allow employees to bring their firearms to work, leaving them in their locked cars in their employer's parking lot. For the past two years, the measure has failed. The proposal has always been difficult for Republicans to tackle with their conflicting loyalties to the NRA and Florida's business community.
Last week, The House Environment and Natural Resources Council gave life to the measure by voting 11-6 in favor of the long debated legislation. The vote was the product of a compromise that limited the gun owners who will be able to bring their gun to work to concealed weapon permit holders.
Bottom Line: Lawmakers may have found the compromise that will allow this measure to pass. With approximately 487,000 concealed weapon permit holders in Florida, the proposed measure would be a significant change to Florida law that impacts not only Second Amendment rights but the rights of employers to govern their workplace.
Topic 3: Managing by Measurement – The New Methodology for Managing Government
Florida joined an increasing number of states using performance measures to set goals and measure outcomes last year when Governor Crist launched www.floridaperforms.com. The new diagnostic tool provides a running scorecard of a broad range of measures reflecting trends in key areas across state government. This past week the Pew Center on the States, Government Performance Project released its annual evaluation of state government performance, stressing management through measurement.
In this year's ranking, Florida scored a B- overall, the same as the national average. That grade was averaged from separate grades on money (B-), people (C-), infrastructure (A-) and information (B-). Human capital was the strongest concern of the review, with the finding that "Florida spends little on its workforce as a whole, ranking last in the nation in per capita spending on state personnel. State training dollars as a percentage of total salary also are among the lowest in the country—0.89 percent. And even though it has pursued ambitious and risky personnel initiatives, Florida has had no real human resources strategic plan."
Bottom Line: Florida is headed in the right direction in using performance data to manage government, but improvements will only be realized if quality personnel are focused on goal attainment. Technology is a unique tool to both measure and achieve outcomes, and will be the key tool for government to solve problems in an increasingly complicated environment.
Topic 4: Insurance Industry Watchdogs
The Senate Select Committee on Property Insurance Accountability proposed sweeping property insurance changes last Thursday.
The recommendations take a hard line against insurance companies proposing increased penalties for insurers who violate state laws and applying state antitrust laws to the industry. In addition, the changes would allow regulators to block rate hikes, bar insurers from using arbitrators if they disagree, prohibit insurers from buying more reinsurance than deemed needed, require insurers to use risk models that are approved by the state when calculating rates, allow regulators to establish guidelines to limit excessive profit margins, and impose a moratorium on insurers dropping policies after a hurricane.
Bottom Line: Property insurance rates along with property taxes are still the two biggest concerns of the Florida electorate. While property insurance rates decreased on average approximately 15 percent last year, the Florida Senate and Governor Crist are serious about holding the insurance industry to the agreement made for meaningful premium reductions in return for cheaper reinsurance subsidized by the state. Pressure is building to lessen Florida’s exposure if additional insurance relief is not realized. Watch for this controversy to heighten as session progresses.
Topic 5: EPA Sets New Standards
The Environmental Protection Agency (EPA) last week announced smog standards aimed at reducing the amount of ozone in the air for 345 of 700 monitored counties across the nation. In Florida, Orlando, Tampa Bay and Panhandle coastal counties would currently violate the new standard of 75 parts per billion.
Counties and states have until 2010 to meet the new standards before the EPA determines violators. Ozone in Florida is not the product of manufacturing, so the new standards should not impact Florida's economy as much as states with a significant manufacturing industry.
Governor Crist's Climate Energy and Economic Development Package allocates $107.5 million for research and development for businesses that reduce greenhouse gas emissions and explore alternative energy opportunities. One opportunity that Florida should consider is the desalination plant currently purifying drinking water on Australia's West Coast. The facility addresses financial and environmental queries typically associated with desalinization projects and provides a unique green solution to the growing national problem of water shortage.
Bottom Line: The new EPA regulations draw national attention to the issue and will magnify the opportunities for renewable and alterative energy research and implementation from which Florida has already begun to profit.
Things to Watch
On Monday, March 17, the full Taxation and Budget Reform Commission will vote on five constitutional proposals relating to property taxes.
Forbes.com recognized Palm Beach County as one of the top ten up-and-coming tech cities, calling Palm Beach a "haven for cutting-edge biotech and life science research," and specifically noting the impact of Scripps.
Supporters of the Central Florida CSX rail project held a rally at the Capitol last week. Orange and Eastern Polk County residents and legislators largely support the rail expansion that would divert freight tracks outside the Orlando metro area in favor of a commuter rail system, while Lakeland officials for the most part oppose the measure.
The Florida Council of 100 opposes the Senate Joint Resolution aimed at reorganizing Florida's higher education system in favor of an elected Commissioner of Education rather than the constitutionally created Board of Governors. The Council expressed concerns that such reorganization would unnecessarily politicize the education system, subjecting the university system to a short-term rather than long-term goal oriented structure.
The Daily Business review reported on mandatory retirement age policies being implemented by law firms. 64 percent of the Am Law 200 firms, the nation's largest, require retirement by age 70.
A panel of the Third District Court of Appeal ruled that prospective buyers who cashed refund checks forfeited their right to sue the developer of a stalled or failing condo project. They noted, "by accepting refunds, prior contract obligations — including the right to sue — were dissolved."
Carbon permit markets allow polluters to buy pollution credits in the open market. Last year more than 60 billion in carbon permits were bought and sold.
