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Issue 9: April 21, 2008
Topic 1: Health Care Legislation Moves Forward
Last week both chambers of the Florida Legislature approved separate proposals to expand access to affordable health care through the Cover Florida Health Access Program championed by Governor Crist.
On Wednesday, the Florida Senate unanimously passed the legislation which creates a state program for companies to compete to provide health insurance to Florida's uninsured population, roughly 20 percent of the state's nearly 18 million citizens. Policies under the Cover Florida initiative would run at around $150 per month with a focus on primary and preventative care.
The Florida House passed the proposal strictly along party lines, but under the House version of the legislation, companies could offer policies that require less coverage than those competing to insure through the Cover Florida Plan. The Governor opposes this facet of the House version, voicing concerns over consumer protection. The House and Senate must pass an identical version of the bill prior to the end of session, if the legislation is to come before the Governor this year.
In other health care news, Wal-Mart passed a milestone for its $4 prescription program. The program, first launched in September 2006, has resulted in $1 billion savings across the country with more than $40 million in savings for Floridians. The program covers the most commonly treated medical conditions and represents 40 percent of all prescriptions filled at Wal-Mart, with 30 percent of the $4 prescriptions filled for consumers without health insurance.
Bottom Line: The Cover Florida Program drives insurance costs down for Floridians by reducing regulations on the private sector, which in turn makes health insurance more affordable. The program is based on a free market framework with no mandates for individuals to carry health insurance or for employers to participate. The success of reduced prescriptions programs, like those at Wal-Mart and more recently Publix Supermarkets, emphasize the ripeness of the market for programs that expand access to health care through competition. With budget pressures reducing the amount of money available for health care, state leaders should jump at the chance to pass health insurance reform that costs the state nothing.
Topic 2: Session Standoff
Progress in the 2008 Legislative Session came to a screeching halt on Friday when Democrat lawmakers invoked a procedural maneuver requiring all bills slated to come before the House Chamber to be read in full. In total, 398 pages were read over 14 hours in a session that dragged well into Saturday morning.
What are the implications of the standoff? So far this session, both chambers have passed separate legislation for the 2008-2009 Budget. Wednesday, the Florida House and Senate announced their budget conferees and this week delegations from each chamber will meet to create a new draft in order to send identical bills to their respective chambers for a full vote. Passing a budget is the only constitutional obligation of the Florida Legislature.
With only two weeks left in the 2008 Legislative Session, members had hoped to finish budget talks by mid-week. If relations between House Republicans and House Democrats continue to sour, passing the budget, let alone any other legislation, could be painstaking.
Bottom Line: Time spent reading lengthy bills aloud is clearly time that could be better spent taking up legislation to improve the lives of Floridians. With only two weeks to go, legislators, many of whom are up for reelection this year, need to put some wins on the board in an otherwise bleak year.
Topic 3: TABOR – One Step Forward, Two Steps Back
The proposed constitutional amendment deemed "The Taxpayer's Bill of Rights" (TABOR), needs approval by either the Florida Legislature, or 17 of 25 members of Florida’s Taxation and Budget Reform Commission (TBRC) to gain access to the 2008 General Election Ballot.
Last week, the TBRC voted 15-9 against their highly debated version of the proposal. The TBRC's version of the proposal at one point called for a voter referendum for new taxes, then revenue caps on state and local government, and finally the defeated version required a two-thirds vote by elected officials for a tax increase.
Meanwhile in the Florida House, the Policy and Budget Council passed its version of the amendment, a limit on growth in government revenue at both the local and state levels to a formula that calculates inflation and population growth plus one percent. House proponents noted that the legislation could save taxpayers $6 billion per year.
The Senate has yet to take up the measure, and the outlook for TABOR is not hopeful as Senator Mike Haridopolos, Chairman of the Senate Finance and Tax Committee, has stated he does not plan to move the measure this session.
The TABOR proposal is scheduled to come before the full chamber of the Florida House this week. The TBRC will also hold meetings this week in Tallahassee and on Friday will take a vote on final passage of each constitutional proposal in the order of proposed appearance on the 2008 General Election Ballot. Before their work is finished, the Commission will also submit a final report to the Governor and Legislature that will contain further recommendations for reform measures that can be implemented through means other than constitutional amendment.
Bottom Line: Revenue and tax caps on local government appear to be dead. Watch to see whether the TBRC reverses its vote on a previously approved tax swap that would eliminate school taxes from property tax bills, but require a one cent sales tax increase as well as the repeal of sales tax exemptions and the likelihood of billions more in budget cuts.
Topic 4: Foreclosure Data – It Depends on Who You Ask
As foreclosure rates in the struggling real estate market gain more and more media attention, doubt has been cast on the manner in which data is reported to reflect trends in the market as well as the process by which companies analyze foreclosure data.
The Daily Business Review questioned foreclosure figures noting that the "foreclosure rate" as tabulated by some reporting entities includes both foreclosed upon homes as well as homes in the pre-foreclosure process. Three companies are known to compile foreclosure data and track foreclosure trends, and each company has its own way of gathering information and defining foreclosures.
In order to foreclose on a property, the mortgage holder must complete a multi-step process including the issuance of a lis pendens – a notice that a foreclosure lawsuit is pending, a court proceeding to order the property foreclosed upon, and finally the auction of the property.
One of three widely watched tracking agencies, Forclosures.com, tracks properties through each phase and reported the foreclosure of 284 properties in Miami-Dade in March. By contrast, RealtyTrac, a company that earlier this year reported Florida as one of the top states for home foreclosure, identifies a home as a foreclosure even when the process has not been completed and reported 4,673 foreclosures in Miami-Dade for the same period.
Bottom Line: Disparities in data analysis make it difficult to determine whether Florida is bouncing off the bottom of the real estate downturn or whether the market will continue to decline. Last week, Governor Crist accepted the final recommendations from the Florida's Home Ownership Promotes the Economy (HOPE) Task Force including establishing the Home Ownership Preservation Center, requiring mortgage lenders to disclose when borrowers may qualify for a mortgage other than subprime, high-cost or non-traditional loans, and creating the HOPE Council and Mortgage Fraud Task Force to provide continued guidance on legislation, regulation, education and foreclosure prevention efforts. These are good measures which if implemented will help bring relief during this real estate m arket decline, and the next one.
Topic 5: If You Can't Beat Them, Join Them
Earlier this session, the LeMieux Report noted the Florida Department of Transportation's (DOT) proposal to lease parts of Alligator Alley, the portion of Interstate 75 that connects Southwest and Southeast Florida, to private companies – a move that could generate hundreds of millions dollars for future transportation projects.
The proposal was initially floated last year with the passage of transportation legislation that allows the state to enter into public private partnerships to lease portions of existing toll roads. Senate Republican leader Daniel Webster added a new dimension to the idea last week, proposing that Florida lease Alligator Alley to itself through the Lawton Chiles Endowment, a $2.3 billion fund generated from the tobacco settlement.
The Chiles Endowment was established by Governor Bush in memory of former Florida Governor Lawton Chiles. While the investment and interest income of the fund are spent on programs for Florida's children and elderly, the principle is untapped. With the falling stock market, the fund lost value last year. Webster's proposal would take $500 million from the endowment to fund transportation projects with a guaranteed return on the investment being paid back to the endowment. Proponents of the proposal see the lease as a way to secure a guaranteed return on investment, while at the same time funding greatly needed transportation projects in the near term.
Bottom Line: With federal transportation funding declining over time, innovative strategies will be required. The idea to lease Alligator Alley to the Chiles Endowment requires further comprehensive analysis, but the overarching principle – investing Florida's money in Florida's infrastructure – should be strongly considered.
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Things to Watch
Workforce Transition
Florida will join 32 other states currently participating in the American Diploma Project Network, a coalition designed to prepare students for transition to the 21st century workforce.
The project is a joint effort by government and the business community to raise academic standards, and close the gap between high school and college, or other career preparations, and successful integration into the workforce.
Law Firm Associate Programs
The Wall Street Journal noted the economy is impacting associate programs in several of the nation's largest law firms. Ways of handling the downturn vary, but the most common are a reduction of summer positions or staggering the start dates of first-year lawyers.
Looking for Love?
The Wall Street Journal chronicles the ups and downs of office romance – political style, in a light-hearted look at life and love on the presidential campaign trail.
CSX Follow-Up
By the close of the 2008 Legislative Session, Central Florida residents will hear the long awaited outcome of the proposal to divert freight traffic from the Orlando Metro Area towards Polk County in favor of a commuter rail.
Movement on the CSX project would require the state to spend $649 million in construction costs as the project did not make the cut for federal transportation funding this year. But first, the state must assume liability for all accidents related to the construction of the rail.
The proposal was passed through the House council earlier this year, but has not been reviewed by the Senate. The success of the proposal will impact the viability of future mass transit projects.
Take Your Gun To Work Now Law
As expected, Governor Crist signed the Take Your Gun to Work Bill, legislation that prevents employers from creating regulations to would prohibit employees with concealed weapons permits from keeping a firearm in a locked vehicle on their employers property.
The Florida Chamber of Commerce and the Florida Retail Federation are preparing to fight the new law in court.
