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Issue 16: June 9, 2008
Topic 1: Which Amendments Will Pass?
Quinnipiac University released a poll this week that details current support for two controversial amendments placed on the November ballot by Florida's Taxation and Budget Reform Commission as well as the Marriage Amendment, placed on the ballot by petition.
Amendment 5 - Tax Swap
50 percent of those polled supported the amendment; however, the polling was divided as to a preference towards increasing the sales tax (35 percent agreed) or eliminating some of Florida’s sales tax exemptions (34 percent agreed). Special interest groups, including the realtors on the "yes" side, and business groups on the "no" side, will spend millions of dollars to influence voters.
The amendment would cut an estimated twenty-five percent from property tax bills by eliminating the required local effort, a portion of property taxes currently allocated for education funding. The decrease of an estimated $9 billion in school funding would be balanced out through the legislature imposing at least a one cent sales tax increase, elimination of some of the 246 sales tax exemptions currently found in state law, and most likely further cuts to the state budget.
Amendment 9 - 65 Percent Solution and Vouchers
Over 50 percent opposed providing parents with tax money in the form of school vouchers to help pay for their children to attend private or religious schools; however, when in tandem with the 65 percent solution in Amendment 9, disapproval dropped to 25 percent with approval at 63 percent.
Amendment 9 would re-characterize the requirement for a "uniform efficient, safe secure, and high quality system of free public schools" as a "minimum," and not an exclusive duty of the state, coupled with another initiative to require that 65 percent of all school district funding be spent directly in the classroom. Amendment 9 coupled with Amendment 7, which would remove a provision that currently prohibits state funding for religious institutions, is aimed at overcoming rulings by the Florida Supreme Court that originally struck down Florida's voucher program.
Additionally, 58 percent of those polled support the Marriage Amendment. Seventy-four percent believe that term limits have been good for Florida. Forty-nine percent opposed the new Guns to Work Law, while 55 percent supported the Governor’s decision to hold a climate change summit and lead a European trade mission this summer.
Bottom Line: Polling on the two voucher amendments (seven and nine) indicates that when coupled with the 65 Percent Solution, voters are more likely to support public funding for private school vouchers. The goal of voucher supporters was to pass both amendments in order to thwart opponent's efforts to again successfully challenge the constitutionality of vouchers in court. Even with the passage of both amendments, court challenges are likely.
Topic 2: Hurricane Herb
With the start of the Atlantic Hurricane Season on June 1st, all eyes are on the weather as Floridians cross their fingers and hope for another year without deadly storms.
Last week the Florida State Emergency Response Team gathered at the State Emergency Response Center in Tallahassee to launch "Hurricane Herb," a simulated storm that gives local and state government the opportunity to locate and evaluate strengths and weaknesses in various emergency management plans, before lives and property are actually put at risk.
Hurricane Herb was a Category 3 hurricane that landed near Cedar Key last Sunday and moved across Florida, before heading into Georgia. More than half a million citizens were fictitiously affected by the training storm which caused power outages and flooding across the state. The exercise ran from June 2-5. The Department of Military Affairs and the Florida National Guard were among the numerous state agencies and local governments participating in this year’s exercise.
Preparations for the six-month hurricane season are not isolated to government. In the past two years, Florida Power & Light has invested more than $158 million in upgrades to protect their power lines and transformers. Customers are paying for these upgrades and are still paying for damages incurred during the 2004-2005 Hurricane Season. The state is still paying too. This week risk managers will request the sale of up to $625 million in bonds to help pay claims remaining from the 2005 Hurricane Season.
Bottom Line: Is Florida Ready? The tight budget year eliminated the Hurricane Preparedness Sales Tax Holiday residents and visitors have enjoyed in previous years, but the Division of Emergency Management has continued its marketing campaign that encourages all Floridians to develop a plan for the likely event of a serious storm. If you have not developed your own hurricane plan, the time to do so is now before a hurricane forms in the Atlantic.
Topic 3: Supreme Court Update
As the Daily Business Review noted last week, Florida's Supreme Court has a rough summer ahead wrapping up several high-profile cases prior to the retirement of two of the seven justices. Meanwhile, Governor Crist and Florida's Judicial Nominating Commission face the rigorous task of choosing their replacements.
By July 1, Governor Crist will have likely filled three vacancies on the Judicial Nominating Commission, of which he has already appointed three of the nine total members. Upon filling these vacancies the Governor will begin the 90-120 day process of selecting two new justices to fill the vacancies created by the retirement of Justices Raoul Cantero on September 6th and Justice Kenneth Bell on October 1st.
Florida's Constitution ensures that at least five of the seven Supreme Court Justices hear each case, and requires four justices to deliver a majority opinion. If decisions on several key issues, including the Seminole Gaming Compact, the impact of "false light" in a defamation suit, and voter approval on development projects are not made prior to the departures of Bell and Cantero, the ability to achieve a majority opinion will be all the more difficult.
Bottom Line: The heavy task of choosing justices will not subside after this year, as mandatory retirement at age 70 will soon necessitate the resignations of Justices Harry Lee Anstead and Charles Wells. Governor Crist has the unique opportunity to appoint more than half of the Supreme Court in his first term, but in order for Governor Crist's impact on the court to be long-lasting, the legislature should appropriate better compensation for Supreme Court justices in line with federal appellate court compensation and benefits.
Topic 4: Water Wars
Last week Florida's interests in the ongoing battle for control of the flow of the Apalachicola-Chattahoochee-Flint River System (ACF) took another turn as the United States Fish and Wildlife Service weighed in on a plan that would continue to reduce the flow of water into the Apalachicola River. The Fish and Wildlife Service determined reducing the flow would not significantly impact the area's sensitive ecosystem, a ruling state and federal lawmakers contest.
Florida has been involved in disputes over the flow of water into the Apalachicola Bay since the 1970s. The Apalachicola is the fourth largest river in the southeast, but the largest in Florida, in terms of flow. The river begins where the Chattahoochee and Flint Rivers join at the Florida-Georgia Border. The Army Corps of Engineers operates four Chattahoochee River Dams, the largest of which forms Lake Lanier near Atlanta and holds 60 percent of the water stored in the ACF Basin.
The fishing industry along the Apalachicola Bay relies on nutrients provided by a consistent flow of the river. Alterations and disruption in the river's flow change the salinity of the water, disrupting the sensitive fishing industry that contributes over $200 million per year to Florida's economy.
Bottom Line: State and federal lawmakers from Florida have joined together in a bipartisan fashion to fight this ruling that so greatly impacts Northwest Florida. Continuing to reduce the flow of water into the Apalachicola places an entire region of the state at risk, and poses a great threat to many of Florida's coastal communities who rely on the ecosystem for their livelihood. While it is important to seek a solution from which each party can derive a benefit, Florida leaders will not allow Florida to continue to face injury that results in part from the poor water management planning of her northern neighbor.
Topic 5: Fighting Fraud in Florida
The increasing amount of fraud in the health care industry has resulted in additional efforts by state and federal government officials to crack-down on those who take advantage of the Medicaid and Medicare systems. Medicaid, a health care program for low-income citizens, is funded by both the state and federal government, but administered by the state. Medicare, a health care program for the elderly and disabled, is funded and administered by the federal government.
Last week Florida Attorney General Bill McCollum unveiled a new website aimed at tracking down Florida's most wanted fugitives. In addition to targeting criminals who are under investigation by the Office of Statewide Prosecution and the Attorney General's Crime Unit, the website puts the spotlight on criminals isolated through the Attorney General's Medicaid Control Fraud Unit, a lesser known but important program that recovers million of dollars a year in Medicaid fraud.
United States Attorney General Michael Mukasey visited Florida last week to celebrate the Medicare Fraud Task Force in the Southern District of Florida. The Daily Business Review reported that in the two years since its creation, the task force has prosecuted over $600 million in Medicare fraud. Fraud in the Southern District comprises an estimated twenty percent of Medicare fraud nationwide, and the success of the task force may result in the formation of similar projects in Houston and Los Angeles.
In many fraud cases, defendants create companies and bill the federal government for services not provided for clients who in some cases do not even exist. The Review reports that in 2005 South Florida was home to 72 percent of nationwide charges for patients suffering from HIV/AIDS, when only eight percent of such patients live in South Florida.
Bottom Line: Rampant fraud is extremely damaging to the industry and makes health care expensive for everyone. The continued commitment by state and federal officials to stamp out organized fraud is essential to deliver health care to those who truly need it in a tight budget year.
Question of the Week
How quickly must a homeowners' insurer investigate and pay a claim?
Click here for the answer.
Things to Watch
Dow Drop and Unemployment Numbers
The Dow Jones Industrial Average dropped 396 points on Friday, the result of newly released employment numbers and oil closing at over $138 per barrel. The nation’s unemployment rate rose to 5.5 percent in May, representing 8.55 million employed – 1.55 million of whom have been unemployed for more than 27 weeks, the point at which unemployment benefits expire. The new employment numbers mark the largest monthly increase in 22 years. The New York Times reports t hat the Federal Reserve may begin to raise interest rates in order to avoid further inflation of gas and food prices.
Decline of Insurance Rate Hike Upheld
Two of the 200 companies required to cut rates based on the property insurance reforms passed during last year's special session sought legal resolution to their failed proposals for rate increases. The Florida Farm Bureau, with 80,000 policies lowered rates nearly 25 percent, and then requested an over 30 percent rate increase, which was overruled by an administrative court judge. Last week, Insurance Commissioner Kevin McCarthy affirmed a decision made in arbitration that will deny Hartford's, one of the top-ten largest providers in Florida, request to raise rates nearly 40 percent. Harford currently covers over 90,000 homes.
Alligator Alley
Eight companies have submitted Statements of Qualification to the Florida Department of transportation to lease Alligator Alley, the portion of Interstate 75 that connects Southwest and Southeast Florida. 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 to private companies. Though opposition has surfaced to leasing the toll road, supporters maintain the move will generate hundreds of millions for future transportation projects. Interested vendors will submit proposals in the next few weeks
Obama Before Obama
Click here for a good Washington Post piece on the nation's first African American elected official "The Obama before Obama."
