4/15/11
Source: FCFEP Tax and Budget News www.fcfep.org
Scott, Legislature Reverse Cuts for Disabled Programs
Orlando Sentinel:
Governor Rick Scott announced late Thursday that he has worked out a deal with lawmakers to reverse some of the deep budgetcuts he ordered two weeks ago to the state agency that helps the developmentally disabled.
Though the timing and details of the plan were not immediately clear, caretakers for those with disabilities said they were hopeful.
“Certainly it’s a better day today than it was yesterday,” said Craig Cook, executive director of Orlando-based Attain Inc., which runs group homes and support programs. “I would say I’m cautiously optimistic. There are still a lot of unknowns.”
Scott had ordered the cuts to caregiver rates March 31 and made them effective April 1, stunning providers, their disabled clients and their families. Provider reimbursement rates through the state’s Agency for Persons with Disabilities dropped 15 to 40 percent overnight, and many nonprofit organizations that serve those with disabilities began cutting their staff, salaries and benefits.
Some nonprofits said that unless the funds were restored, they would be forced to close their doors.
Scott defended the move, saying it was necessary to prevent the state Agency for Persons with Disabilities from running out of money completely in mid-May, several weeks before the fiscal year ends June 30.
Thursday’s announcement said Florida legislators had come up with an infusion of $30 million to keep services going, although how much of the previous cuts would be restored is unclear. The Florida Inspector General had projected a shortfall of $174 million had the governor not intervened.
Protests against the governor for the cuts had been heated.
“I thank Senate President Mike Haridopolos and House Speaker Dean Cannon for joining me to protect the community APD serves, and I applaud the hard work of the staff at APD for finding a solution to this problem,” the governor said in his announcement. “After years of deficit spending that put these services at risk, I’m glad that we’re taking steps to finally bring responsible financial management to this agency and the people they serve.”
The agency annually serves about 35,000 Floridians with such developmental disabilities as mental retardation, autism, cerebra palsy and spina bifida. Another 18,000 residents remain on a waiting list for services aimed at keeping them out of institutions – a setting that would be considerably more expensive for taxpayers.
Haridopolos said the funds are “critical in assisting some of the neediest residents of our state,” although he defended the governor’s initial decision to order the cuts.
“The agency significantly overspent its allocated budget,” he said in a statement issued Thursday evening.
Critics say legislators have never allotted enough money for the agency to serve everyone who needs it. Florida ranks in the bottom 5 percent of states in per-capita funding for those with developmental disabilities.(Read the story.)
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Senate Slams Lid on Medicaid Funding
Health News Florida:
The Senate Budget Committee approved a massive Medicaid overhaul Thursday that would try to slam the brakes on health-care spending.
The bill includes a controversial proposal that would cap the amount of money the state spends each year on Medicaid and force mid-year cuts if costs go up. The proposal could be a key issue as House and Senate negotiators work out differences in the coming weeks.
Senate Health and Human Services Appropriations Chairman Joe Negron, R-Stuart, has made the cap a priority and says it would offer “budget predictability.” In recent years, the state has faced steadily increasing costs as the bad economy has pushed more people into Medicaid.
“We as a legislature will decide, ‘This is how much we’re going to spend on Medicaid,’ ” Negron said before the Senate Budget Committee voted 17-4 to approve the overhaul bill and send it to the full Senate.
But critics of the Senate bill fear the cap could force dramatic cuts in services. Karen Woodall, a lobbyist for the left-leaning Florida Center for Fiscal and Economic Policy, told the committee that such a cap could have forced about $1.6 billion in spending cuts this year.
Under the bill, lawmakers would approve a set amount of money for Medicaid each year. If costs exceed that amount, the bill includes a pecking order of expenses to cut, starting with administrative costs but also going down into services and provider rates.
“Issues like the hard caps distress me,” said Senate Minority Leader Nan Rich, a Weston Democrat who voted against the overhaul, SB 1972.
The caps are one piece of a sweeping bill that eventually would force most Medicaid beneficiaries into managed-care plans. The full Senate likely will vote on the bill after Easter, while the House has already passed its version.
The Budget Committee approved a series of amendments Thursday, including one that reversed a decision about how to hold HMOs accountable for spending money on patient care.
The amendment would require managed-care plans to spend 90 percent of the money they receive on patient services, a concept known as a “medical-loss ratio.” HMOs would pay back money to the state if they didn’t hit that 90 percent target.
An original version of the bill included that ratio, but a committee last week eliminated it and approved an arrangement that could lead to HMOs sharing Medicaid profits with the state. The House bill includes such a profit-sharing plan.
Michael Garner, president of the Florida Association of Health Plans, said the medical-loss ratio is an issue that the two chambers will have to discuss in reaching agreement on a final bill. Garner’s HMO-industry group favors the House’s profit-sharing proposal.
Another amendment approved Thursday would allow Medicaid managed-care plans to decline to provide family-planning services. The amendment was geared to “provider-service networks,” which are local plans that are expected to compete with HMOs after the Medicaid overhaul.
Negron described the amendment as a “conscience clause” and said he filed it because groups such as Catholic hospitals want to form provider-service networks. But Rich said she was concerned that Medicaid beneficiaries might not have other managed-care choices in some areas, which would leave them without family-planning services.
House and Senate leaders agree they want to make major changes in the $20 billion Medicaid program and shift beneficiaries into managed-care plans. But with the May 6 end of the legislative session nearing, they still have to work out myriad differences.
The Senate’s proposed spending cap is one example. But others were apparent during the Budget Committee meeting.
For instance, the Senate would revamp the way transportation services are provided to Medicaid beneficiaries, giving control to managed-care plans. The House, meanwhile, would keep in place a statewide system of transportation contractors. (Read the story.)
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Senate Faces Political Minefield with Immigration Changes
St. Petersburg Times:
For evidence of the political minefield that is immigration reform, look no further than the Florida Senate.
On one side is Senate President Mike Haridopolos, looking to attract tea party conservatives to his Republican bid for U.S. Senate and others in the GOP – including Gov. Rick Scott – who want to show they are taking action to tackle illegal immigration.
On the other side are the state’s powerful Hispanic caucus and some of the biggest special interests in Florida: the Chamber of Commerce, Associated Industries of Florida, the FloridaCatholic Conference, farmers and other agricultural interests. The clergy argues a crackdown would be immoral; the business groups worry it would be a blow to the state’s limping economy.
All of this puts Haridopolos in a bind. As a Senate candidate, he doesn’t just need conservative voters: He needs cash. And groups like the chamber, AIF and U.S. Sugar have it.
For now, he has stayed out of the fray. Taking the heat is the person he tasked with shepherding the Senate’s immigration bill: Miami Republican Sen. Anitere Flores….
Her proposal is softer than the one headed to the floor of the state House, which would make being undocumented a state crime, in addition to already being a federal offense.
“The House bill goes much too far,” Flores said Thursday.
The House version would also require police to check the immigration status of a person who is the subject of a criminal investigation if there is “reasonable suspicion” that the person might be undocumented. The Senate would have police check the status of inmates. And while both bills would mandate employers to check employees’ immigration status, the Senate proposal gives employers more leeway on how to do so. The Senate stalled debate over its bill until after next week’s Passover and Easter holidays.
Meanwhile, Scott has remained steadfast.
“If somebody is in our country and doing something illegal, they should be asked if they are legal or not if they’re stopped by law enforcement,” Scott said earlier this week.
Business and tourism groups fear approval of an immigration bill will hurt their bottom line.
“The mere consideration of this bill is causing the image of the state of Florida to be tarnished – not only nationally but internationally,” Adam Babington, the Florida Chamber’s lobbyist, told a House committee Thursday. (Read the story.)
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Expanded School Voucher Plan Advances in Senate
Orlando Sentinel:
A plan to expand school choice by creating education savings accounts – dubbed by some as “vouchers for all” – won a favorable vote from the Florida Senate’s education committee this morning.
The education savings account would be a pot of public-school money that parents could use to pay for private school, homeschooling services or pre-paid college plans. It would be available to current public school students who left the system and to some who were not enrolled in public schools.
“It recognizes that parents should have choices,” said Sen. Joe Negron, R-Stuart, sponsor of the savings-account measure, which he called a “GI bill for kids.”
Gov. Rick Scott and his advisers touted the controversial education savings-account idea earlier this year as an ultimate school-choice plan. But Scott later said he would not ask theFlorida Legislature to approve it this session….
The bill, SB 1550, would let parents use state taxpayer money to pay for their children to attend private schools, including religious ones. The savings account money could also pay for homeschooling or tutoring services or college-savings plans. An identical House measure has not come up for a vote yet.
If the savings accounts were in effect this year, they would be worth about $3,100 each, the Senate estimated.
The concept for the new, and expansive, choice plan was devised by the Goldwater Institute in Arizona as a way to offer parents options outside public schools but meet the constitutional problems of earlier school-voucher programs.
Florida’s first private-school voucher program was struck down by the state supreme court in 2006. The court said the program violated state requirements for a “uniform” public school system and diverted “public dollars into separate private systems.”
Senate staff in their analysis of the bill wrote that the new plan could face court challenges. The Florida Education Association, the statewide teachers union, has said it likely would sue, if such a plan passed because it violates the earlier court ruling. The union led the successful court battle against the now defunct voucher program. (Read the story.)
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Senate Moves to Put Local Governments, Not State, in Charge of Growth Management
St. Petersburg Times:
A sweeping rewrite of 26 years of growth management law received swift approval from the Senate Environmental Conservation Committee on Thursday, opening the way for the most substantial change in Florida development law in decades.
The essence of SB 1122 is to shift the review and regulation for development from the state to local governments with the repeal of the 1985 Growth Management Act.
The goal is to “promote the transition of authority from the top-down command-and-control approach,” said Sen. Mike Bennett, R-Bradenton, the bill’s sponsor. “We have found that the state of Florida is not as good at managing downtown Fort Lauderdale as downtown Fort Lauderdale is.”
The concept of concurrency – a requirement that schools, parks and roads be built along with the development that uses them – would be left up to local governments, allowing them to decide whether to allow existing resources to be strained by development or not. Local governments would no longer have to prove whether their development plans are financially feasible, and local governments would be banned from imposing any impact fees for nonresidential development for two years.
“We’re trying to create jobs. We’re trying to build jobs,” Bennett said. (Read the story.)
_________________________________________________________________________________________ Speaker Cannon Says Senate Pension Proposal for Public Employees Not Practical
Florida Tribune:
State officials have warned that a major pension overhaul pushed by the Florida Senate can’t be carried out until January 2012.
This bit of news could throw a major wrench in budget negotiations. That’s because it means that savings from pension reform won’t be there until halfway through the next fiscal year.
Sen. J.D. Alexander, R-Lake Wales, said Thursday he does not agree with the analysis on House and Senate pension plans that was put together by the Division of Retirement.
“I don’t buy it,” Alexander said.
One of the big differences between the House and Senate pension overhauls is how much state workers, teachers, firefighters and sheriff’s deputies have to pay. The House has proposed a flat 3 percent contribution rate and state officials say they can put that in place by July 1 of this year.
The Senate, by contrast, has a tiered approach where employees would pay 2 percent, 4 percent or 6 percent based on their salary. That method, according to the Division of Retirement, would “represent a significant programming challenge” for both state government and the nearly 1,000 local governments that also participate in the Florida Retirement System.
House Speaker Dean Cannon said that analysis means that the Legislature should abandon the concept for now.
“It does mean it is not practical to implement a tiered system or count any of the savings,” Cannon told reporters.
Alexander, however, said he’s confident that the changes can be made within 90 days.
The House and Senate budget talks have been put on hold until after Easter. But in order to restart those talks, House and Senate leaders will need to reach an accord on how much money can be obtained from the pension overhaul. The Senate is relying on a higher amount of savings — some of which it used to allow for a higher level of spending on education and state universities. (Read the story.)
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House Committee Approves TABOR Revenue Limitation Proposal
Orlando Sentinel:
House lawmakers are advancing a proposed constitutional amendment that has already cleared the Senate to put new limits on the power of future legislators to tax and spend.
The House Appropriations Committee advanced HJR 7221 Tuesday over protests from Democrats and a few majority-party Republicans that the proposed reform, carried by Rep. Steve Precourt, R-Orlando, goes too far in limiting the power of future lawmakers to deal with budget woes.
The amendment – if passed by the full House and by 60 percent of voters in 2012 — would impose a cap restricting future budget growth to a formula based on population growth and inflation. It would replace a less-tough cap – based on personal-income growth — that passed in 1994. The state has never exceeded the existing cap.
Capping state revenues has been on the radar in Florida since the explosion in government revenue in the first seven-plus years of the last decade caused by rampant growth and a housing bubble.
A broader cap that also applied to local governments was debated by the 2008 state taxation and budget reform commission. The concept has been pushed for three years by Senate President Mike Haridopolos, R-Merritt Island, who is running for the U.S. Senate and seeking tea party support.
“We’re here today because we have a revenue cap that doesn’t cap,” Precourt said. “We’ve seen what happens in recent years when the cap doesn’t work.”
The state budget rose from $47 billion in 2002 to almost $74 billion in 2007 – though the measure lawmakers are now considering for 2012 could be less than $67 billion.
But several lawmakers complained that a tighter limit might have unintended consequences for future lawmakers if circumstances change.
“We spent the last session getting high-speed rail, red-light cameras and septic-tank inspections passed only to turn around and try to repeal all three,” said Rep. Paige Kreegel, R-Punta Gorda, who voted against the amendment.
Rep. Trudi Williams, R-Fort Myers, voted against it after saying Florida had amended its constitution too often.
Still, the amendment comfortably cleared the committee, 14-10. The bill passed the Senate last month, 27-13.
Under the amendment, revenues that exceed the spending cap would be transferred to the state’s budget-stabilization fund. The amendment also would allow legislators to “bust the cap” and spend more dollars with a super-majority vote. Or they could ask voters to do it.
Democrats, labor unions, the Florida League of Women Voters and social-service advocates have called the cap a potentially dangerous attempt to follow states such as Colorado, the first to pass a Taxpayer Bill of Rights, or TABOR, in 1992. Its stringent revenue and spending limits sparked fierce political warfare over education and roads spending until voters in 2005 passed an amendment making the cap less restrictive. (Read the story.)
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Cannon Says CEOs Haven’t Asked for Tax Cuts
Tampa Tribune/Associated Press:
No Florida CEOs that House Speaker Dean Cannon said he has talked to have asked for the corporate income tax cuts Gov. Rick Scott has been pushing as part of his job-creation agenda.
Cannon and Senate President Mike Haridopolos also said Monday during the taping of a joint television interview that they stay up at night worrying about how nearly $4 billion in spending cuts will affect residents from the seriously ill to public employees. Both Republican lawmakers, though, said spending cuts are necessary because taxpayers cannot afford to pay more.
“The governor made a big priority of a corporate income tax cut,” Cannon said. “Frankly, of all of the Florida CEOs I’ve spoken to not one of them has actually asked for the corporate income tax cut.”
Cannon said CEOs tell him reductions in property taxes and state regulations and limits on lawsuits, all also part of Scott’s agenda, would help more than a corporate tax cut. He said most Florida-based companies don’t pay the tax to begin with because they fall under an exemption for corporations with 75 or fewer stockholders.
Scott, a former hospital chain CEO, later said it would be a big mistake if lawmakers fail to cut the corporate tax.
“I talk to people all the time,” Scott said. “A reduction of business tax will have a dramatic impact. I hope the House and the Senate understand that that’s a significant factor how people make a decision to move here.”(Read the story.)
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It Will Always Be Cheaper to Do Business Somewhere Else
Robert Trigaux column, St. Petersburg Times:
Did Florida really sign up for a fool’s game of trying to make Florida the cheapest place to do business? It feels like it, given the obsession of our new state leadership.
If Florida costs less, if business regulations are severely pruned, will businesses really flock here? It sounded good during the desperate unemployment days of the governor’s race. Pounded upon in unending TV ads, that message – I’ll make Florida irresistible for businesses that come here and create jobs, jobs, jobs – was powerful enough, buoyed by $70 million in personal spending, to give Rick Scott his own job as Florida’s new governor.
Rarely a day goes by when Scott does not remind us he’s making phone calls, personally telling company executives in cold-weather, higher-tax states that pro-business Florida is open for, well, business. If Scott gets his way, he reasons, there soon won’t be any state tax on businesses here. So come on down!
At last check of our state border, there’s no backup of corporate moving vans clamoring to get into Florida.
Yes, we’re only 100 days or so into the Scott era. His mantra – Florida, we’re cheapest – is still new. So maybe those vans are still packing up North for the trip, or maybe waiting for gas prices to drop.
More likely, Scott will find business executives elsewhere are not simpletons.
Execs may like the idea of lower taxes or fewer rules. A few firms might trickle down to Florida, especially if they get sweeteners from state incentive funds. The governor wants $427 million, money meant for roads and affordable housing, to fund state incentives to lure jobs.
But most business executives will balk at moving here for other reasons.
They will furrow their brows at the state’s public schools, never much of a selling point to a Corporate America looking for the best-educated workers, and see turmoil and cuts.
They will search for a world-class university system and see only cutbacks and calls for big increases in tuition.
(Read the story.)
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Tax Break Could Steer Productions to Universal Orlando
Orlando Sentinel:
Universal Orlando wants the Florida Legislature to pass a tax break this spring that critics say is designed to steer productions of movies and television shows to the resort’s own film studios.
The measure is included in a broad economic-development package that was approved last week by the state House of Representatives. It would create additional incentives for the makers of movies, TV shows and other entertainment productions that do most of their filming at facilities across the state that meet certain size, lighting and electrical criteria.
Universal and other supporters say their goal is to encourage companies to use dedicated film studios for shooting, rather than basic warehouses or other nonspecialized locations.
But critics say the measure – which was initially written by lobbyists for Universal – is so narrowly tailored that only a tiny number of facilities throughout Florida would benefit from the additional incentives….
The legislation in question (HB 7203) would make an assortment of changes to tax laws and business incentives. The proposed changes include several to Florida’s $75 million entertainment-industry incentive program.
Under the existing incentive program, production companies making everything from big-budget movies to television commercials, video games or music videos can get tax credits generally worth 20 percent of their spending in Florida. They can apply those tax credits to their corporate-income or sales tax bills.
The provision sought by Universal Orlando would give an additional 5 percent tax credit to productions in which more than half of principal photography occurs in a “qualified production facility.” It defines such a facility as a building or a complex of buildings and associated back lots that, among other requirements, has one or more sound stages of at least 7,800 square feet, sufficient air-conditioning for shooting without the need for supplemental units, and a permanent electrical grid designed to bear the full lighting load needed for a movie production.
It’s unclear precisely how many studios in Florida meet that definition. The Governor’s Office of Film and Entertainment said Monday that it was certain of only one – Universal’s – that would. But representatives for G-Star Studios in Palm Beach County, Sanborn Studios in Sarasota, and Chapman/Leonard Studio and Production Center in Orlando said they think they would, as well.
But local film officials in other markets said their facilities are shut out by the restrictions. “As it reads right now, I think it limits it to a few,” said Todd Roobin, the film commissioner in Jacksonville. “There should be a little tweaking, so there’s somewhat of a broader component to it.” (Read the story.)