Observations and musings on Jacksonville Politics

Crist vetoes Special Session budget cuts

Today, Gov. Crist vetoed spending cuts and fund shifts totaling $364 million from the budget recently passed during Special Session.  He let stand the $190 million spending cut to the affordable housing trust fund, however.

Here’s the link to the line-item veto list.

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Legislature could’ve closed easy loopholes – and still can

Timely article below from the Tampa Tribune discussing how the Legislature could have easily fixed some tax loopholes during the Special Session.  They still can fix them during the upcoming regular session.  The question is:  do they have the wherewithal to do it?

TAMPA – Although the Florida Legislature slashed budgets for schools, children’s health care and living assistance for the elderly in its recent special session, it ignored a couple of easy fixes – loopholes in corporate tax law – that could have produced revenue to avoid some of the worst cuts.

In its regular session in March, facing an even bigger deficit in the coming year’s budget, the Legislature almost certainly will have to look at those and other ways to increase state tax revenue.

In the special session that ended Jan. 14, Democrats reacted angrily against the refusal of Republican legislative leaders to consider two measures in particular:

•Closing a loophole that lets corporations sell high-value properties without paying the documentary stamp tax that’s supposed to apply to all Florida real estate.

•Enacting laws that prevent corporations from “exporting” profit to other states, therefore avoiding Florida corporate income tax.

Those fixes could have produced an estimated $500 million in revenue, roughly what the Legislature cut from public schools, Democrats said.

“Even a few dollars would have been helpful in preventing some of the things we did that hurt people,” said Rep. Mark Pafford, D-West Palm Beach, who proposed legislation on the “doc stamp” tax. “It’s not a new tax, just closes a loophole people have been taking advantage of.”

Republican Gov. Charlie Crist says he thinks the Legislature cut more than they should have, and he may veto some cuts.

Republican legislative leaders gave several reasons why they wouldn’t consider any measures to increase revenue in the special session, called to fill a gap in the current year’s budget.

“The bottom line is our constituents have voiced very loudly, we cannot afford to pay more taxes right now,” said state Sen. Victor Crist, R-Tampa. “Seven percent of our constituency is on unemployment. The last thing we want is government digging deeper in our pocket

Victor Crist added that with even bigger budget cuts looming, the state wanted to hold back any revenue cards until the regular session in March.

“That’s going to be a very wrenching experience,” he said.

Concerning the doc stamp tax, he said, “We didn’t want to do anything to hinder an industry that has been brought to its knees.”

Asked why he opposed considering revenue increases in the special session, House Speaker Ray Sansom, R-Destin, told the Tribune: “We agreed that takes time for the committee process and to let citizens have input on what we’re doing. That really is a regular session issue.”

Democrats countered that closing the loopholes is a simple matter of tax fairness.

Read the rest of this entry »

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Governor readies his veto pen

It looks like the Governor could veto legislation passed in the Special Session as early as Tuesday.  Rumored to be up for the dele mark are:  education, public safety (specifically those 66 parole officers recently laid off), and Florida Forever funding cuts.  He better hurry up and veto the public safety cuts.  Evidently more parole officers may be cut soon.

In the meantime, S&P has downgraded Florida’s financial outlook to negative – which will make it harder for the state to borrow money for projects like highways and schools.

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Special Session not so special

From the Miami Herald:

The plan for closing a $2.3 billion gap in the 2008-09 state budget proceeded along two tracks last weekend — one of political ideology, the other of economic expedience — and is headed for an early vote on Wednesday. If approved, the budget recommendations — which include cuts, borrowing and reductions in programs and services — will fulfill the one goal of the special session: producing a balanced budget.

So at least give legislators credit for doing their job. However, they deserve no praise or plaudits for smart planning, good governance, or creative thinking. And they certainly don’t deserve any commendation for seizing the moment of an extraordinarily massive recession. They are blowing a chance to begin the difficult job of addressing Florida’s revenue flaws and improve our state’s chances of surviving future economic crises.

Ready for bipartisanship

For now, state agencies must find ways to live with less, especially schools, social services, environmental and other programs. Also taking a big hit are contingency and trust funds, particularly the Lawton Chiles Endowment Fund. Agencies that get a break include those serving prisons, children’s hospitals, nursing homes and highway repairs.

Two important features have been missing from the budget negotiations: 1) Aggressive leadership from Gov. Charlie Crist; 2) a spirit of bipartisan participation.

President-elect Barack Obama is showing by example that reaching across the political divide for ideas and support can yield positive results. And the country clearly is ready for it. This message hasn’t reached the Legislature’s Republican majority, which is clinging to an Our Way or The Highway approach. In fairness, this is the same tactic used by the Democratic majority when it controlled the Legislature in the 1980s and ’90s. But this approach doesn’t serve the best interest of 18 million Floridians.

Consider all good ideas

The Republicans’ mantra of No New Taxes is generally considered to be sound practice during an economic downturn. But several factors suggest that Florida’s position is the exception that makes the rule: Our state relies too heavily on sales-tax revenues; there are readily available funds through a tax on Internet sales in the state; and some exemptions to the sales tax are unnecessary and woefully outdated.

Lawmakers no longer can afford to ignore the good ideas of some members because of party affiliation, or refuse to tap resources that can stave off future budget crises.

This special session is a patch job, a Band-Aid — and nothing more. Maybe lawmakers will address the flaws that perennially plague us in the regular session this spring. There always is hope.

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Legislature agrees on budget cuts

The House and Senate conference committees came to an agreement on the $2.4 billion budget cuts this morning. From the St. Pete Times:

The House and Senate agreed this morning on the how to raid trust funds and savings accounts to close the state’s $2.4 billion budget deficit, sparing the State Transportation Trust Fund and shielding housing trust fund money from the deepest cuts.

That means the budget will be printed today, laid on members desks and be ready for final approval Wednesday.

The agreement appears to leave a $400m cushion in the budget in case the economy and state tax collections continue to nosedive. At a glance, here’s what the $2.8b plug/Sunday agreement looks like:

*$1.2b in total spending cuts, plus the following raids, sweeps and trims:

* $400m from the Budget Stabilization Fund

* 700m from the Lawton Chiles Endowment Fund

$190m from the Housing Trust Fund

$381m from other trust funds (we’ll find out which ones later)

$1.5m cut from the governor’s office (insted of just $1m)

$100,000 by getting rid of a state aircraft.

Next up, closing a $4-5 billion dollar budget hole during the regular legislative session that begins in March.

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More Floridians receiving food stamps

One in 10 Floridians is now receiving food stamps, a 30% jump in just one year according to an article on tbo.com.  The increase in applicants in 2008 swamped State call centers and appeared at the same time the State was cutting the workers who worked in them. 

The growing hardship is reflected in calls to the state food stamp hot line, which numbered three million in December.  “The tears, men and women, single fathers coming in,” said Lee Ann Godwin, who helps people with their applications and listens to their stories. “It hurts their pride and their ego.”

Applicants face an even tougher road because DCF is trying to process more claims with 3,000 fewer workers as a budget-strapped state cuts employees.  “I know there is a lot of frustration in the public who can’t get through to the call centers,” said DCF Secretary George Sheldon.  Frustrated, more and more people are stopping by local food stamp offices to apply in person instead.

Statewide, 1.8 million people in 921,385 households are on food stamps, an increase of 29 percent over 2007.  Locally, Duval County also saw  a 29% increase (to 45,921) in the number of households receiving foodstamps in 2008.  Just to the south of us, St. Johns County saw a 48% increase (to 4,414) in the number of households receiving food stamps.

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Special Session priorities?

Our legislators have such an interesting set of priorities considering the huge budget hole they are staring down. 

One of the first things House members did today was to vote down 70-42 (along party lines), Rep. Waldman’s bid to get his bill to increase cigarette taxes heard.  Rep. Waldman’s proposal would have raised up to $700 million.   According to the Tallahassee Democrat,

House Majority Leader Adam Hasner of Delray Beach said the Democratic attempt was misguided and poorly timed in a statement he issued immediately after the vote.  “There are too many unknowns right now about an increased cigarette sales tax, such as how much it would collect and when we would start to realize the new revenue, to add this issue to the condensed agenda of the Special Session at this time,” Hasner said in the statement.

I wonder why that same logic didn’t apply to raising fines for speeders. 

As for the Senate, one of the first thing its members did today was vote on a resolution expressing their solidarity with Israel. 

Who elected these people?

Both the House and Senate refused to take a look at Florida’s current sales tax structure with it numerous exemptions during the Special Session.  However, to his credit, Senate President Jeff Atwater promised it would be a subject of the Senate’s when it begins meeting in regular session in March.  I hope he has more success in getting rid of the sales tax exemptions than one of his predecessors – former Senator (and former Senate President) John McKay.

BTW, the House approved its budget on a 73-40 vote; the Senate, 27-13. The House-Senate conference committees will work over the weekend to reconcile differences.

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The Special Session today

Today’s special session saw the House and Senate finally closing their hearings on the budget and getting ready to vote on their respective proposals tomorrow according to an AP report

While they are fairly in agreement on cutting nearly $1 billion in spending and raising traffic fines, two main questions divided the House and Senate: Whether to cut spending for road building and other transportation projects and how much money to borrow from the state’s tobacco settlement endowment.  The House wants to take $235 million out of the State’s transportation trust fund and use that money to offset shortfalls in the general fund.  The House plan would take $400 million from the Lawton Chiles Endowment Fund, while the Senate’s package would remove $700 million.

The House and Senate versions also differ in other areas:

Affordable Housing:  The Senate would remove $140 million from the affordable housing trust fund compared to $283 million under the House plan.

Budget Stabilization Fund:  The House would nearly drain the budget stabilization fund by removing $600 million while the Senate would take out $200 million.

Education:  Both packages would require pay cuts for school employees in financial troubled districts, but they differ on the details.  The House amended its version during floor debate to exempt teachers. It would go into effect if a district’s cash balance falls under 2 percent of its general fund budget. Under the Senate plan, salaries for all district employees including teachers, administrators, school board members and non-teacher employees would be cut only if a district is unable to pay its bills or make payroll.

Conservation:  The Senate proposal would cut the state’s Florida Forever environmental land-buying program by $4 million for the rest of the current budget year and $20 million annually, while the House proposal would leave the program untouched.  BTW, the Senate cuts in this program would affect projects here in Jacksonville:  Ft. George State Park, the Jacksonville-Baldwin Rails to Trails expansion, Ocean Hammock Park, and  Town Center Park. 

Once the House and Senate vote on their proposals, they will have to conference to resolve the differences between the two proposals.  Then Florida law requires that they wait for a three day cooling off period before they take a final vote on the budget.

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Legislative update for Wednesday, January 7th

The various House and Senate committees met today continuing to go over the budget cuts.  House bills have been placed on the Special Order calendar for that big discussion (the House Session) that Speaker “Criminole” Sansom has scheduled to run from 3pm to 6pm tomorrow and reconvene if necessary on Friday.  The Senate bills are still under discussion at the committee level tomorrow, with the full Senate set to meet in Session at 9:3o am Friday morning.

House Dems issued calls to slow down on the budget cuts and wait for the federal stimulus package from Washington, DC.  While the Senate Dem caucus voted today to vote against the budget bills tomorrow in committee hearings and again at Session on Friday morning.

You can view the filed House appropriations bills and proposed Council bills, and the Senate’s proposed Committee bills here.

Footnote:  Not to be outdone, Rep. Waldman filed another cigarette tax bill today (HB15A).  Let’s see if the House refuses to introduce it again or if the bill is just left to wither on the vine.  Waldman is nothing, if not persistent.

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This is a budget cut?

I am still trying to figure the following bill out – especially how it figures into the budget cutting equation. 

Representative Ellyn Bogdanoff, (R-Broward and Palm Beach Counties and Majority Whip 2006-2008) has filed House Bill 11A.  Essentially, this bill would require that any time the State outsourced human services related to mental health, substance abuse, child welfare, or juvenile justice and passed a new governmental mandate that was not in place when the human services were contracted out, the State must renegotiate the contract  if there is a “material adverse financial impact” on the contractor. 

A “material adverse financial impact” is defined in the bill as increase in reasonable costs that is the lesser of 1) 5% of the maximum obligation amount or  unit price of the contract; or, 2) $10,000 in the aggregate for all new governmental mandates taking effect during the calendar year of the contract term; or an action that affects the core and primary intent of the contract.

In addition, the contractor’s employees’ cost-of-living wage increases are tied to raises given to state employees.  There are also a bunch of new reports and recordkeeping requirements placed on the state agencies.

So exactly how is this a budget cut? 

I thought it was supposed to be cheaper to outsource, but when you are paying private employees the same pay increases that you are giving state employees, requiring the State agencies to do more analysis, and essentially guaranteeing contract modifications for additional government mandates by giving the contractors a right to a hearing if the agency refuses to modify the contract, where are the cost savings? 

Maybe I’m missing something here.

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