The Fine Print

Death knell for Florida newspapers?

(UPDATED: Despite the warning from Sen. Ronda Storms that the end of newspapers will soon be here, the Senate Community Affairs Committee refused on Tuesday morning to approve Storms' bill that would have allowed cities and counties to stop advertising in newspapers. Sen. Michael Bennett, R-Bradenton, called the thought of print newspapers dying "terrifying" and said that the Senate will spend the summer studying the potential impacts of the legislation. Several local government officials said they supported ending the legislation. Mayor Richard Kaplan of Lauderhill told Storms "When the Miami Herald is bankrupt then where is it going to be published?")

A Senate panel today will take up a measure that could have a dramatic impact on Florida newspapers across the state if ultimately adopted by the Florida Legislature.

The measure, SB 2292, would allow local governments to place legally required public notices on a government website as opposed to printing them in newspapers. The legislation is sponsored by Sen. Ronda Storms, R-Brandon, who is pushing other bills designed to lower costs for government entities, including one that would remove requirements that money must be set aside to buy art for new state buildings.

The legislation spells out that legal notices can be placed on the Internet as long as the local government has a library or other facility where members of the public can access the Internet for free. Another requirement is that the government allow members of the public to register to receive notices by mail or e-mail.

While there is no definite revenue impact associated with the legislation, the Senate bill analysis notes that "the impact of this legislation on the newspaper industry is indeterminate but likely to be substantial."

Florida newspapers have been hit hard by twin factors: The migration of readers to the Internet and the recessionary forces that have curtailed ads from major sources such as car dealers, department stores and real estate.

This has led newspapers across the state to cut down on the size of newspapers as well as the size of their staffs. There is rampant speculation that at least one, if not more, newspapers in the Sunshine State could be forced to shut down in the very near future. (Full disclosure: I was among those affected by a round of layoffs at The Miami Herald and I still freelance for various news organizations.)

In many towns and cities, the daily newspaper prints legal notices for everything from tax liens to comprehensive plan amendments. However, it is worth noting that in some large metro areas those ads do not always appear in the large metro paper, but in smaller papers that also circulate.

McCollum building up political fund

Attorney General Bill McCollum is among those waiting for Gov. Charlie Crist to decide if he will run for re-election or seek a spot in the U.S. Senate. McCollum said recently he will run for a second term as AG "unless circumstances change."

But as McCollum, like Chief Financial Officer Alex Sink, continues to wait he has set up a separate account that could help him, albeit indirectly.

McCollum has a committee of continuous existence called the Building Integrity and Lasting Leadership Fund, or BillFund for short. And since its creation last year he has used the separate account to give money to both legislative candidates as well as the Republican Party of Florida.

McCollum has raised more than $79,000 for the account as of March, with money coming from stalwart Republican donors as well as others such as the Florida Justice Reform Institute. The institute, which gave McCollum's fund $5,000, is a supporter of the legislation that would place limits on contingency fee caps with outside attorneys that contract with the Attorney General's office. This legislation recently caused a dust-up in the Florida House.

Other contributors of note: GrayRobinson, $5k; Greenberg Traurig, $5k; Tew Cardenas, $3k. The biggest contributor so far has been South Florida venture capitalist Jonathan Kislak who donated $10,000.

So far more than $62,000 from the account has been spent including $25,000 sent to the Republican Party of Florida and a series of $500 donations to 16 legislative campaigns.

When asked recently about his CCE, McCollum said the fund allows him to fulfill his Republican Party obligations outside what he called the "non-partisan" AG's office and help the party and candidates.

"I wear two hats,'' said McCollum. "I am in what I think is a fairly non partisan position and very frankly happy that it is, it's Attorney General. But I am also viewed within the Republican Party of Florida as one of the three statewide elected officials so I have certain obligations and this allows me to fulfill some of those. It's sometimes frankly easier to raise money into the BillFund than to get people to write a check directly to the Republican Party of Florida."

Millions spent on technology and not much to show for it

A legislative review presented on Thursday sharply criticized state agencies for mismanaging the installation of several high profile technology projects and pointing out that millions had been spent on computer systems that weren't working as initially promised.

Joseph Brigham, staff director of the Technology Review Workgroup, rapped agencies for poor oversight, poor planning and trying to rush into place complicated systems. Brigham also told members of the Senate Policy and Steering Committee on Ways and Means that in some instances there was no one who had the complete power to make sure that the project could be carried out as planned.

The total cost so far: More than $200 million.

One of the biggest projects reviewed by Brigham included Project ASPIRE, an ambitious attempt to put in a new financial reporting and accounting system for the state. The project was started in August 2003 but was suspended by Chief Financial Officer Alex Sink in May 2007 after the state had spent $104 million. Brigham's review criticized the Department of Financial Services - which was under Tom Gallagher for most of that period - for approving parts of the projects "before they were complete."

Other projects criticized included a document imaging project at the Department of Business and Professional Regulation, a criminal history system revamp by the Florida Department of Law Enforcement, and the Florida Safe Families Network by the Department of Children and Families.

The intent of Brigham's review was clear: Show examples of problems with big contracts. One of Sen. J.D. Alexander's priorities this session is to pass a contracting bill that would shift more control and power from the executive branch - primarily Gov. Charlie Crist to the Legislature.

The scant paper trail on Gov. Crist's flights and other issues

The Sun-Sentinel and the Times/Herald superbureau have spent the last few days raising questions about how much information Gov. Charlie Crist should provide when he takes private planes to and fro across the state.

The Sun-Sentinel said it had found more than 100 times where Crist had used private jets. The question is whether Crist paid for the flights himself, had the Republican Party of Florida pay for them, or the owner of the plane donated use of the airplane as an "in-kind donation" to the state. The Sun-Sentinel raised the question of gifts, but that would seem highly unlikely. That's because Crist, just like legislators, cannot take anything of value from anyone who works for, or has, a lobbyist.

There are a couple of other issues here to remember:

First there is the matter of 106.08 under Florida law. It states that a political party may not accept any "in-kind donation" if it "fails to provide a direct benefit" to the party. Now, what does that mean? Well a direct benefit would mean fundraising but it also means "furthering the objectives of the political party." So the question remains: How did Crist's use of a plane donated to the party "benefit" the party.

Secondly, there is a paper trail sort of, at least when it comes to flights donated to the party. They are required to file a copy of the letter sent to donors acknowledging the "in-kind donation."

A review of those records shows that the RPOF has sent out 45 letters in 2007 and 2008 thanking various donors for airplane travel. 10 of those letters thanked Jay Odom, the Panhandle developer involved in the ongoing scandal over former House Speaker Ray Sansom, while 12 were written to Guy Spearman, the well-known legislative lobbyist. Spearman's client list includes utilities, beer companies and even Gannett Newspapers.

As you can see, these letters do not say who actually flew on the plane. But sometimes the party did leave behind traces. For example, a Feb. 16, 2007 thank-you letter to Thomas Floyd has the words "Gov" written at bottom. A Feb. 16, 2007 letter has "House." An Aug. 2, 2007 letter includes the words: "EOG State Board Mtg." An Oct. 19, 2008 letter to Odom says "State + victory."

Stimulus money for out-of-work Floridians part of budget fight

While taxes, spending cuts and money from increased gambling are sure to be part of the looming budget stalemate, another element could deal with unemployment compensation for Floridians.

Millions in federal aid for unemployed workers requires action by the Legislature and so far it's unclear whether that will happen. More here.

There's are various pots of money available for unemployment comp. Some of it, such as a $25 a week increase for benefits, requires no action by state lawmakers.

Other pots of money require changes to the law and the way the program is run.

Florida can qualify for $444.3 million under a so-called "modernization" portion of the $787 billion stimulus package. It requires the state to change the criteria used to determine eligibility, and to offer coverage in one of three ways: Keep paying benefits to those enrolled in job training, beef up money for dependents, or give benefits to people who left their jobs due to family illness or domestic violence. The downside to this proposal is that it carries costs for the state at the time the trust fund is being drained to the tune of a $100 million a week and a tax hike for employers seems likely. Another problem is that the changes must be made permanent, although there are some who say the state could change the program back in 2012.

A totally separate issue is extended benefits for high-unemployment benefits. In order to take advantage of this money, the state would have to change the "trigger" used to calculate when this kicks in. The state could rein in more than $700 million by the end of the year and hand out money to some 250,000 individuals. The downside: It would cost the state $202 million in the second half of the 2009-10 fiscal year when the federal money is phased out. Some workers advocates, however, contend that the state can sunset this program once that happens.

Senate Republicans say they are willing to make some changes to take advantage of the money, but House Republicans are reluctant, warning of the "long-term negative consequences."

Power struggle between Crist and Legislature growing

This past Tuesday Gov. Charlie Crist and Chief Financial Officer Alex Sink unveiled a new website designed to allow regular people to track spending in state government. The idea, explained Crist, was to let people know that state agencies are "investing their hard earned dollars responsibly."

It turns out that it's not just the people who are wondering if state agencies are spending money wisely, it's also the Republicans who run the Florida Legislature.

Lost in the shuffle this week of abortion, budget cuts, and rallies at the Capitol was the unveiling of SB 2694. It is being sponsored by Senate budget chief J.D. Alexander, a Lake Wales Republican, who called it a way to bring "clarity and accountability" to the contracting process.

Put aside the interesting thought that the GOP-controlled Legislature is responding to some of the problems with contracting that happened under the last two Republican governors.

But what's more important is that this could represent a major turning point in the power struggle between the Legislature and the governor. During the eight years that Gov. Jeb Bush was in office he greatly increased his power, gaining more say in everything from judicial appointments to running universities.

Elections Commission director stepping down

Here's a story that I did on Thursday for The News Service of Florida.

THE CAPITAL, TALLAHASSEE, March 17, 2009…The executive director of the state panel that enforces election laws is resigning, ending an 11-year tenure that was marked by clashes with state legislators and her own bosses.

Barbara Linthicum, 62, said she decided to step down as executive director of the Florida Elections Commission to spend time traveling to Europe and across the country.

“I wanted to do other things while I had the time,’’ said Linthicum, who is ending more than 30 years in state government, including 16 years at the commission and a stint as the 2^nd Circuit Public Defender.

But Jorge Cruz-Bustillo, a Miami attorney and chairman of the Florida Elections Commission, said one of the reasons that Linthicum may have decided to resign was that she was frustrated with the fact that the nine member panel didn’t follow her recommendations regularly anymore. Cruz-Bustillo took over as chairman in November 2007 and during several public meetings cut off Linthicum from talking about pending cases.

“The commission used to rubber stamp whatever the director said which I believed was not the right way to do its job,’’ said Cruz-Bustillo. “I believe she became frustrated with it and it is one of the reasons that drove her to resign.’’

Is Florida's vaunted bond rating in jeopardy?

Sales tax collections falling, value of the pension plan plummeting, money from property taxes declining. How much longer before the next dose of bad economic news is that Florida's bond rating has been altered downward?

Back in 2005, former Gov. Jeb Bush trumpeted the fact that Standard and Poor's increased the state's bond rating to AAA, citing the "state's strong reserves and long term planning to avoid budget crises" as reasons for the decision. The reason it was big news is that with a better bond rating comes a much better borrowing rate.

All of the rating agencies have placed Florida on a negative outlook, said Ben Watkins, director of the State Division of Bond Finance, although none have yet downgraded the state's actual rating.

Why the budget deficit may be bigger than you think

Today on Friday the 13th everyone expects the size of Florida's budget deficit for the coming year to grow yet again.

The bad news that may come out is that general revenue collections - which is primarily driven by the state's 6 percent sales tax - will drop $2 billion under what economists forecast just last November. The culprit behind this change will be that the economy in the state is falling faster and deeper than any previously thought.

But here's the frustrating thing: General revenue doesn't cover the entire budget. While state lawmakers and staff focus most of their time and attention on this portion of the state budget, the size of the deficit - or conversely the size of the extra money to spend - is not entirely reflected by this number. I once asked Sen. Lisa Carlton, who was Senate budget chief in 2007 and 2008, why the Legislature doesn't come up with one number that states this is how much money they have to spend, but I was told that's just not the way they do it.

At at the end of the day, however, these other factors still have an impact on the size of the budget. Just as sales tax collections are down, so are tax revenues from other sources. And there's also important information from the other side of the ledger. Example: The state has to spend more money this year on the constitutionally mandated anti-smoking program.

Crist, the Cat Fund and Citizens

Gov. Charlie Crist on Monday for the first time signaled a willingness to let some insurance rates in Florida go back up.

When I asked him about Citizens Property Insurance Corporation and the possibility of hikes in 2010, Crist said "It all depends. I don't want rates to go up dramatically but I also want Citizens to be solvent and protected because a lot of people count on it, my parents included. We just have to go about it in a smart fashion."

Citizens rates have been frozen for three years and without legislative action the rates will go back up as early as January 2010. While legislation has been filed to keep the freeze intact for another year, it really hasn't moved so far in the Legislature.

But when asked about the Florida Hurricane Catastrophe Fund, Crist remained concerned about taking any actions that could lead to rate hikes. The problem with the Cat Fund is that right now it lacks the capacity to cover any major losses. This is due to the ongoing national credit crunch.

On Tuesday morning, the financial advisor to the Cat Fund will talk to the State Board of Administration - which is Crist, Chief Financial Officer Alex Sink, Attorney General Bill McCollum - about the situation and what can be done about it. Among the options on the table: Have the Cat Fund go out and buy private reinsurance, or try another put option similar to last year's $224 million deal with Berkshire Hathaway.

Crist, however said he is concerned about taking any actions, such as scaling back the size of the Cat Fund, which could trigger rate hikes among Florida customers.

'You always I think would rather have more coverage than less...and be able to maintain low rates so people can actually buy it,'' said Crist. "If they can't afford it, what good is it?"

Crist said his main goal is to keep working in Washington D.C., with people such as U.S. Rep. Ron Klein, on trying to get the Treasury Department to agree to purchase any bonds issued by the Cat Fund in the event of a huge storm.