The Fine Print

Scott's dinner conversation with J.D., Don Gaetz and Andy Gardiner

Gov. Rick Scott - after flying to Eustis to roll out his budget proposal at an event set up by Tea Party leaders - spent dinner with Sen. J.D. Alexander, Sen. Don Gaetz and Senate Majority Leader Andy Gardiner.

Here's the main things that they talked about during the conversation that began in the famed Florida Room of the mansion before it shifted to the State Dining Room.

* Gaetz and the governor talked with the others about the recent decision of Vision Airlines to come to Florida.

* Gaetz expressed his disappointment to Scott regarding some recent Visit Florida ads airing in Palm Beach County. Gaetz told Scott the ads featured Northwest Florida officials. He said he didn't understand the logic of targeting people from Palm Beach County to come north to the beach. Scott seemed surprised by the ads as well.

* Alexander, the Senate budget chief, told Scott that he had had the chance to meet the new Department of Management Services Secretary Jack Miles and that he had the right professional qualifications for the job.

* Alexander also said that he just been taking a first glance at Scott's budget proposal. He was urged to "just pass it." Later in the night that theme would be repeated when one of Scott's top aides would suggest to all three senators that the nation will be watching to see if the Legislature enacts Scott's "fiscally conservative" budget.

* There was some general conversation about Scott's flight to and from Eustis being waylaid because of bad weather. Scott also talked about the crowd that showed for the event. He briefly mentioned that those in the Tea Party - who he said included Democrats and independents - don't want to be "disappointed' by those they have supported. Scott also noted that he has had bigger crowds at Tea Party events than at Republican Party of Florida organized events.

* Gaetz said lawmakers were likely to start looking this year at the operations of the Florida Housing Finance Corporation, which is responsible for providing money to help developers build low-income housing. Alexander said he has begun questioning why the corporation needs any more money right now when there are plenty of empty houses in Florida due to the recession. Scott noted that he did not recommend any additional funding for them.

* Scott and Alexander started talking about property insurance. The governor repeated his vow to make changes this year to Citizens Property Insurance Corp., the state-created carrier of last resort. "Everyone understands we need to fix Citizens this year,'' Scott said.

* During dinner, Scott repeated a line from his budget rollout where he said "we shouldn't have fiefdoms" in state government. This came from a discussion on why on Florida's highways there were separate weigh stations for Department of Transportation and interdiction stations for the Department of Agriculture.

* Scott expressed his amazement that the state does not have a unified e-mail system for all of state government.

* Scott also said he is a "few days" away from naming someone in state government to take control of economic development efforts. This was part of an overall discussion where Alexander asked questions about whether or not Scott has been successful in talking to companies moving here, and what kinds of things he is hearing about those who may, or may not, move to Florida.

Alexander also asked about Scott's proposal to have more control over economic development incentive dollars. Alexander asked if Scott would be opposed to some sort of provision that states that if a certain company promises a large number of jobs then Scott has the authority to use the dollars without additional legislative approval. Scott said he could go along with that concept and said he had no problem with having thresholds in place.

* Gardiner briefly mentioned to Scott concerns about the use of psychotropic drugs on foster children. He relayed how Sen. Ronda Storms cared very much about the issue and that she would be pursuing it again this coming session. Gardiner also said that Storms had already met the new head of the Department of Children and Families and "hugged him.'

* Gardiner also urged the governor to help Florida retain - and even attract - Major League Baseball teams to Florida. Scott, who once was a part owner of the Texas Rangers, said he wants to make sure the state doesn't lose any more teams and that he wants to "put a focus" on many things the state can to help its sports teams and have people come to the state because of the teams.

 

 

Rick Scott's long list of challenges

A beaming Governor-elect Rick Scott and his wife, Ann, showed up at the governor’s mansion on Monday night where they joined Gov. Charlie Crist and First Lady Carole Crist for a symbolic menorah lighting ceremony.

Scott helped 11-year-old Mendy Oirechman light the candles of a large menorah that was placed up against one of the front windows and he later held hands with Crist as they briefly danced with some of the rabbis in attendance.

The ceremony, which was started under former Gov. Jeb Bush, was a tangible sign of some of the many social responsibilities that come with being governor. But it also could be seen as a prelude of many of the large and small challenges that will confront Scott once he is sworn into office in early January.

During the half-hour ceremony, he was reminded of Florida’s insurance problems when he was asked whether he planned to follow Crist’s footsteps. Crist went to Jerusalem and placed a prayer in the Wailing Wall where he asked God to spare Florida from hurricanes.  Rabbi Schneur Z. Oirechman politely asked whether or not the mezuzah that now sits on the door jamb into Crist’s office would remain once Scott becomes governor. Crist back in 2007 took some heat from groups such as the ACLU for placing the religious symbol in his office.

But there are many other large challenges that are looming for the rookie governor whether it's the state budget mess, the dismal economy, Medicaid and even the brewing leadership battle for the Republican Party of Florida.

The complete rundown on Scott's challenges can be found here at the Florida Tribune.

Crist's demise leaves an uncertain legacy

With polls showing that he continues to lag behind rival Marco Rubio, the hour that Gov. Charlie Crist spent with David Gregory at Tuesday night’s U.S. Senate debate might be his final time in the national spotlight.

Crist, who had successfully climbed from the ranks of the state senate into the governor’s mansion, is now confronted with the prospect that his political career for now is over. His decision to bolt the Republican Party and run as an independent means that he will have few options after this year.

His political ascent was marked by several twists and turns and it is hard to imagine that the man now preaching about independence and moderation once accused Democrats of dirty tricks in getting then-Gov. Lawton Chiles elected over Jeb Bush back in 1994.

But as Crist exits the stage, he leaves behind an uncertain – and largely incomplete – legacy as Florida’s governor. Crist became the first governor to voluntarily give up the post after one term in the 40-plus years that governors have been allowed to seek re-election.

Lance deHaven-Smith, a professor of public administration and policy at Florida State University, said Crist’s legacy actually depends on how the election turns out next week.

“Crist tried to move his party and the state back toward the middle after eight rather polarizing years under Jeb Bush,'' notes deHaven-Smith said in an e-mail. “He did not accomplish much policy-wise compared to many other governors, but he contributed to significant improvements in the state’s civic culture.  If he is elected to the Senate, Florida is likely to see a continuation of this moderation in public office for both parties.  If he loses, well, his legacy of compromise and pragmatism may be short-lived."

David Colburn, a professor of history at the University of Florida and a long-time scholar of state politics, said that Crist clearly tried to work with both political parties and was not ideological in how he approached problems. An example of this, of course, was Crist's decision to embrace the federal stimulus in order to help ease Florida's budget woes.

“I think it is easy to dismiss Crist as a politician who is only interested in getting and holding office and that there really is not much to him,’’ Colburn said in an e-mail.  “Clearly he is not ideological and he made clear to more than one state political leader that "he was not Jeb Bush." By that he meant that he was willing to work with both parties to find solutions to critical issues facing Florida and that he did not dismiss government's role in improving the quality of life for Floridians.”

But Colburn also made it clear that Crist is unlikely to leave the same kind of impact that other governors left.

A full look at Crist's uncertain legacy can be found here at the Florida Tribune.

10 things in the state budget you may not know about

Gov. Charlie Crist could act sometime Thursday on the $70.4 billion budget that state lawmakers adopted during their spring session.

Many salient facts about the budget have been reported including that it's bigger than what Crist himself proposed, that it includes money for items only if Congress kicks in extra federal help, and that it contains many projects pushed by the two budget chiefs in the Legislature.

But there's always some interesting odds and ends that haven't gotten much attention. Some of these spending items are perennials and have been in the state budget for years and are unlikely to get vetoed by the governor.

Still it's a testament to what can get wedged into a 444-page document.

1. School funding study - $100,000. The budget sets aside $100,000 to hire an “entity located outside the state of Florida” to study the state’s school funding formula and review it for the “sole purpose of recommending any improvements to the existing formula that would better reflect the varying characteristics of each of the 67 school  districts.” This study – which is due by Jan. 1, 2011 - is also supposed to assess the “equity” of the current school funding formula.This is a big deal for South Florida lawmakers still upset with a 2004 change to the state’s school funding formula that used to steer more money to urban school districts to cover higher living expenses. Legislators especially from Miami-Dade County want someone outside the state to look at whether the revamped formula is fair. This could be the prelude to another big fight next year over school funding.

2. Some college students helped, some college students hurt. There has been publicity surrounding the proposed changes to Bright Futures - the popular merit based scholarship program paid out of Lottery ticket sales. But less noticed was a decision by state lawmakers to actually increase the amount of financial aid set aside for needy college students.

Legislators for example cut by $1 a credit hour the money available for Bright Futures. This cut, however, could even be a bit larger since $25 million is contingent on getting extra money from the federal government to help with Florida's Medicaid bill. The move comes at the same time lawmakers increased tuition by 8 percent and universities are authorized to raise tuition even higher. But lawmakers also helped out Bright Futures students attending community colleges that offer four-year degree programs. 

Funding for two financial aid programs that help students at private schools - including the Florida Resident Access Grant - was cut by 4.1 percent.

But lawmakers did give a slight increase for need-based financial aid provided to both public and private school students. The maximum amount per award would go from $2,069 to $2,235.

Legislators also passed HB 5201 to accompany the state budget. This would make permanent changes to Bright Futures - including making the scholarship amount a flat rate in the budget instead of tying it tuition hikes - and would increase eligibility requirements over the next four years. This same bill also contains language that establishes the doctor of pharmacy program for the University of South Florida at the polytechnic campus in Lakeland. (It would not be all that surprising if Crist vetoes this bill.)

3. Anti-abortion counseling-$2 million. Legislators expect Crist to veto HB 1143, the health care bill that includes the requirement that women get an ultrasound if they are seeking an abortion during the first trimester. They have purposely held the bill back so there is time to mount a campaign to convince Crist to support it. What's lost in the dust-up is that more than a year ago Crist intervened and saved the state's crisis counseling program from getting cut. This program - which was started while Jeb Bush was in office - provides money for pregnancy support centers and advertising for billboards that direct people to a hotline. Lawmakers this year spared it from any cuts. There was a provision added that states 85 percent of the money will be used for "direct client services, website maintenance and Option line."

4. Insurance Commissioner Kevin McCarty's summer homework. McCarty has been a constant target of some lawmakers the last few years especially after he urged Crist to veto last year's property deregulation bill. This year the Office of Insurance Regulation did lose 10 positions in the new budget, but its funding level was close to last year's spending. Lawmakers, however, have demanded that McCarty produce by Sept. 1 a detailed report of all residential property insurance rate filings submitted during the last fiscal year. The report has to include lots of information including the name of the OIR actuary who reviewed the rate filing and the days it took for regulators to act on the filing request. This move comes in the wake of grumbling that McCarty's office opposed some of the insurance proposals floating around this past session even though his office was approving rate hikes.

5. Motorcycle safety awareness-$250,000. This is a reduction in funding from last year, but the budget this year directly orders the Department of Highway Safety and Motor Vehicles to provide this money to just one group: American Bikers Aiming Toward Education of Florida Inc. This is a group that lobbies on behalf of bikers and led the charge to repeal the requirement that bikers 21 or older must wear a helmet. The president of the organization says his group should get the money because it has a motorcycle safety awareness program in place that has helped reduce motorcycle deaths in Florida.

6. Banning assault rifles. The Sun-Sentinel first reported that there was a push to block Chief Financial Officer Alex Sink from using any money to purchase assault rifles for her fraud investigators. This led to a mocking ad from the Republican Party of Florida that prompted Sink to accuse the party of making fun of law-enforcement officers. Just to bring it full circle the final version of the budget included the provision that Sink's office cannot purchase "assault-type weapons."

7. Cancel this lease, we mean it. Last year the Legislature wanted to get a better handle of how land the state owned and how much office space it leased. Lawmakers weren't totally satisfied with the response they got from the state's main landlord - the Department of Management Services. This year's budget goes out of its way to specify how, when and where certain state offices are to be closed due to budget cuts. The budget orders the closing of 10 driver license offices around the state stretching from Fort Walton Beach to Vero Beach. But there's also language that lists the address and locations of other state offices in Key West, Chipley and Tallahassee that are to have their leases ended. Lawmakers also ordered the cancellation of a lease payment for a copier in a Key West office and for postage meters in several locations.

8. Unlicensed activity media campaign - $600,000. This has been in the budget for years, but it gets scant discussion. The state sets aside money to "publicize the dangers" of unlicensed real estate activity and unlicensed accountants. The money to battle unlicensed real estate activity can be used to pay for media production and advertising materials from a non-profit corporation that represents the largest number of licensed real estate professionals. The money to educate the public about unlicensed accountants will be spent in consultation with a company that represents the largest number of licensed CPAs.

9. Florida International University/Department of Health-$32.5 million. This has already gotten some publicity as a project associated with Rep. David Rivera, R-Miami and the powerful budget chief. But what's interesting is that the state plans to borrow money to construct and manage the building.

10. Free orange juice - $240,000. Of course what would a Florida welcome station be like if there wasn't free orange juice available to visitors. The Department of Citrus is authorized to spend this much for "citrus juice" to be handed out at the state's four welcome stations located in Escambia, Hamilton, Nassau and Jackson counties in North Florida.

Sink doesn't get any help from fellow Democrats

Senators sitting on the Senate Banking and Insurance Committee had a chance on Wednesday to help out Chief Financial Officer Alex Sink.

Sink is one of those who wants to give more power and authority to the state's insurance consumer advocate, Sean Shaw. The idea is that Shaw - who reports to the CFO - should be able to intervene in insurance rate filing cases and force state regulators to receive his suggestions and recommendations.

But the amendment doing that was voted down on a narrow 5-4 vote. Guess what? It was three Democrats joining with two Republicans who killed it. The four senators who liked the idea were all Republicans.

Despite that the bill, however, got a rough hearing. Read more about it here.

Is Gov. Crist's second biggest opponent in the Florida Senate?

 News from the camp of former House Speaker Marco Rubio that he raised "nearly" $1 million has set the political world abuzz that Gov. Charlie Crist could in fact have a tough road ahead in the GOP primary for U.S. Senate.

But the one-term governor may another problem brewing in the Florida Senate.

Sen. J.D. Alexander - the powerful chairman of the Senate budget committee - has made no secret in the past of his disdain for some of Crist's positions. But the Lake Wales Republican appears determined to wage a battle against the Crist administration on many fronts in the months remaining. It started last month when he pushed to have the state's long-range economic outlook include for the first time a statement that the financial condition of the Florida Hurricane Catastrophe Fund - which was expanded by state lawmakers in January 2007 - remains a potential risk for the financial health of Florida.

During a legislative committee meeting on Tuesday, he grilled Florida Insurance Commissioner Kevin McCarty over the state of Florida's property market - and then afterwards took umbrage at McCarty's statements. "He's artful to evading real answers to the questions,'' vented Alexander, although he later acknowledged that most senators knew the answers anyway.

Alexander remains steamed that Crist vetoed the insurance deregulation bill that could have kept State Farm from pulling out of Florida. He told reporters that the "consumer rhetoric" used by some was a "Trojan horse" and that he still found it inconceivable that a governor would think it was good riddance for State Farm to leave the state and potentially force hundreds of thousands of policyholders into the state-created Citizens Property Insurance Corp.

For his part, Alexander seemed ready to get back on board with a new version of the deregulation bill that lawmakers would once again potentially send to Crist.

But insurance isn't the only place Alexander could be a thorn in Crist's side. He is eagerly pushing ahead with efforts to scrutinize state government contracts even though Crist vetoed the bill that would have given the Legislature increased power to review them. Alexander directly the Senate budget staff this summer to start collecting information on contracts, with the result that he asked the Auditor General's office to look at a couple of the ones that he found.

Meanwhile, the state will soon will unveil the Transparency Florida website that will allow anyone get detailed information about anyone who gets state money. Alexander hopes the site will be ready for public consumption by sometime in November. He said on Tuesday that it would be the "most aggressive" transparency effort in the country and that he fully anticipates "gotcha" stories to emerge in the media once the information is uploaded from across the state.

Alexander said he met on Tuesday with Chief Financial Officer Alex Sink to discuss the ongoing effort, including some of the obstacles legislative staff have encountered. Alexander said one problem that they have run into is that certain travel reimbursements for anyone in state government have been treated as confidential information.

Hurricanes and the big casino

If you like playing the odds, here's a number to remember: 5.3 percent.

That's what a recently-concluded overview of the Florida Hurricane Catastrophe Fund pegs as the probability this hurricane season that the state-created reinsurance fund would exhaust all of its financial resources.

In other words, there about a 5 percent chance that the Cat Fund goes broke, creating a financial crisis in the state and forcing the fund to use its broad power to place assessments on insurance policies in order to pay off bonds that would be needed.

The health of the Cat Fund is worth noting in a week when for a few minutes it looked like Florida was about to get pounded again by storms. Its exposure was increased back in 2007 by the Legislature and Gov. Charlie Crist as a way to deal with rising insurance rates.

There is some good news about the Cat Fund. The combination of a new law and movement in the marketplace has actually greatly reduced the projected shortfall that exists in the fund. If a major storm were to hit Florida, the fund could have losses up to $7.1 billion that it could have trouble paying off right away. But this is sharply down from earlier this year when that shortfall was a whopping $18.5 billion.

The reasons for the drop? One was that state lawmakers scaled back the exposure of the Cat Fund by $2 billion. Under a comprehensive insurance package signed into law by Crist the top layer of the Cat Fund will be gradually eliminated by 2014.

The other reason for the drop was that many insurers in Florida - including State Farm Florida, USAA and Allstate Floridian - opted against purchasing coverage from the so-called Temporary Increase in Coverage Limit portion of the Cat Fund. This layer is optional to begin with but the new insurance law gave insurers more leeway to pass along rate hikes associated with buying reinsurance outside of this layer.

While there was $10 billion of capacity available in this higher layer, only $5.5 billion was purchased. Of that total, $3.5 billion of coverage was bought by Citizens Property Insurance Corp.

Now it is worth noting that all of the TICL layer falls within the Cat Fund $7.1 billion shortfall. That means that Citizens and a handful of other domestic carriers concluded it was worth the odds to purchase public reinsurance than to go out into the private market.

Citizens officials gave several reason for their logic, including it would be easier if only one state-created entity was forced to borrow money following a large storm and that the Cat Fund has the ability to stagger its assessments on insurance policies over several years while Citizens must charge a one-time assessment.

Alex Sink's cold war with the insurance commissioner

Gov. Charlie Crist and two members of the Cabinet voted on Tuesday to select a new person to head the Office of Financial Regulation, the arm of state government charged with investigating financial fraud.

But in the two-and-a-half years since a new administration took over there has never been a vote to confirm Insurance Commissioner Kevin McCarty, who was picked for his job when former Gov. Jeb Bush was still in office. And as long as Chief Financial Officer Alex Sink remains in office that won't likely change.

While McCarty has constantly been praised by Crist, it's clear that Sink has a completely different viewpoint. Sink has faulted McCarty on a number of times since entering office in 2007. Her displeasure flared up again at Tuesday's Cabinet meeting when McCarty presented a report on the entry of new capital into the property insurance market.

McCarty made the presentation at the request of Sink, who was following up on complaints from lawmakers who pushed the insurance deregulation or a.k.a the "State Farm" bill. These lawmakers have contended that McCarty misled Crist before he vetoed the legislation and there remains a quiet effort to get the Legislature to pass a new version of the bill if there is a special session later this year. The bill in essence would allow large capitalized carriers to have unregulated rates. (Sink refused to say Tuesday whether Crist should have signed or vetoed this bill - saying that was "the governor's decision" to make.)

McCarty for his part has refuted the suggestion he misled anyone, saying he and members of his office have been "candid" that a big chunk of new capital in Florida has come from unregulated surplus lines carriers which do not usually cover those in the residential homeowners market.

Sink on Tuesday morning chided McCarty for failing to get her the information she requested earlier, saying "it still stuns me" that his office was unable to get the information to her sooner. She added "It's really disturbing" and "I find it insulting."

The job of insurance commissioner used to be an elected position. But the 1998 reorganization of the Cabinet approved by voters collapsed the job of state treasurer and comptroller into the new chief financial officer position. But lawmakers uncomfortable with handing over all the power to the CFO - primarily Tom Gallagher since he was the main GOP candidate for the new job - placed the hiring and firing of the insurance commissioner under the governor and Cabinet.

But there was a twist in that 2002 law: It would take three votes - including yes votes from both the governor AND the chief financial officer - to either hire or fire the insurance commissioner. Translation: If the governor and the CFO don't agree, nothing happens. Sink has backed legislative proposals to change this, including an effort by Sen. J.D. Alexander to require an annual vote on whether to keep the commissioner, but that hasn't gone anywhere.

When asked on Tuesday whether she had confidence in McCarty, Sink instead repeated that he "didn't complete his assignment on time." When then asked if Sink would keep McCarty if she were elected governor, she said "that's entirely speculative."

She then added: "You always review the people who are there and evaluate their qualifications and then you make a decision."

Interestingly enough, Attorney General Bill McCollum - and Sink's likely rival for the governor's office in 2010 - praised McCarty's report, saying that Floridians should "very pleased" with the amount of surplus lines coverage since it has helped decrease the need to have commercial coverage picked up by state-created insurers.

Charlie Crist's big week ahead

Coming out of the Memorial Day weekend, Gov. Charlie Crist has a desk full of legislation that he must act upon by May 30, or this coming Saturday.

The bills now sitting on Crist's desk include several of the biggest and most important pieces of legislation passed - including the $66.5 billion budget. But they affect everything from workers' compensation insurance, to higher education, to cigarette taxes and Florida's fragile property insurance market.

In the run up to this date, Crist has been asked by the trial lawyers, Republican and Democratic lawmakers, state employees, the NRA to use his veto power to kill bills or slice out parts of the budget that they dislike.

Crist can sign, veto, or allow to become without law any piece of legislation that comes to his desk. Here's a guess on what he will do in the week ahead.

As the winds get ready to blow, there's still worries for Florida's backup insurance

On the eve of yet another hurricane season, the Florida Hurricane Catastrophe Fund probably could not cover all of its obligations,the fund advisory council concluded on Tuesday.

The fund is Florida's state-created reinsurance fund intended to provide low-cost backup financing for private carriers and Citizens Property Insurance Corp. Insurance carriers must purchase reinsurance from the Cat Fund in order to write homeowners insurance in Florida.

While the financial outlook for the Fund is a lot better than it was last October, it is estimated that the Cat Fund could probably borrow up to $8 billion in bonds to cover claims, leaving it with a potential shortfall of $11.5 billion to cover all of its obligations. (This is assuming that the Gov. Charlie Crist signs into law a recently-passed bill that whittles backs the size of the Cat Fund's exposure and requires carriers to pay higher costs to support the Fund.

"There is still a significant amount of uncertainty that the Cat Fund would face in the financial markets after a large event,'' said John Forney, the fund's financial advisor from Raymond James & Associates.

Crist, who will probably hear about the latest estimates at Wednesday's meeting with the Cabinet, said he had not heard about the latest Cat Fund estimates when asked on Tuesday. Crist did say that he still plans to sign HB 1495 - which also raises rates for Citizens - into law when it reaches his desk.

The Cat Fund will have $27.5 billion worth of exposure in the coming hurricane season. The potential shortfall would leave the Fund with almost enough to cover all the claims in its so-called mandatory layer - which is the coverage that all carriers must purchase. But this estimate means that the Fund would have difficulty raising money to cover its additional exposure know as the Temporary Increase in Coverage Limit. Carriers are under no obligation to purchase this coverage, but many do, including Citizens, the state's largest property insurance carrier.

But it would take a large storm the size of a Hurricane Andrew or Hurricane Katrina in order to generate the type of claims that would require this size of payout. And the Cat Fund does have an estimated $8 billion already in hand that it could use to pay out claims initially, buying it time before it would need to borrow additional money (including maybe from the federal government if Congress passes a measure authorizing it.)

Forney during his presentation did take a shot at what he called "Cat Fund bashing" on Tuesday, reminding the council that the Cat Fund has done its job of helping provide low-cost reinsurance and that its ability to assess every insurance policy in Florida gives its a way of repaying its debt that still makes it attractive to some in the bond market. The current shortfall is a result of the size of the Fund's exposure and the remaining fallout from last year's meltdown in the financial industry.

Forney said the bill lawmakers passed went a long way to improving the Cat Fund's financial health in the long run.