The Fine Print

Could any of these bills get vetoed by Gov. Rick Scott?

Gov. Rick Scott on Wednesday will sign several bills that consist of the "jobs agenda" that he outlined last fall.

And that's when it will start to get interesting.

There have been few surprises so far since the 2012 session ended. Scott signed the "inspirational messages" bill and this latest batch of legislation includes an overhaul of the unemployment compensation system and tax breaks, including another small cut of the state's corporate income tax.

But in the next few weeks Scott will sort out the remaining bills from this year and figure out whether or not he plans to go along with many of the ideas that his GOP colleagues in the Legislature acted on.

Not counting his budget vetoes, Scott last year vetoed 10 bills sent to him by state lawmakers, which is actually on par, or even a little bit below other governors in recent years.

Gov. Charlie Crist - who was at war with lawmakers during his independent bid for U.S. Senate in 2010 - vetoed 17 bills his final year in office (several of which were later overridden) and 18 bills in 2007. Back in 2005 then Gov. Jeb Bush a.k.a. "Veto Corleone" nixed some 36 bills sent to him by the Legislature.

It was Bush who told Scott in an email before he became governor that it was okay to veto "stupid bills."

Here then are some bills to watch Scott on in the next few days and weeks:

HB 5301: Back when Scott was campaigning against Bill McCollum in the GOP primary in 2010 he actually came out against what he called mandates being imposed on local governments. Scott told a group of business leaders in Panama City that he did not support strict limits on spending and taxes for local governments, saying at the time "I believe that what Tallahassee should be doing is dealing with Tallahassee issues." 

But sitting on his desk is a budget conforming bill that contains a contentious provision that withholds money from counties in an effort to collect $325 million in contested past-due Medicaid billings. County governments have argued this is yet another mandate, an argument that should have some resonance with Scott.

This legislation, however, includes several other changes, including a limit on how many times Medicaid will pay for hospital emergency room visits for non-pregnant adults and a provision that would allow the children of state employees to be enrolled in the state's subsidized KidCare program. Scott must act on this bill this week but there are signs that he will let it become law because it is tied to the state budget. (UPDATE: Scott signed the bill, although in a letter the governor tried to assuage counties that the state would "work diligently" to make sure that all the billings are valid and accurate. Counties, meanwhile, sharply criticized the decision as a "body blow" to taxpayers.)

HB 7129: This is the tuition bill for the University of Florida and Florida State University. If it becomes law the legislation would allow these two research universities to raise tuition annually above the existing 15 percent cap that now exists in state law. The logic behind the bill - which was a top priority for House Speaker Dean Cannon - is to give UF and FSU the financial resources to make themselves more nationally competitive. But the bill also clashes with Scott's oft-repeated line that tuition should not go up this year and that universities ought to give him more examples of spending existing money wisely before hiking tuition. (UPDATE: Scott vetoed this legislation saying it would increase the debt burden of students.

SB 1994: The Florida Polytechnic University bill. This is the legislation pushed by Sen. J.D. Alexander that would officially divorce the Lakeland branch campus of the University of South Florida and turn into the state's 12th public university. Scott so far has refused to take a stance on the creation of a new school, but has expressed skepticism about it. The problem for Scott, however, is if vetoes the bill then he wipes out $16 million in funding, including $6 million for the USF College of Pharmacy and $10 million to allow current USF Polytechnic students to complete their degrees at USF. (UPDATE: In a bit of surprise, Scott signed this legislation into law.)

HB 7117: This is an energy bill that was championed by Agriculture Commissioner Adam Putnam. But the legislation - which includes $16 million in renewable energy tax credits - has come under fire by several different groups, including conservative organizations as well as the Florida Renewable Energy Producers Association. Scott during his first two years in office has continued to be skeptical about energy issues, although his main objection has centered around proposals that would raise utility bills in order to pay for renewable energy. (UPDATE: Scott signed this law although he expressed concerned about some of the provisions.)

HB 5011: State Information Technology. For most people outside of Tallahassee, this bill means little. But it's a big deal for the lobbyists and others who make a living off the millions spent by the state on technology. This bill blows up an existing state agency - the Agency for Enterprise Information Technology - and creates a new agency called the Agency for State Technology which reports to the governor and Cabinet. For those who aren't keeping count this would be the third reconfiguration of how the state handles technology issues in the last decade. The legislation also halts and repeals an already begun process to consolidate the state's email service. Rep. Denise Grimsley, the House budget chief, defended the move to get rid of the email consolidation, contending it would wind up costing the state more than anticipated. But it's worth pointing out that Scott himself early on wondered aloud why state government had multiple email accounts as opposed to the way that most businesses handle it. (UPDATE: Scott vetoed the bill.)

HB 945: Broadband Internet Service. This is another bill that not a lot of people kept an eye on. It transfers a federal stimulus-backed program from one state agency to another. But the legislation was pushed into law at the urging of lobbyists who work for a vendor that held a state contract that was not renewed. The Associated Press already reported that the legislative proposal was so closely aligned with the lobbying firm of former Republican Party of Florida chairman Al Cardenas that the Senate bill sponsor referred questions about the bill to a lobbyist working for Cardenas. That same AP story pointed out that the state agency now in control of the program has warned internally that the transfer will require federal approval and could put millions in federal grants in jeopardy. (UPDATE: This bill was signed by the governor.)

HB 937: Legal notices. Just consider this one a bit of a hunch. Scott of course famously shunned newspaper editorial boards during his 2010 campaign for governor. But since that time he has actually taken a keen interest in the news industry, including recent business moves in Florida such as the decision by Halifax Media to acquire papers owned by the New York Times Company. This legislation is aimed at ending a few years of battle over the future of legal notices. The bill requires the online listing of legal notices for no extra charge, but also keeps them in printed newspapers. In previous years legislators had tried to end the use of printed legal notices completely. The final product is supported by the Florida Press Association so it will be interesting to see how the governor responds.

Rick Scott's incomplete grade

Gov. Rick Scott - who has billed himself as Florida's jobs governor - says repeatedly that he receives a new grade every month when Florida's unemployment rates are released.

But maybe the grade Scott should get in his first year in office is an incomplete.

Why?

Because it turns out that the numbers that Scott relies on are nothing more than preliminary estimates based on a survey of 2,500 households.

Additionally, it is likely that the numbers will be changed in March.

Here's the full story on the benchmarking and process changes that could mean that the 2.1 percentage drop that Scott has praised may be inaccurate.

As the story points out economists and others who follow unemployment data know that the numbers are subject to revision.

Some of these changes are small, yet other revisions are quite substantial. For example, the reported unemployment rate in March 2010 was 12.3 percent. In March 2011 that rate was substantially changed and lowered to 11.3 percent.

Because of the change the December 2010 unemployment rate of 12 percent is now listed as the highest on record. (State unemployment rates date back to the '70s.)

Here's a look at how much the numbers changed the last two years from what they were initially reported.

Florida Unemployment Rates (seasonally adjusted)
Before Benchmark Compared to After Benchmark January 2009 to December 2010
	Unemployment Rates
Month/Year	Before Benchmark	After Benchmark (current)
Jan-09	8.7	8.5
Feb-09	9.2	9.0
Mar-09	9.6	9.4
Apr-09	9.9	9.7
May-09	10.2	10.0
Jun-09	10.5	10.2
Jul-09	10.8	10.5
Aug-09	11.0	10.6
Sep-09	11.2	10.8
Oct-09	11.4	10.9
Nov-09	11.6	11.1
Dec-09	11.7	11.2
Jan-10	12.0	11.3
Feb-10	12.2	11.3
Mar-10	12.3	11.3
Apr-10	12.0	11.3
May-10	11.7	11.3
Jun-10	11.4	11.4
Jul-10	11.5	11.5
Aug-10	11.8	11.6
Sep-10	11.9	11.7
Oct-10	11.9	11.8
Nov-10	12.0	11.9
Dec-10	12.0	12.0
Source:  Florida Department of Economic Opportunity, Labor Market Statistics Center, Local Area Unemployment Statistics Program, in
cooperation with the U.S. Department of Labor Statistics, Bureau of Labor Statistics.

When you look at the numbers, you realize that Scott's reliance on them may be a bit premature.

And these changes have nothing to do with the debate of actual workers vs. discouraged workers. For example, Florida's 9.9 percent unemployment rate is actually 10.8 percent if you include discouraged workers into the equation.

Now it is worth noting that a separate figure highlighted by Scott - the actual growth in the number of jobs - is derived from a separate survey of businesses. State economists say that between 10,000 to 15,000 businesses are questioned to get an idea on whether jobs are being added or lost.

While economists know these numbers are subject to change, they have gained a political currency in the last few years.

Former Gov. Charlie Crist, for example, praised a reported drop in unemployment that occurred in April, May and June of 2010. The new data shows that the drop never happened and in fact the unemployment rate remained flat in the spring of 2010 before climbing back up.

This allows Scott to say - as he has a couple of times now - that jobs were lost for "four straight years" until he came into office.

The question now is whether the revised numbers for 2011 will be as good as Scott has advertised them.

 

 

 

 

Big tax hike could hamper Gov. Rick Scott's push for jobs

In a series of recent stump speeches, Gov. Rick Scott has emphasized that his goals remain simple: Keep down the cost of living, create jobs and improve education.

Scott's agenda for 2012 includes a smattering of additional tax cuts and a continued drive to eliminate regulations that could be holding back growth in a state that is dealing with 10.6 percent unemployment.

But now there's a big tax hike on the horizon that could hamper his plans.

For two years, state lawmakers have pushed back significant hikes in the state's unemployment compensation taxes.These are the taxes that are used to help pay benefits to the nearly 1 million people out of work.

But preliminary figures released Thursday show the minimum tax rate for employers is expected to jump from $72.10 per employee to more than $170 per employee. The maximum rate is also expected to rise from $378 to $459 per employee.

"This is a big deal," said David Hart, executive vice president of the Florida Chamber of Commerce. "The last thing we ought to be doing is putting additional burdens on employers."

Here's the full story about the tax hike.

So far neither Scott nor the Republican-controlled Legislature has talked much about this. Even the Chamber itself gave the issue only a brief mention in its 2012 list of priorities.

But Hart himself says discussions are already underway to try to convince state lawmakers that something needs to be done to "soften the burden."

It's not as if this is surprising since lawmakers nearly two years ago delayed another big tax hike. But back then the hope was that the economy would have turned around enough by 2012 so that employers could afford the higher costs.

One of the ways the state could ease the burden on employers is by rolling back some of the planned tax increases, but the downside is that it extends the amount of time it will take the state to pay back the federal government.

Right now the state owes $1.7 billion in loans that were used to keep the unemployment compensation trust fund solvent since 2009.

This year business owners paid a special assessment to cover interest that is now owed on the outstanding balance. But there's an additional penalty if the state does not promptly repay the federal government: The loss of federal tax credits. (Right now employers get a tax credit for their state unemployment taxes that is deducted from federal taxes they owe.)

Scott, who rolls out his 2012 budget proposal in early December, could offer to have the state to pay the interest charges in the coming year if the big tax hikes are delayed yet again.

But the problem for the governor is he is dealing with a projected budget shortfall that ranges - depending on who you ask - from $1.2 billion to $2 billion.

The question for the governor and the GOP-controlled Florida Legislature is whether or not the unemployment compensation tax hike rises to the level that it trumps other budget and tax considerations.

Would Scott, for example, go along with helping stall the unemployment tax hike which will affect nearly 460,000 businesses across the state in exchange for backing off his push for another small cut in the corporate income tax that he has vowed to eliminate in seven years?

Or does Scott come up with enough cuts to accommodate the shortfall, the tax cuts he has already proposed, as well as take care of unemployment tax hike?

Mark your calendars: On Dec. 8 we should know the answer.