Legislative Update
DO NOT REMOVE
 June  2008

• $66 Billion State Budget Passed
• Battling The Budget
• Help for the Uninsured
• Insurers Restrain Some Health Scans
• Property or Sales Taxes - Voters Decide
• Up to the voters

 $66 Billion State Budget Passed

Florida lawmakers passed a $66 billion state budget that will include no pay raises for most state workers, a 6 percent tuition increase for university and community college students and steep cuts for many state services.

The 2008-09 budget, which takes effect July 1, reflects about a $4 billion drop in state spending. Beginning in the fall, public schools will have lost more than $900 million in funding compared to what they started with last year. A $14 million program that helps move state-supervised children from foster care into adoptive homes was eliminated.

The state's annual $100 million support for restoring the Everglades is gone.

Hundreds of positions were cut in the criminal justice system, including 199 jobs for probation officers.

Legislators will feel the effect by taking a 5 percent pay cut, or losing about $1,600 from their current $31,932 annual salaries.

Lawmakers said the budget was the best they could do given the sharp decrease in state revenue caused by a slowing economy.

It is a fact that Florida is in a recession, resulting in the worst government budget conditions in Florida history, which is also as bad for the people who are hurting even more.

NO HIGHER TAXES

Lawmakers feel they have created a budget that is balanced, and protects our main services. The budget contains no tax increases, nor does it rely on any expansion of gambling or heavy borrowing from state budget reserves.

Lawmakers did minimize the blow of some of the potential cuts by taking about $355 million from the Lawton Chiles Endowment Fund to help build up critical health care programs for some of the state's poorest and sickest citizens. The budget stops short of Gov. Charlie Crist's proposal for using more than $1.5 billion in budget reserves to help ease the financial pain.

As a result of that decision, one of the hardest hits areas will be public education. Based on a series of budget cuts that began last fall, public schools will have lost well over $900 million when classes begin this fall, which results to a $140 per-student funding drop.

The education budget also cuts in half what was once a $102 million annual program to partially reimburse teachers for the cost of training to receive National Board certification and to award bonuses to certified teachers who mentor their peers.

HEALTH CARE BUDGET

Nursing homes will lose about $167 million in Medicaid rate reimbursements. Hospitals will lose more than $255 million through lower rates. Child welfare programs eliminated a $14 million program that provides subsidies to families who adopt children from the state's foster care system.

There will be major job cuts in the criminal justice system. The budget eliminates 199 probation officer positions, although that was an improvement over a House plan that originally called for the loss of 500 jobs. Public defenders will lose 129 positions, while state attorneys will lose 259 positions, according to the agreement.

One of the few winners in the budget process was the Florida Highway Patrol, where troopers will be in line for a 5 percent pay raise on Oct. 1. Lawmakers approved the raise after hearing the agency was steadily losing personnel to other law enforcement agencies that can pay higher salaries.

Battling the Budget

With an eye toward November elections, lawmakers left the Capitol after 60 days of work with the vision of Floridians' unrest over reduced spending on education and social services.

A dismal economy that has dropped state revenues for two consecutive years led to the biggest spending cuts in well over a generation, leading to laid off teachers, closing schools, fewer probation officers and reduced services for the poor.

Republicans touted the $66.2 billion budget as the best possible in trying times. But Democrats ripped the GOP's intractable opposition to offsetting the cuts with expanded gambling or eliminated tax breaks for out-of-state corporations.

The budget cuts provided a dark silence for lawmakers who somehow made it through the 60-day session.

But they still worked it out in other areas. Lawmakers declined to require women to review an ultrasound before an abortion and turned down a law freeing teachers and students to debate alternative theories to evolution.

But they found time to amend the state song so racial references were removed, allow gun owners with a concealed weapons license to leave their weapons in their car at work, adopt the gopher tortoise as the 'official state tortoise' and debate, but ultimately defeat, a $60 fine for so-called 'Truck Nutz' a replica of testicles attached to vehicles as an adornment.

 Among the major changes:

A new state-run effort to provide basic health insurance coverage provided by private companies to the state's uninsured. Monthly premiums may be as low as $150 for stripped-down coverage.

Customers of state-run Citizens Property Insurance will continue to have their rates frozen through January 2010. But efforts to remove the liability on customers of private insurers to bail out Citizens in case of a catastrophic hurricane were defeated.

A greener energy plan for the state that would penalize utilities, that don't reduce greenhouse gases, and carry new emissions standards for cars and trucks.

Students will face higher education standards in core classes while the FCAT will become less critical in the grading of public schools.

But overshadowing the entire session was a recession-driven budget that was nearly $6 billion lower than last year. That 10 percent cut left state workers with no raises for the second straight year, hundreds of lost positions in everything from teachers to probation officers. Lawmakers crossed their fingers by taking money from savings accounts set aside for tobacco and increasing myriad fees on things like filing court documents to registering a boat.

In a symbolic move, lawmakers agreed to a pay cut of 5 percent from their $31,000 salary. But they did not touch their free health insurance provided by the state.
In all, more than 250 bills were approved and now face Gov. Crist's signature or veto despite a smaller government request preached by both parties.

But little was done to increase revenues or fix an inequitable property tax system. Instead, for the first time in recent history, property owners will pick up the majority of K-12 spending via property taxes instead of sales taxes controlled by the state. And education spending will drop nearly 2 percent in total.

 

To sum it up, legislators had options to do things in a better way, and this budget is going to inflict a lot of pain on a lot of people. When the people start realizing the impact of all this they’re not going to very pleased.

Lawmakers also cut higher education spending but relied on a proposed 6 percent increase in tuition to offset some of those cuts.

After a year of tenuous adherence to a fresh approach to bipartisanship, Democrats and Republicans lashed into each other.

On Thursday night alone, House Democrats and Republicans exchanged 10 press releases within three hours attacking the other with timeworn accusations.

Despite the high stakes, both the House and Senate devoted hours and hours of time to self-laudatory speeches as dozens of members leave due to term limits. The rambling reflections of lawmakers sometimes ran up to 90 minutes while the House lingered for many hours every day.

 Help for the Uninsured

The 2008 legislators approved the state's most ambitious attempt in more than a decade to help Floridians without health insurance, allowing the sale of policies starting at $150 a month, or less.

With passage of his Cover Florida plan, Gov. Crist has achieved in less than two years what his predecessor, Gov. Jeb Bush, could not do in eight: Give Florida's 4 million uninsured residents new options for coverage. At this time, one in every four Floridians under the age of 65 lacks health insurance, one of the highest rates in the nation.

Because people without insurance delay seeking care when they are sick and avoid screenings and checkups, they are 25 percent more likely to die prematurely than people with insurance or face financial ruin from an illness, an advocacy group estimated.

The main part of Gov. Crist's plan is that it exempts insurers from covering most of the 51 procedures or treatments they now are forced to cover by state law. That convinced insurance companies that they could afford to offer bargain-basement rates.

The plan requires coverage of annual checkups and mammograms and screenings for cervical and prostate cancer. Gov. Crist's plan also requires insurers to accept all patients, regardless of health status. Adult children can remain on their parents' health care policy until they turn 30. Residents will have to be uninsured for at least six months to buy a policy.

The plan includes a component that Gov. Crist did not like but was favored by House leaders. Florida Health Choices Inc., a new state corporation, would become a clearinghouse for insurers and other companies to sell health products, including insurance and prepaid health plans, to workers employed by businesses with 50 or fewer employees.

Although Gov. Crist said he did not want to spend any taxpayer money on the corporation, which will be run by a 15-member board of political appointees, the final bill allocates $1.5 million annually, and he has promised not to veto the funding.

Gov. Crist compromised in part because he needed the House to agree to simplify the approval process for new hospitals, and he needed votes for a bill making it easier to recruit dentists to treat Medicaid patients. He got both.

Consumer advocates warn that people may be getting less coverage than they need from the plan and the policies may not be an easy sell. There's also concern that employers will drop more comprehensive policies that they now offer employees in favor of the cheaper but less comprehensive plans.

Nonetheless, the governor and legislative leaders hailed the legislation as a model for the nation, though Gov. Crist could not predict how many of Florida's uninsured residents would enroll.

Insurers Restrain Some Health Scans

Insurance companies are taking a closer look at advanced medical scans like CT scans, citing spiraling costs and safety concerns. And some doctors agree there's emerging evidence that these scans are being over prescribed.

Because of cost increases in this area, quality and safety concerns are mounting, health insurers are requiring more pre-authorizations before patients can receive these scans, and setting other restrictions including mandates that the imaging equipment and medical staff operating it have proper credentials.

Insurers fear some patients are being exposed to dangerous radiation levels from having repeated CT and PET scans, which use many times the radiation of a regular chest X-ray. Sometimes scans are repeated because the first ones were not done properly.

Doctors are concerned about patients getting excessive radiation exposure when they receive scans that aren't needed or are ordered as "defensive medicine" to protect against lawsuits. There also is concern that a small number of unscrupulous doctors without adequate expertise are referring patients for tests in their own offices.

There is a concern that in-office imaging could lead to scanning for profit, but doctors say the bigger problem with medical imaging tests is the insurance red tape needed to get them.

 Another reason for increasing costs is that doctors sometimes order a diagnostic test that doesn't need preauthorization, even if it provides less helpful information than the one they prefer, then seek approval for a more advanced test if the first one shows it's needed.

Worse yet, sometimes patients end up getting a riskier, more invasive test than what they really need, for example, cardiologists wanting to assess blood flow and blockages inside a patient's heart arteries would prefer a nuclear cardiology test. With that, a small amount of a radioactive substance is injected in the blood and tracked using a camera.

Some doctors will instead order a cardiac catheterization, which doesn't require advance authorization. But that involves threading a catheter through a blood vessel up into the patient's heart that carries a 10 times higher risk of complications such as a heart attack or stroke.

The two doctor specialist groups are fighting improper use of scans by supporting accreditation of the machines and doctors using them and by publicizing criteria for quality and appropriateness of various imaging tests.

PROPERTY OR SALES TAXES-Voters Decide

Because of Floridians' anger over the economy's downward spiral, a state commission agreed to let voters decide whether they are willing to trade a 25 percent or more cut in property taxes in exchange for an unknown increase in sales taxes.

Few of the Taxation and Budget Reform Commission's 25 members embraced the "tax swap" as a perfect idea. But in an 18-7 vote, most commissioners said they felt obligated to provide some sort of major property tax cut after meeting for 13 months.

Florida residents said that they wanted a break in their property taxes, because of gas prices on the rise toward $4 per gallon people can't afford to drive to work, they're going to lose their jobs, they're going to lose their homes. They expect the commission to do something about it.

If 60 percent of voters approve the plan in November, the "tax swap" will eliminate the portion of all property taxes currently required by the state to supplement K-12 education funding. That's about $9 billion a year and would cut property taxes by an average of 25 percent for all property owners. There was no debate Thursday on the plan's disproportionate benefit for businesses who stand to save the most. It also contains a new cap on annual assessment increases for businesses and part-time residents of 5 percent annually.

The plan also requires the Legislature in 2010 to come up with a way to maintain education funding, suggesting that the sales tax can be raised by up to 1 cent or that the sales tax exemptions for products and services could be removed.

That was the largest source of opposition to the plan, led by businesses who fear things like accounting, lawyer fees, advertising and other services could be taxed and drive employers out of the state.

Business and education groups are also leaning toward opposing the plan because it creates an uncertain future. If voters approve the plan, lawmakers will not decide how to replace the $9 billion in education funding until 2010 and the swap would not take effect until 2011.

But even if supporters' vision of the plan's popularity is accurate, it will still face the cold mechanics of a brutal campaign led by well-heeled business groups. The first step will likely be a lawsuit to boot the amendment from the ballot, though the basis for a lawsuit is not clear.
Associated Industries of Florida, one of the state’s largest business lobbying groups said there are some lawyers that will take this case on to try to help us make sure this doesn't go on the ballot in November."

And opponents are already deriding the plan as the largest tax increase in state history due to almost-certain hikes in sales taxes if the plan is approved.

Proposed amendments to force school districts to spend 65 percent of their money "inside the classroom" and allow the state to use taxpayer money to pay for vouchers to send children to private schools were not on the agenda. But they were resurrected amid some controversy before a final vote was delayed on the two items until today.

Up to the voters

This coming Nov. 4^th Florida voters will have many proposed amendments to vote on.

Voters will have to decide one of the most closely watched presidential elections ever. And all 120 state House seats are up for election, plus half of the 40 seat Senate. Not to mention local elections.

But that's not all. The statewide ballot also contains nine proposed amendments to the state Constitution ranging from a ban on gay marriage to a fundamental change in how public schools are funded.

Here's a summary of those ballot items, in order of appearance on the ballot:

1. Repeal "Alien Land" Law

Would delete from the state Constitution language allowing the Legislature to regulate or prohibit property ownership by aliens ineligible for citizenship. From 1862 to 1965, more than a dozen states passed laws restricting Asian immigrants from owning property. Most states did away with the laws, but Florida has yet to do so.

2. Gay marriage ban

Would define marriage as the legal union of only one man and one woman as husband and wife. Florida already has such a law, but backers say putting it in the Constitution protects from legal challenge.

3. Energy/hurricane tax break

Improvements on residential property for energy efficiency or windstorm protection wouldn't be subject to property tax assessments.

4. Conservation, land tax break

Land held in perpetuity for conservation would be exempt from property taxes, and other conservation lands would be taxed on their current use rather than their "highest and best," or potential use.

5. Tax swap

Would reduce overall property taxes by about 25 percent by eliminating most property taxes for schools in 2011. To replace the more than $9-billion, lawmakers would have to increase the sales tax, eliminate sales tax exemptions, extend taxes to services such as lawyers or cut other state spending.

6. "Working waterfront" tax break

Would provide a property tax break for waterfront businesses such as marinas and boat repair shops that do not intend to convert to a more lucrative use, such as condominiums.

7. Repeal ban on funding for religious organizations

Would remove "Blaine Amendment" from the state Constitution, a century-old ban on funding for religious groups. In 2004, an appellate court cited the provision in rejecting then-Gov. Jeb Bush's school voucher program.

8. Community colleges

Would allow local option sales taxes to support community colleges if approved by local voters.

9. School funding vouchers

Orders that 65 percent of school funding go toward classroom instruction. Changes a provision of the state Constitution to allow private school vouchers.

Tony Kiwak, FLARA Legislative Director

Tony Fransetta, President, FLARA