The 2009 legislative session kicked off on March 3 with Florida lawmakers facing a very bleak economic forecast. House and Senate members would have 60 days to debate and vote on legislation, as well as the budget for Fiscal Year 2009-10. Legislators spent much of January and February in committee meetings discussing what would become the main issues for debate during session and bracing for the difficult task of balancing the state budget in a time of severe economic downturn.
On March 13, less than two weeks after the beginning of session, the state Office of Economic and Demographic Research held a revenue estimating conference, which revealed a $6 billion budget shortfall for Fiscal Year 2009-10. As a result, many options for increasing revenue were now on the table, including implementing new taxes, increasing existing taxes and fees, repealing sales tax exemptions and closing certain tax loopholes. Legislators also had to make decisions about how to incorporate federal stimulus dollars from the 2009 American Recovery and Reinvestment Act into the budget for the coming year. Many lawmakers were apprehensive about using temporary funds for recurring projects, as well as the possible implications of taking federal aid. These issues were discussed and debated throughout March and April.
As session was drawing to a close in late April, it became clear that it would be very difficult for members to put forth a final budget by the deadline, as the House and Senate plans were still very far apart. The Senate budget incorporated increases in fees and other revenue sources, while the House plan was more conservative, making spending cuts to existing programs rather than looking for ways to increase revenue. On April 28, Senate President Jeff Atwater (R-North Palm Beach) and House Speaker Larry Cretul (R-Ocala) announced that the two chambers had come to terms and released a budget conference schedule. Because of the late date, session was extended one week, to end on May 8, in order to give conference committees time to work out differences in the plans and produce a final budget to be laid on members desks.
On May 4, House and Senate lawmakers concluded budget discussions and decided on a plan to balance the $66.5 billion budget with economic stimulus funds, fee increases, a cigarette tax increase, shifting trust funds from the purposes for which they were intended, such as transportation, into other programs and cutting spending in nearly all areas of state government.
Legislators raised fees on drivers’ licenses, hunting licenses, court costs and many other government services to the tune of about $800 million, emphasizing that fees were not taxes and asserting that they had not gone back on pledges to resist tax increases. The tax on cigarettes was raised by $1, bringing the total to $1.34 per pack and netting the state nearly $1 billion. Fee increases will have the biggest impact on motorists, with annual registration fees going up by 35 percent, and the fee for initial and renewal drivers’ licenses nearly doubling.
A total of $5.3 billion, nearly eight percent of the 2009-10 budget, will come from federal stimulus dollars. The biggest share, a total of $2.7 billion, will go to education programs for K-12 per-student funding, as well as community colleges and state universities. The budget also includes $1.7 billion for health and human services programs, such as Medicaid and food stamps, $390 million for natural resource programs, $432 million for transportation and highway projects, $375 million for workforce training programs and $110 million for public safety.
The final budget is the result of a very difficult compromise between the two chambers. The decisions to increase fees to raise revenue, make cuts to already cash-strapped programs and utilize stimulus funds for recurring projects have some members dissatisfied with the final plan. Members headed back to Tallahassee to cast a final vote on the $66.5 billion budget today.
One of the most contentious issues this session was the gaming compact between the state and the Seminole Tribe of Florida. House and Senate members spent much of session in opposition on the issue, but finally came to terms this week. The House’s much more conservative approach to the compact seemed to prevail, with gambling expansion provisions scaled back considerably. The final plan will net the state a minimum of $150 million in annual revenue from the Seminole Tribe and will allow the state to use an additional $150 million currently set aside.
Property Taxes and Other Local Issues
Lawmakers passed several pieces of legislation this session relating to property taxes and other local issues. The legislature offered property tax relief to new homebuyers and commercial interests by passing legislation to allow voters to decide on an amendment to give first-time home-buyers an exemption on the first 25 percent of their property taxes. The exemption would be phased out over five years. This amendment will be placed on the November 2010 ballot. Also on the 2010 ballot is an amendment that would cap assessment increases on commercial property at 5 percent. While this legislation will provide relief to some, it may also create problems for businesses in Florida.
Lawmakers passed “burden of proof” legislation which will apply to property appraisers and provide more fairness to taxpayers in the appraisal process. House and Senate members also passed legislation regarding impact fees. The new law will require local governments to prove certain elements of impact fees by preponderance of evidence in any action of challenging a fee. Controversial language which would have placed a statewide two-year moratorium on the collection of impact fees was stripped from the bill.
There was also legislation passed to allow counties, through voter referendum, to levy an option sales tax of up to 1% for emergency fire rescue services and facilities. In addition, legislators gave school boards the ability to increase school property taxes by a super-majority vote. The increase would come to $25 per $100,000 of assessed value. Members did not pass controversial legislation which would have limited the growth of state and local revenues and required voter approval of tax increases on spending over that limit.
Lawmakers gave school districts a slight boost by increasing per-student funding by $28, but this number is still $256 less than it was two years ago. Making changes to the state’s class-size requirement was an issue that received much debate this session, but the legislation ultimately failed. A bill which would have increased math and science requirements for Florida high school students failed as well.
One of the most important education proposals this session, backed by Governor Crist, would allow state universities to increase tuition rates. The measure, which increases the base tuition rate by eight percent and gives all 11 state universities the ability to add another seven percent, was ultimately successful and will now be sent to the Governor’s desk for signature. In addition to raising revenue for universities, the goal is to get Florida tuition, which is currently among the lowest in the nation, up to the national average.
Lawmakers decided not to pay the additional 15 percent for students receiving Bright Futures Scholarships, which have paid for 100 percent or 75 percent of tuition, depending on the student’s high school grades and test scores.
Ultimately, the cuts to the state higher education budget were substantially less than many had feared. The original House plan proposed $440 million in cuts, but the total reduction ended up around $211 million.
Several pieces of legislation to boost state economic development programs passed this session. Under new law, the state Department of Environmental Protection and water management districts will create a 45-day expedited permitting process for businesses identified by a municipality or county as a target industry business. This applies to wetland resource and environmental resource permits only. Lawmakers also passed legislation to create the Florida New Markets Development Program, which provides up to $20 million per year in state tax credits for investments in low-income communities. There was also legislation to direct $3.3 million in Quick Response Training grants for businesses to provide skills training for newly created jobs.
House and Senate members spent a considerable amount of time discussing changes to the state’s growth management laws. The changes are intended to encourage growth in urban areas by relaxing current requirements. The legislation eases existing requirements for developers to pay for transportation improvements and eliminates state review on the impact large-scale developments would have on neighboring counties. The original language made significant and sweeping changes to current law but was scaled back due to contentious debate from environmentalists as well as the state Department of Community Affairs.
Energy and Environment
Senator Jim King (R-Jacksonville) sponsored significant legislation to define clean and renewable energy in Florida, but the bill ultimately did not make it through the House. The legislation would have created the Florida Clean Renewable Energy Act and would have established a goal for 15 percent of the state’s power to be derived from clean energy by 2020.
Speaker-designate Dean Cannon (R-Winter Park) introduced and won speedy House approval of a plan to allow drilling for oil and natural gas within 10 miles of the Florida coastline. Representative Cannon included a provision to allocate funds from drilling exploration proceeds to the struggling Florida Forever program. The Senate, however, refused to take the measure up. The drilling plan, which is advocated by the energy industry and many business interests, will likely be a major issue next year. Ultimately, lawmakers kept the Florida Forever program alive by moving forward $250 million in bonding authority to acquire property.
Lawmakers also passed legislation to implement Amendment IV, which won voter approval last year. Under the new law, landowners can receive an ad valorem tax exemption for land dedicated in perpetuity for conservation purposes. Members also included a provision in the bill for land under a conservation plan to be assessed based on use.
Legislation addressing the controversial Low Income Pool (LIP) Council, which recommends allocations of Medicaid payments to hospitals throughout the state, was successful this session. Many have been critical of the LIP Council because of allegations that it favors special interests. The original language would have abolished the council altogether, but was scaled back and will now increase membership and oversight, as well as limit the appointing of lobbyists to the council.
Legislators also passed a measure regulating the dispensing of certain addictive prescription drugs. The legislation creates a statewide database where these prescriptions will be reported. The intent is to keep narcotics abusers from getting large numbers of addictive drugs from multiple sources.
In a major health care decision, lawmakers expanded the KidCare program, which provides health care coverage to needy children in Florida. The program will now cover about 46,000 more children.
Legislators refused to expand the Medicaid reform project in five counties, a move that could cost the state $300 million in federal hospital funds if the project is not expanded statewide by the 2010-11 budget year. State officials said they will seek a waiver.
This legislative session proved to be one of the most difficult in recent years, mostly due to the current economic downturn and looming budget shortfall. In total, 238 bills passed both the House and Senate during the 2009 session. This number was considerably less than usual. The bills that did pass will now be sent to the Governor for signature. Once a bill is placed on the Governor’s desk, he has 15 days to either sign or veto. If he has taken no action on a bill within that window of time, the bill will automatically become law.