2011 Post-Session Legislative Update

Last week state lawmakers wrapped up what turned out to be a contentious and difficult legislative session. After more than 12 hours of debate, and a formal extension of session beyond the midnight deadline, the House and Senate adjourned Sine Die at around 3:30am Saturday morning, officially bringing the 2011 session to a close. This was one of the most hectic sessions in recent memory. While there were many important topics on the table this year, the session was dominated by a few key issues – balancing the state budget, which is the only task the Legislature is constitutionally required to complete, and reforming key state programs like Medicaid and the Florida Retirement System, as well as a number of other matters. The session was extended due to political in-fighting between the House and Senate. Members debated budget conforming bills (which seem to be becoming more prevalent) and a tax relief measure, amended late to include controversial gaming language, into the early hours of Saturday morning, before finally bringing the session to a bitter finish.

There were a number of other key bills passed this session, making changes to the state’s unemployment compensation system, growth management and permitting laws, Medicaid and medical malpractice and abortions.

There were several philosophical differences between the legislative and executive branches this session, making for a contentious 60 days. Governor Scott proposed several conservative policies and reforms, which were not always in line with that of House and Senate leadership. While many believed the Governor’s recommendations went too far and therefore would not meet with success, the Governor ended up achieving several of his goals when the session wrapped up last week, including overhauling the state’s pension system, implementing several education reforms, reorganizing the state’s economic development agencies and enforcing drug testing for state welfare recipients. In addition, lawmakers made changes to the state’s Corporate Income Tax system – a measure heavily supported by Governor Scott. One issue pushed by the Governor but not passed was a controversial immigration reform bill, which was not taken up on the House floor.

Budget

Lawmakers returned to Tallahassee after the Easter holiday break with the difficult task of balancing the state budget with a shortfall of nearly $3.8 billion. Initially, it seemed that the two chambers would be unable to come to terms on a budget deal. However, lawmakers agreed to spend the last two weeks of session working through the budget conference process. Members then released agreed-upon budget allocations, assigned budget conference committees, and started working to finalize a nearly $70 billion state budget for Fiscal Year 2011-12, which begins July 1st.

In the end, the budget was cut by nearly $4 billion. This marks the fifth consecutive year that state employees will go without pay raises. Of the roughly 4,529 state positions that were eliminated, it is estimated that about 1,300 positions are currently occupied. The budget also includes roughly $300 million in tax and fee cuts, including a $30 million Corporate Income Tax cut – a provision pushed by Governor Scott. In addition, the budget includes cost savings from an overhaul of the state’s Medicaid program, as well as a reduction in Florida’s Bright Futures scholarship program.

The budget also included an overhaul of the state’s pension system. This overhaul included heavily debated provisions requiring nearly 655,000 teachers, police officers, firefighters and other state workers to contribute three percent of their salaries to their pension funds. The reform also includes an increase in the standard retirement age for regular state employees from 62 to 65, or 30 to 33 years of service for employees enrolled in the Florida Retirement System after July 1st. For police, firefighters and corrections workers, the standard retirement age is increased from 55 to 60, or the minimum services requirement from 25 years to 30. Lawmakers did end up keeping the Deferred Retirement Option Plan (DROP), but lowered the interest rate for those joining after July 1st.

In addition, lawmakers made cuts to a number of health programs, including hospitals and nursing homes.

Health Care

One of the biggest issues addressed by lawmakers this session was a move to overhaul the state’s complicated and expensive Medicaid program. Throughout the session, House and Senate members disagreed on exactly how the reform should be shaped and implemented. Both chambers spent most of session working on their respective proposals but both had the same goal – to move beneficiaries into managed-care plans. Members debated the issue until the very end of session, but finally managed to pass a bill. The final plan includes moving the majority of recipients into managed-care plans, which will be divided into 11 regions throughout the state. The managed-care plans will compete for contracts and build networks of doctors and hospitals. While the plan could potentially save the state billions, it now needs to be approved by the federal government. The federal Medicaid waiver, which would be required before implementing any of the reforms, is a long, complex process and may make putting the new system into place very difficult.

The other landmark health care legislation this session addressed the state’s “pill mill” debate. Prior to session, Governor Scott proposed repealing a measure to create a Prescription Drug Monitoring Program in Florida, which was aimed at combating the state’s illegal prescription drug use and abuse problem. While the Senate opposed the Governor’s call for a repeal of the database, the House was supportive, and even took the issue a step further, proposing a ban on physician dispensing of certain controlled substances in Florida. The Senate remained steadfast throughout session that it would not ban physician dispensing, but in the waning hours of session, with the help of a deal brokered by Attorney General Pam Bondi, reluctantly agreed to the House’s position.

The Republican-controlled Legislature also passed four bills relating to abortion, including a measure requiring women to have ultrasounds prior to undergoing an abortion procedure, a bill enforcing stricter parental notification requirements and a bill banning abortion coverage in certain insurance policies. In addition, lawmakers paved the way for a 2012 ballot proposal that will formally prohibit tax payer dollars from paying for abortions.

Education

Lawmakers kicked off the session with the reintroduction of an education measure to base teacher pay on student performance. The proposal, which was similar to legislation passed last year but vetoed by Governor Crist, sets up a new merit-based pay system for all teachers hired after July 1, 2014. The measure received a tremendous amount of support from Governor Scott and was quickly signed into law in late March.

Education programs were reduced by a funding cut of $1.1 billion. The Legislature cut per-student spending by an average of eight percent, or around $542 per student. Lawmakers also passed policy reforms to privately-run charter schools, allowing “high performing” charter schools to expand with less oversight from school districts. In addition, members expanded virtual school options and school voucher programs.

In a controversial move, lawmakers passed a measure to exempt certain classes from the state’s current class size requirements. The bill also gives schools the flexibility to exceed constitutionally mandated class size caps under certain circumstances.

On the higher education front, lawmakers approved a measure implementing many priorities outlined by the Board of Governors. The legislation requires the Higher Education Coordinating Council to make recommendations on new state universities or campuses. The bill also includes provisions regarding Advanced Placement credits, summer enrollment and other issues of concern to Florida’s higher education institutions.

Energy and Environment

While key energy legislation was introduced this session regarding utilities and the recovery of renewable energy costs, it eventually died in the Senate. Lawmakers proposed a measure for the third year in a row to allow Investor-Owned Utilities to recover the costs of renewable energy projects, build renewable energy facilities and purchase renewable energy. The bill was pushed by Florida Power & Light, but had a large amount of opposition because of the potential effects on already-strapped consumers. Of nearly 30 energy-related bills this session, this was the only one to gain traction. It passed through the House and Senate energy committees, but was ultimately killed by Senate Budget Chair J.D. Alexander (R-Lake Wales).

Lawmakers did pass a controversial measure this session that will ease environmental permitting requirements for developers in Florida. Environmentalists were heavily opposed to the bill. Under current law, if a developer’s environmental permit is challenged, the developer has the burden of proof. The measure passed this session will shift the burden of proof to the person or group challenging the developer. Republican proponents argued that easing restrictions would allow for more job creation.

Transportation

There were two big transportation bills this year – Representative Jeff Brandes’ (R-St. Petersburg) HB 1363 and Senator Jack Latvala’s (R-St. Petersburg) SB 1180. Both bills contained a number of provisions relating to the powers of the Florida Department of Transportation and general transportation policy throughout the state. The House bill passed through the chamber unanimously, but was heavily amended throughout the process. The Senate legislation passed through committee process, but was never taken up on the floor, and therefore HB 1363 became the main vehicle. Nearly every year, there is a large transportation package usually taken up the final day of session. Because the transportation bill is typically amended continuously throughout the process, it sometimes becomes so heavily weighted that the House and Senate cannot come to terms on the specific provisions, or the bill becomes a victim of bargaining between the two chambers and never makes it through final passage. Unfortunately, this was the case with this year’s transportation bill as well.

Seaports

Lawmakers had a heightened focus on ports this session, with several bills filed in both chambers pertaining to port improvement and development, and a pushed for increased funding for Florida’s public seaports. Florida ports were actually one of the foremost transportation investment priorities for House and Senate leadership.

A number of measures were passed pertaining to ports in the final days of session, including a move to streamline Florida’s seaport security standards as well as efforts to ease permitting requirements and create master plans for port projects. In addition, despite the contentious end of session, the two chambers reached a consensus on funding levels for seaports and intermodal projects. Governor Scott’s continued support for Florida ports and economic development projects should ensure that these bills and funding provisions make it successfully through the veto process.

Growth Management

Lawmakers passed a measure this session nearly that nearly completely reverses almost 30 years of state growth management laws. The bill repeals the law passed in 1985 that requires developers to factor the impact of projects on the community and environment. It also This measure was supported by Governor Scott, who touted it as an economic development and deregulation effort.