The Corcoran Report: May 2011

Legislative Session Highlights

Florida's regular legislative session concluded in the early morning hours of Saturday, May 7th.

During the 60-day session, Florida's Legislature passed less than 300 pieces of legislation, much of which fundamentally changes significant elements of Florida government. The changes include statewide Medicaid reform, economic development restructuring and reorganization, a state government spending cap, reduction of the corporate income tax for almost 15,000 Florida businesses, changes to property insurance coverage and rates, unemployment compensation, and changes to Florida's growth management laws.

The only constitutional requirement of the session, passage of a state budget, occurred during the final hours and Florida's Legislature passed a $69.7 billion budget for fiscal year 2011-2012. This budget includes more than $3.5 billion in cuts, pension and benefit changes for state employees, reductions in the state employee workforce of more than 4,500 positions, and elimination of another 1,500 funded, unfilled employment positions.

Key Issues

Unemployment Compensation: Florida's Legislature passed HB 7005 making it easier for business to win claim disputes in court and requiring those receiving unemployment compensation to undergo a skills analysis as well as prove they are seeking work from at least five employers per week. Additionally, the legislation cuts the number of weeks for UC from 26 to 23 weeks and ties UC benefits to the state unemployment rate. If unemployment statewide drops below 10.5%, the number of benefit weeks is also reduced. The legislation will not cause changes to the UC tax rate until 2012.

Corporate Income Tax: The Legislature passed HB 7185, which raises the exemption level for corporate income tax from $5,000 in net income to $25,000 in net income. The change is expected to impact almost 15,000 Florida businesses and will reduce taxes in an average tax break of $1,100 per business. A separate tax credit bill - HB 143 - allows multi-state corporations to shield some of their corporate tax liability if they spend $250 million or more on capital expenditures.

State Spending Cap: SJR 958 places a proposed constitutional amendment on the ballot in 2012. If approved by voters, future growth in state revenues would be limited to a formula based on population growth and inflation. If the state collections exceeded the cap, funds would first be used for the state's budget stabilization fund and then to reduce school property taxes.

Economic Development: SB 2156 creates a new department to oversee the state's economic development efforts. The Department of Economic Opportunity will collapse the Agency for Workforce Innovation and the Department of Community Affairs, as well as the Office of Trade, Tourism and Economic Development, into one agency. The measure also consolidates various public/private partnerships, including Enterprise Florida, Visit Florida and Space Florida, under the Enterprise Florida board. Additionally, HB 7205 creates a new state trust fund to be used for economic development efforts.

Property Insurance: SB408 passed the Legislature and awaits the Governor's signature. This change could result in rate increases of up to 15% per year.

Medicaid Reform: Costing the state close to $22 billion annually, Florida's Medicaid program has grown at a much greater rate than other elements of the state budget. Lawmakers passed legislation that will provide a managed care approach for Medicaid and will transition most Medicaid recipients into a managed care program. This contrasts with the current fee-for-service program, which essentially reimburses health care providers whenever a Medicaid recipient seeks health care. Lawmakers hope this managed care approach will help control health care costs and will establish a more level cost growth pattern for the program.

Florida's Legislature passed fewer bills than typical this session; however, more impactful legislation was considered and passed this year than in previous years. It is clear: The focus of Florida's government has changed course to more reflect business-oriented practices.

We appreciate the opportunity to continue serving you, the members of the Community Papers of Florida. We welcome your input and questions and appreciate your feedback. As always, if you have specific questions or need assistance with an issue, please do not hesitate to contact your association staff and we will assist you.

– Matthew Blair 


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