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13 posts from December 5, 2012

December 05, 2012

Negron wants 'intensive' budget review in Senate

Senate Appropriations Committee Chairman Joe Negron, R-Stuart, on Wednesday promised an "intensive" review of state spending, including state contracts and recurring local projects that are renewed each year with little or no public scrutiny. He also backs the idea of a separate review of all local spending that Gov. Rick Scott will propose in his budget.

"We really want to enhance our review of the base budget," said Negron, who currently ranks as the Legislature's most seasoned budget-watcher (he has chaired all human services spending in the Senate and previously ran the full House Appropriations Committee.

Negron urged fellow senators to take a much closer look at state contracts with private providers, and to hold state agencies accountable for cases in which there are "huge variations" in the costs the state is paying for similar services in different areas of the state."Sometimes there are divergences that can't be explained," Negron said.

He credited Chief Financial Officer Jeff Atwater for encouraging the review of contracts, and said he had an open mind and no preconceived notions about contracting practices.

Negron gave the overview in the form of a request to the senators who chair individual budget subcommittees, who listened closely but offered no public reaction at a brief meeting. The intensive review will all be in public, Negron promised: "It will all be done in the sunshine."

-- Steve Bousquet

State university presidents say they won't hike tuition if Legislature gives them $118 million

As expected, the presidents and student leaders of Florida’s state universities have made the Legislature an offer they hope will not be refused: Give them $118 million and they won’t raise tuition this year.

“What we’re asking for this year is a significant investment from the state, tied to specific goals to universities,” said University of West Florida President Judy Bense. “With an investment provided for our students, we promise not to seek one penny of a tuition increase this year.”

This new funding would be on top of the restoration of a $300 million one-time cut the Legislature imposed last year, which is already being built into the state budget. University of North Florida President John Delaney said universities need more money whether it comes from tuition or the state budget.

“Fundamentally the system is underfunded, and the source of that money is secondary in regard, I think, to the universities,” he said. “The question is that it’s underfunded as compared to the rest of the country, approximately 30 percent is spent less in Florida compared to the national average on each student.”

Judy Genshaft, he president of the University of South Florida, said one in five students at the school are first-time college students and holding the line on tuition is key for keeping them enrolled.

Continue reading "State university presidents say they won't hike tuition if Legislature gives them $118 million" »

Citizen's loan plan comes under fire at House hearing

A controversial program to shrink the size of the Citizens Property Insurance Corp. by spending $350 million to encourage private companies to take over business came under fire from all sides on Tuesday as the state-run insurer made its first appearance before a House committee.

The program, which would loan some of the company’s surplus cash to private insurers who agree to take over policies, is expected to be approved by the Citizen’s eight-member board of governors in the coming weeks.

“It’s worthy to spend a little bit of surplus in order to get risk off the books,’’ said Sharon Binnun, Citizens chief financial officer.

But the concept was derided by two legislators as “corporate welfare” and frivolous, and Chairman of the Insurance and Banking Subcommittee, Rep. Bryan Nelson, R-Apopka, raised doubts about the effectiveness of the idea after Citizens officials said the loan program has attracted only three companies out of a possible 20 that might be eligible.

“We’ve got to have more carriers involved,’’ Nelson said, who said he wants to see the plan revised to encourage smaller companies to take the loan incentives.

Under the proposed loan program, private insurers could borrow up to $50 million for 20 years at an interest rate of two percent. Insurers would agree to hold the policies for 10 years and, after three years, could raise rates on customers more than 10 percent.

Rep. Frank Artiles, R-Miami, who is not a member of the committee, blasted the proposal as a “corporate bailout” scheme designed to help Florida-based Tower Hill insurance and its three companies. He warned the program has no safeguards against a private insurer that encounters financial difficulties can cannot pay the loan.

“The reality is citizens is going to dump 300,000 policies into the private market and give them to weaker insurance companies,’’ he said. “So, at the end of the day, when those companies fold and walk away, you’re going to end up with them again.”

Artiles on Tuesday asked the Florida Office of Insurance Regulation to conduct a top to bottom investigation, known as a “Market Conduct Examination,” on Tower Hill Preferred, Tower Hill Prime, Tower Hill Select and Tower Hill Signature in light of the proposed loan plan.

Artiles has been one of the most vocal critics of Citizens Insurance, warning that the company’s policies threaten to increase the risk on policyholders and will add to instead of reduce the risk to the state.

He won an unusual ally Tuesday when Rep. John Wood, a Haines City Republican, who is also not a member of the committee, also raised doubts about the concept. He represents a region of the state that has long complained about being forced to subsidize Citizens Insurance rates in the state’s coastal areas.

“This surplus notes thing is frivolous in my opinion, totally frivolous,’’ said Wood. He suggested Citizens freeze existing policies and charge the actuarially sound rates on new business to drive away customers.

“My constituents are at great risk,’’ he said. “I’m sympathtic to Rep. Artiles. but I’m not going to have Dade County take down the whole state of Florida…We need real relief fast.”

Rep. Doug Broxson, R-Milton, who is an insurance agent, asked how the company can suppress growth when it fails to charge rates that reflect the acturarial risk — a move that would discourage people from signing up with Citizens.

“We’re re-arranging the deck chairs on the Titanic,’’ he said.

Dan Sumner, Citizens general counsel, said the board hasn’t proposed charging higher rates for new business, but “would benefit from legislative clarification” on the controversial issue.

Read more here: http://www.miamiherald.com/2012/12/05/3126875/citizens-loan-deal-draws-critcism.html#storylink=cpy