After Scott priority fails to get 80 votes, legislative staff flip-flop on supermajority clause

After Gov. Rick Scott’s highly prioritized manufacturing tax cut passed the Florida Legislature without receiving a two-thirds vote majority, legislative staff analysts have had a change of heart and now believe such a supermajority was not necessary. 

Last month, staff analysts in the Florida Senate said emphatically that a two-thirds vote was required, because the proposed sales tax exemption for manufacturing equipment would put a significant dent into local government revenue. 

“Therefore, this bill requires passage by 2/3 of the membership of each chamber,” the  legislative analysis dated April 2, 2013 states. The House analysts also raised the two-thirds vote as a possibility, and a top official in Scott's office told the Herald/Times in February he believed a supermajority vote was required.

On May 2, an amended version of the bill cleared the House in a hurriedly cast 68-48 vote, with all Democrats and a few Republicans voting against it. Despite falling short of the 80-vote supermajority previously cited, House Speaker Will Weatherford, R-Wesley Chapel, quickly declared the bill passed, and brushed aside concerns about its constitutionality. Democrats immediately promised to sue.

“We think it is extremely constitutional,” Weatherford said after the contentious vote, stating that he had discussed the issue with legislative legal staff. He followed up with a statement asking “Who would sue to stop a tax cut”?

Now, the non-partisan legislative analysts in the Florida House have backtracked from their initial claim that the bill might need a two-thirds majority and have fallen in line with the House Speaker’s position on its constitutionality.

An updated staff analysis from the Florida House, dated May 15, strips all references to Article VII, section 18 of the Florida Constitution (the portion protecting local governments from unfunded mandates). All previous staff reports had at least cited the constitutional clause, highlighting the requirement for a two-thirds majority vote when local government revenue is at stake. The Senate had been more definitive about the 2/3 vote requirement than the House, and a new analysis was not done by the Senate.

A spokesperson for Weatherford said final bill analyses traditionally do not include information about constitutionality.

Whereas initial staff analyses mentioned Department of Economic Opportunity estimates of up to $115 million in lost revenue for the state, the updated review does not cite any cost figure. DEO has estimated that the tax cut could cost cities and counties up to $26 million per year.

The final bill analyses does not cite those numbers, or any others, only stating that “it is not anticipated the provisions would significantly affect the authority of the counties and municipalities to raise revenue in the aggregate.”

The words “significantly” and “aggregate” are key, because the Constitution requires a two-thirds vote for any bill that has a significant impact on local governments revenue-collecting abilities. A sales tax cut for manufacturers will likely reduce the amount of revenue coming in to local government coffers.

Under the bill, the revenue loss for local governments—estimated at $13 to $26 million per year—far exceeds the $1.9 million threshold needed to qualify as a “significant” impact. But the Legislature's legal team has seized on the term “in the aggregate” to justify the bill’s constitutionality.

"Based on our staff's estimate, it does not have a significant impact," said Ryan Duffy, a spokesperson for Weatherford.

Case law on the issue is not definitive, so a lawsuit could set a legal precedent for the future.

Of note, the bill has changed since the first staff analyses, but the final version would still have a annual impact on local government revenue. Under the original bill, the sales tax cut would have kicked in this year and lasted forever. The updated bill creates a three-year tax cut period starting in 2014. It could save manufacturers more than $140 million per year, when state and local tax savings are combined.

The proposal was one of Scott’s top priorities for the 2013 session, as the governor said eliminating taxes on machinery will help “build up” manufacturing jobs in Florida.

Scott, who is expected to sign the bill soon, recently wrapped up a “victory tour” across the state to celebrate the bill’s passage.

“Manufacturers in Florida have been disadvantaged for too long because we were one of few states that taxed the purchase of manufacturing equipment,” Scott said in a statement. “With this legislation, Florida is now on a level playing field.”

He added “I look forward to signing this bill into law.”

@ToluseO

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Federal appeals court upholds ruling striking down Florida law banning hiring of firms with Cuba ties

@PatriciaMazzei

A federal appeals court on Monday upheld a ruling that struck down a Florida law prohibiting the state and local governments from hiring companies with business ties to Cuba. The ruling continues to block the 2012 law from taking effect.

The law “conflicts directly with the extensive and highly calibrated federal regime of sanctions against Cuba promulgated by the legislative and executive branches over almost fifty years,” 11th U.S. Circuit Court of Appeals Judge Stanley Marcus wrote on behalf of a three-judge panel in the unanimous opinion.

The judges ruled in favor of Odebrecht USA, the Coral Gables firm that had challenged the law approved by a near-unanimous majority of state legislators and signed by Republican Gov. Rick Scott. The Florida Department of Transportation had appealed the preliminary injunction issued last year by U.S. District Judge K. Michael Moore, who opined the legislation interfered with the federal government’s power to set foreign policy.

The appeals court, Marcus wrote, had “little difficulty” in affirming Moore’s ruling. Signaling their eventual position, the three clearly skeptical appeals judges pointedly questioned FDOT’s lawyer at a hearing in March.

Odebrecht USA, a subsidiary of the Brazilian engineering and construction giant, sued over the law, which would prohibit any Florida or local government agencies from awarding contracts worth at least $1 million to U.S. firms whose foreign-owned parent companies or subsidiaries work in Cuba or Syria. An affiliate of Odebrecht USA’s Brazilian parent company is significantly expanding the Cuban Port of Mariel.

More here.

Federal appeals judges in Miami question Florida's controversial law on Cuba, Syria

@PatriciaMazzei

A panel of skeptical federal appeals judges meeting in Miami Thursday sharply questioned a Florida law prohibiting the state and local governments from hiring companies with business ties to Cuba.

Several questions from the three-judge panel centered on whether the law would conflict with the federal government’s power to set foreign policy. Last year, U.S. District Judge K. Michael Moore blocked the law from taking effect, ruling in favor of Odebrecht USA, the Coral Gables-based subsidiary of the Brazilian engineering and construction conglomerate. The state appealed.

On Thursday, 11th U.S. Circuit Court of Appeals Judge Stanley Marcus asked Gregory Costas, an attorney for the Florida Department of Transportation, if the law would ban companies permitted under federal law to do some business with Cuba — such as providing agricultural equipment or medical supplies — from obtaining government contracts in Florida.

“That would be doing business with Cuba,” Costas responded.

“Isn’t that a square collision with the federal regime?” Marcus said.

Odebrecht sued FDOT over the law, approved by a near-unanimous majority of state legislators and signed by Republican Gov. Rick Scott. It would prohibit state and local government agencies from awarding contracts worth at least $1 million to U.S. firms whose foreign-owned parent companies or subsidiaries work in Cuba or Syria. An affiliate of Odebrecht USA’s parent company is heading a major expansion of the Cuban Port of Mariel.

Landlords, car dealers get wins with House votes. Dems say consumers lose

Consumers who get in disputes with their car dealer or landlord could end up facing a tougher task after two pro-industry bills passed the Florida House on Wednesday.

HB 55, sponsored by Rep. Matt Gaetz, would require some car buyers who have a dispute with their car dealer to send a demand letter prior to filing a lawsuit.

Car buyers who believe their car sellers have acted deceptively or fraudulently will have to send a detailed demand letter including the amount of damages being claimed, and give the dealer 30 days to address the problem before suing.

Gaetz said the bill would help consumers and car dealers avoid expensive litigation, and the demand letter proposal would allow parties to “more efficiently and effectively solve disputes.”

The bill passed 83-29, with opposition from Democrats who said the demand letter put too much of a burden on consumers, especially those who are not savvy about the legal process.

“The bill that we have before us is very troubling from the perspective of consumers,” said Rep. Jose Javier Rodriguez, D-Miami, who blamed supporters of the bill for “cutting off access to redress for those consumers” who have car problems after buying a vehicle.

“We shouldn’t be legislating something honestly that is this anti-consumer, when there are probably solutions before us that are more narrow,” he said.

Said Rep. Elaine Schwartz, D-Hollywood: “There are a lot of things about this that don’t smell so good,” adding that car dealers are notorious for “trying to con someone.”

“This bill eviscerates… those rights that consumers have under the current law,” said Rep. Dwight Dudley, R-St. Petersburg. 

Rep. Kathleen Passidomo, R-Naples, defended the bill from those Democratic attacks, saying that it’s a simple way to avoid costly litigation.

Universal gun background check bill filed, sponsor admits its a tough sell

Sen. Maria Sachs, D-Delray Beach, introduced the “Universal Background Check Act” on Wednesday, filing a gun control bill that requires virtually all sales of firearms to be conducted through licensed dealers.

The bill would require non-licensed individuals that want to sell or “transfer” a gun to do so through a licensed dealer. The gun control bill faces long odds in Florida’s gun-friendly, Republican-dominated Legislature, something Sachs readily acknowledged.

“I am not so sold on the idea that this bill is going to pass, “ said Sachs. “What I am looking forward to, and I am furious about his as so many Floridians are, let’s have the discussion. Let’s bring everyone to the table and let’s have this discussion.”

Licensed dealers are required to conduct background checks prior to selling firearms but so-called "loopholes” in the law allow some gun sales to occur without a background check, something that Congress and the White House are considering addressing.

Biz group releases Citizens Insurance map, hoping to get lawmakers to act

Hoping to convince lawmakers to make significant reforms on the politically thorny issue of property insurance, a business group has released an interactive map showing legislators how many of their constituents are covered by Citizens Property Insurance.

The idea is to get lawmakers to realize that, in most cases, the majority of their constituents get coverage in the private market, not from government-run Citizens. That realization would theoretically make it easier for lawmakers to back legislation raising rates at Citizens.

“This is the first time we’ve looked at the data this way and it’s very telling. More than two-thirds of residents in a majority of Senate and House districts don’t have Citizens as their property insurer,” said Associated Industries of Florida president Tom Feeney in a statement.

AIF is pushing for major reforms, many of which will lead to higher insurance rates for property owners covered by Citizens, and potentially for those covered by private insurers as well. AIF says the threat of those "hurricane taxes" is bad for business. Citizens, the largest insurer in the state with 1.3 million policies, covers about 23 percent of the market.

If the company—which is running a record surplus—ever runs out of money after a massive monster hurricane, it might have to levy “assessments” on Florida consumers to make up the shortfall. Federal and state taxpayers may also pick up some of the tab, as has happened in the past after devastating storms.

Property insurance has been a tough political football because of the pocketbook impact it has on homeowners. In places like South Florida, where Citizens dominates the market, the typical family spends about 5 percent of its income on property insurance, much higher than state and national averages.

Those homeowners are very vocal come election time, so Republicans in South Florida and other high-cost coastal regions have been wary of voting for business-backed insurance bills in the past. Democrats have joined those wary Republicans to kill bills that the insurance industry wants and this year the minority party has made keeping insurance costs down part of its platform.

Federal court rejects Florida's welfare drug-testing appeal

A federal appeals court upheld the temporary ban on Florida’s drug-testing for welfare recipients Tuesday, saying that a lawsuit against the state had a good chance of succeeding.

The 11^th Circuit Court of Appeals in Atlanta sided with a lower court decision, stating that Florida failed to show that the drug testing plan was so critical that the Fourth Amendment, which bars unreasonable searches by the government, should be suspended.

The decision—which did not weigh in on the ultimate constitutionality question—is the latest development in Gov. Rick Scott's controversial drug testing push. In 2011,Scott and the Florida Legislature instituted a program for drug-testing all recipients of Temporary Assistance for Needy Families. Luis Lebron, a single-father and TANF applicant who refused to take the test on constitutional grounds, filed a lawsuit with help from the American Civil Liberties Union.

In authoring the court’s opinion, Circuit Judge Rosemary Barkett said that Florida had not proven that its drug-testing program serves a “special” or “immediate” need, or that it even protected children in families with substance abuse.

“There is nothing so special or immediate about the government’s interest in ensuring that TANF recipients are drug free so as to warrant suspension of the Fourth Amendment,” Barkett wrote. “The only known and shared characteristic of the individuals who would be subjected to Florida’s mandatory drug testing program is that they are financially needy families with children.” 

Scott vowed to appeal the decision and take his fight to the Supreme Court.

“The court’s ruling today is disturbing," he said in a statement. "Welfare is 100 percent about helping children. Welfare is taxpayer money to help people looking for jobs who have children. Drug use by anyone with children looking for a job is totally destructive. This is fundamentally about protecting the wellbeing of Florida families. We will protect children and families in our state, and this decision will be appealed to the Supreme Court.”

The court relied on a similar case in Georgia, which struck down the state’s program for requiring all political candidates to take drug tests. That case found that Georgia did not show that there was a drug problem among elected officials, and the law was mostly “symbolic.”

In the rejecting Florida’s appeal to the lower court's preliminary injunction, Barkett took a similar position. 

“The State has presented no evidence that simply because an applicant for TANF benefits is having financial problems, he is also drug addicted or prone to fraudulent and neglectful behavior,” she wrote.

The ACLU's associate legal director Maria Kayanan said the ruling was a vindication for struggling families who apply for government assistance.

"The state of Florida can’t treat an entire segment of our community like suspected criminals simply because they are poor and are trying to get temporary assistance from the government to support their families,” said Kayanan, who was lead counsel on the case.

Florida also passed a law last year requiring drug testing for all state workers, but that issue is also tangled in constitutional challenges and litigation. 

@ToluseO

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For the first time, Gov. Rick Scott needs votes from Democrats

For the first time in his brief and turbulent political career, Gov. Rick Scott needs a little help from Florida’s Democrats to turn one of his wishes into law.

Scott’s top legislative priority this year — a $141 million tax cut for manufacturers — comes with an asterisk: It has to garner ‘Yes’ votes from two-thirds of the Legislature to pass.

That means Democrats — whose gains in November breached the Republican supermajorities in Tallahassee — suddenly find themselves in an unfamiliar power position as they try to defeat Scott in 2014.

“I doubt that’ll be able to get a supermajority,” said Rep. Perry Thurston, a Plantation Democrat and minority leader in the Florida House. “It’s just another [business] incentive. We don’t know if it works.”

The bill seeks to eliminate sales taxes on all manufacturing equipment and machinery.

Scott has already put considerable political capital behind the tax cut, stating on numerous occasions that this was his top priority for 2013, along with a $1.2 billion boost in education funding.

“We need to build up manufacturing jobs in the great state of Florida,” he said in unveiling a $74.2 billion budget plan last month. Scott said the tax cut would create jobs and increase exports.

A failure on the measure would be politically embarrassing for Scott, who has staked his governorship on job creation and CEO-like efficacy.

Read more here: 

 

Watchdog group: Florida government engaged in corporate welfare

A government watchdog group and Americans for Prosperity blasted Florida’s government for the hundreds of millions of dollars it gives to corporations, stating the state’s jobs agency is engaged in “pay-to-play” and “corporate welfare.”

A new report by Integrity Florida and Koch-brother funded Americans for Prosperity highlights several problems with the state’s economic incentives program, which uses tax deals to bring companies to Florida.

“We’re concerned about the appearance of pay-to-play ,” said Dan Krassner, director of Integrity Florida.

Among the report’s findings:

- Enterprise Florida has failed to meet its job creation objectives, with companies creating only 103,544 jobs after receiving tax breaks, less than the 200,000 envisioned by the Legislature in 1992 when EFI was created.

- Enterprise Florida has failed to get 50 percent funding from the private sector, instead relying on 85-percent taxpayer funding to support the public-private partnership

- Enterprise Florida has “the appearance of pay-to-play,” since it receives an average of $50,000 from some of its corporate board members. Those board members also get private contracts to do work on EFI’s behalf as well as tax break deals processed by EFI.

Emails show legislative staff talked with party consultants over redistricting maps

Florida’s legislative leaders appear to have authorized their staff to use private email accounts, secret “dropboxes” and to engage in “brainstorming meetings” with Republican Party of Florida consultants in attempting to draw favorable political districts, despite a constitutional ban on such coordination.  Download E-mails (Bainter, Reichelderfer & Heffley)

The allegations arise from a lawsuit challenging the Senate and congressional redistricting that include emails showing how top deputies of Senate President Don Gaetz, House Speaker Will Weatherford and several of Gaetz’s consultants were in frequent contact with consultants who drafted and analyzed maps. Redistricting is done every 10 years to redraw boundaries of legislative and congresssional districts to ensure equal representation.

The emails show that just a month after voters approved the amendment banning all coordination between the party and lawmakers in 2010, Rich Heffley, the RPOF political consultant who served as a close advisor to Gaetz, called a redistricting “brainstorming” meeting to be held in the chairman’s conference room at RPOF headquarters in Tallahassee.

Heffley listed the expected participants, which included Weatherford’s redistricting chief of staff, Alex Kelly; Gaetz’s redistricting general counsel Andy Bardos; Gaetz’s district aide Chris Clark, and the political consultants running the House and Senate 2012 Republican election campaigns: Frank Terraferma, Joel Springer, Andy Palmer, Marc Reichelderfer, and Pat Bainter. Also attending: the lawyers advising the House and Senate on their redistricting efforts, George Meros and Ben Ginsberg. Story here.