Legislative Preview: Battling for Business

Battling for Business Florida’s major business lobbies prepare for the Legislative Session By Gary Fineout

In 2009, Florida’s unemployment rate zoomed past 11 percent and Florida’s businesses were hit hard by the recession.

So when lawmakers kick off the 2010 session of the Florida Legislature in March, the message from the business community will center around one main demand: Don’t do anything that could make the economic situation worse. Despite the continued budget woes of state government, business groups say that state legislators need to think long and hard before passing anything that could cost businesses more during challenging times.

“Florida business is not different from Floridians,” said Steve Halverson, president and CEO of the Haskell Company and chairman of the Florida Chamber of Commerce. “We’re all in this together. Business is suffering mightily. This is a time of alignment and unity. What employers need in a time of complete economic turbulence and freefall is stability, predictability and leadership from Tallahassee.”

Legislators can expect to hear echoes of that message repeatedly from both the Chamber, which represents more than 139,000 employers, and Associated Industries of Florida. Leaders of both the Chamber and the 10,000-member-strong Associated Industries say they will focus on items that can improve the long-term viability of the state’s economy and make the state more attractive for businesses. Some of those items include:

• Improving the state’s business climate, which can include everything from the regulatory structure in state government to taxes charged on employers.
• Advocating for more changes and a deeper investment in Florida’s education system in order to produce future workers who are prepared for skilled, high-wage jobs.
• Pressing for changes to the state’s volatile property insurance market, including giving more leeway to insurers in the rates they are authorized to charge.

Halverson said the Chamber also wants to convince legislators to adopt a formal process that actually estimates both the cost — such as how much money a tax change would bring in — and the benefits of the policy. He said that this approach would help legislators decide the long-term consequences of their actions and, just as importantly, whether those actions would actually create jobs.

“The filter this has to pass through is, ‘Is this position going to enhance or detract from job creation?’ ” he said. “There’s nothing in Florida that robust, high-paying jobs won’t fix.”

Barney Bishop, president and CEO of Associated industries of Florida, said that some of the other priorities for his organization in the coming legislative session include supporting a measure to allow oil drilling in Florida waters, lifting the cap on money now set aside for affordable housing and working with legislative leaders on the oversight of state contracts awarded to private companies.

Bishop also said that Associated Industries will closely watch how legislators deal with health care. He said that his organization will fight against any legislative proposal mandating that private health insurance companies provide certain types of coverage — such as for autism — unless an existing mandate is removed.

“We’re not opposed to mandates per se,” said Bishop. “If you want to add one, take one away.”

Another hot topic for Associated Industries will be legal reforms, including legislation that would undo a 2008 Florida Supreme Court ruling that stated parents cannot waive the legal rights of their children. Many tourist-based businesses in Florida ask parents to sign waivers before they let the children participate in activities ranging from horseback riding to renting a boat.

BUSINESS CLIMATE

Anything that increases restrictions on businesses — whether it’s in health care, the environment or any other area — will likely be opposed by business organizations this year. For example, Associated Industries of Florida plans to fight any attempt to shift the registration of corporations from the Florida Department of State to the Florida Department of Revenue, which has been discussed as a possible efficiency measure.

“They’ve got their claws into us enough,” said Barney Bishop, Associated Industries’ president and CEO, about the Department of Revenue, which is the state’s tax collector. “They don’t need any more.”

TAXES

Business interests last year agreed to pay more in unemployment compensation taxes because they knew that that the fund set aside to pay unemployment benefits was running out of money. Yet the rising unemployment rate has depleted the fund so much that the resulting tax increase was higher than some businesses anticipated.

Several business organizations, including the Chamber, want lawmakers to change the way that the tax is calculated or at least put a freeze on the higher taxes authorized last year. But Associated Industries of Florida is opposed to that approach, saying it will just draw out the period of time that businesses must pay higher taxes.

“Anything we do to shift it down the road means we are going to pay more dollars for a longer period of time,” Bishop said.

Halverson added that the business community will also mobilize against any type of tax increase.

“You just don’t raise taxes in a recession unless you want a longer recession,” he said.

Legislators may also look at reducing the corporate income tax now charged on Florida businesses. Certain corporations pay a tax of 5.5 percent on income earned in Florida, although the first $5,000 of net income is exempt. The tax annually generates about $1.7 billion.

EDUCATION

A decade after former Gov. Jeb Bush pushed through sweeping reforms in education, both the Chamber and Associated Industries of Florida agree that much more needs to be done.

“We are of a mind that the state needs to make a fundamentally deeper investment in education,” said Steve Halverson, president and CEO of the Haskell Company and chairman of the Florida Chamber of Commerce.

Halverson said the Chamber wants to see Florida graduate more college students with technology, science, math and engineering degrees. He said the state needs to widen its use of online education and look at improving teacher standards.

Bishop added that Associated Industries is backing changes to teacher tenure and wants Florida schools to hand out high school diplomas that say whether a student is prepared for college or is career-ready.

Insurance in the Hot Seat

Florida’s businesses have a lot on the line in 2010, but nowhere more so than on insurance issues. Lawmakers face tough choices on hurricane and other property insurance, worker compensation and even auto insurance. Each issue impacts a business’s bottom line and customer wallets.

The high cost and limited availability of property insurance ultimately affects the viability of construction projects — particularly coastal construction — which then impacts key components of Northwest Florida’s economy, including real estate and tourism.

State Farm, the state’s second-largest property insurer, came close to pulling out of Florida in 2009, prompting legislators to reevaluate some of the changes they have made to the property insurance market over the past few years.

Gov. Charlie Crist wound up vetoing one of the measures that reached his desk. But business groups say they will support again this year a bill that would give insurers wider latitude to raise rates without review by state regulators.

Steve Halverson, president and CEO of the Haskell Company and chairman of the Florida Chamber of Commerce, said that property insurance remains one of the biggest threats to the economy, especially since Citizens Property Insurance and the state-created fund for reinsurance have the power to place an assessment on all insurance bills if a major storm wipes out their reserves. Legislators did allow Citizens to raise its rates in 2010, but there are still fears that it wasn’t enough. A large storm that occurs once in every 100 years could leave the so-called insurer of last resort up to $9 billion short.

Lawmakers may also review the state’s system of mandating insurance discounts for construction techniques designed to reduce hurricane losses. Insurers are required to offer discounts to homeowners, condominium associations and apartment buildings for structures that have features designed to reduce hurricane damage, but legislators are concerned the program isn’t working well enough. — Travis Miller and Gary Fineout

Tracking Bills | The Legislature will update the status of bills throughout the session at flsenate.gov and myfloridahouse.gov. Updates on key business issues will also be available at the Florida Chamber’s Web site, flchamber.com. Primary insurance bills will also be tracked in the Legislative Updates section at radeylaw.com.