Government Relations E-lert -- 2009 End-of-Year GrayRobinson State Government Relations E-lert (12/29/09)

The first decade of the new millennium is certainly one we will not soon forget. It includes a defining moment in our nation's history, when on a Tuesday morning our calm sense of security was forever rocked, and our view of the world forever altered. An historic election caused the general population of our nation to, for perhaps the first time, actually understand the Electoral College and its role in electing the President.

Our economy has endured several bubbles (namely housing in our state) giving us both "the best of times," and "the worst of times." As a result we are facing the longest recession of our economy since the Great Depression, with unemployment above 10% nationally and above 11% in Florida. Countless other major moments have occurred in the last 10 years even right up to today where Congress is set to pass sweeping changes in the way we provide healthcare in America.

As 2009 winds to a close and we look ahead to the start of a new year and a new decade, we thought it appropriate to briefly reflect upon the year while forecasting some of those things we can expect in 2010. GrayRobinson continues to consider it a great pleasure to represent our clients before the Florida Legislature and the Executive Office of the Governor. To have played even a small role in some of the "big stories" of 2009 is a great honor, and we are excited about the opportunities for advocacy on the issues Florida will face in 2010. Here is just a snapshot of what has happened over the last year, and what we can look forward to beginning on January 1st.

Budget Woes Continue

Several times we have reported to you on the difficulties that our legislature has faced in crafting a state budget over the last few years with severely declining tax revenues. 2009 was no different.

A state budget which just three short years ago hit nearly $73 billion has been slashed by almost 15%. Every level of state government has felt the pinch with many widely respected and successful programs being eliminated outright and all others seeing significantly reduced funding. This was, of course, brought on by the national recession and the burst of the housing bubble which hit Florida disproportionately hard due to our reliance on doc stamp revenues from housing sales for a significant portion of our revenue. Additionally, given our lack of a state income tax and dependence on sales taxes, with tourism down significantly and residents having less money to spend, this too affected our bottom line. For several consecutive quarters spanning more than two years, the State Revenue Estimating Conference (which is tasked with telling the legislature how much money there is to spend) lowered their estimates each time they met. Subsequently, revenues came back lower than their estimates each quarter until the middle of this year when revenues finally exceeded expectations. This has caused many to conclude that we may have finally "hit bottom" and the recovery is underway.

In crafting the budget for 2009-2010, the legislature had the benefit of utilizing federal stimulus dollars to "stabilize" the budget for two years. This money specifically filled holes in our public education budget which was set to see dramatic decreases were it not for the federal aid. This same amount of money will be available for use by the legislature in the 2010 Regular Session when creating the 2010-2011 fiscal year budget. However, after that the money is not guaranteed, and economists and estimators are not anticipating a recovery great enough to make up the difference that will be left. More difficult decisions and challenges lie ahead for the Florida House and Senate.

Growth Management (SB 360)

Perhaps the most debated and controversial issue to pass the Florida Legislature in 2009 was SB 360, Relating to Growth Management. Dubbed, "The Community Revitalization Act of 2009," the bill creates a new category of "Dense Urban Land Area" which applies to eight counties throughout the state (Broward, Duval, Hillsborough, Orange, Miami-Dade, Palm Beach, Pinellas, and Seminole). The definition of these DULAs also applies to approximately 190 cities, located in over 24 more counties.

Further, the bill expanded the definition of "Existing Urban Service Area," and created "Transportation Concurrency Exception Areas" (TCEAs) in specified areas (specifically, those areas also qualifying as DULAs). Lastly, the bill modifies the Development of Regional Impact (DRI) program by eliminating it in the newly defined DULAs, modifies school concurrency requirements, extends compliance deadlines to December 2001 (due to the changes), and extends all local government development orders or building permits issued between September 2008 and January 2012 by an additional two years.

So what does all of this mean? Well, nobody really knows yet.

Several cities have filed suit seeking clarification as to the real intent of the legislation, particularly as it relates to the TCEAs. There is great confusion in the legislature as to what was exactly accomplished with the bill, and the Department of Community Affairs (DCA) is facing its mandatory "sunset review" year in 2010 where the legislature will be tasked with deciding the department's ultimate fate (options include reducing its reach, merging it with another agency, eliminating it outright, or leaving it alone). Given that, due to the economic conditions, no real development is taking place throughout the state, the particulars of the legislation are yet to be fully tested or vetted through the permitting process, and this may very well be contributing to the confusion that many are facing.

Ultimately, SB 360 may be revisited in the coming legislative session. Whether this will entail a full re-write of the bill, or a simple "glitch bill" to try to ease the growing concern or confusion remains to be seen. But one thing is certain: we have not seen the last of this issue, and if history is an indicator the only constant in growth management policy in Florida is change.

Statewide Rail Infrastructure Special Session

Just a few short weeks ago the legislature convened for a special session to pass landmark legislation creating a long-term statewide vision for passenger rail. On the heels of consecutive sessions where legislation could not be passed through the Florida Senate to finalize Central Florida Commuter Rail (SunRail), a new approach was taken for the Special Session in light of the commitment to High Speed Rail made by the Obama Administration. This commitment came in the form of $8 billion in federal grant money, set aside for the construction of interstate and intrastate passenger and High Speed Rail throughout the country. This first phase of the federal money will be awarded early in 2010 to select states/regions based upon a competitive bid process.

Florida, which is the most prepared state in the country to "break ground" on a High Speed Rail corridor (Orlando-Tampa) thanks to years of preparation, submitted a complete application early in the fall to the U.S. Department of Transportation (DOT) requesting more than $2.5 billion in funding to: build the Orlando-Tampa High Speed Rail line; conduct all necessary environmental studies and work for a future Orlando-Miami line; supplement the acquisition of existing tracks from the CSX Freight Company for SunRail; and create Amtrak service from Jacksonville to Miami.

After submitting the application, DOT Secretary Ray LaHood explained in very clear terms that no money would be given to a state or region who had not already demonstrated a commitment to passenger rail. With the troubles facing Tri-Rail in South Florida, and the inability to pass SunRail for Central Florida, our state certainly was not showing a commitment in the eyes of DOT. Integral to Florida's cause in Washington was newly appointed Senator George Lemieux. Who, less than 60 days into his 16 month assignment, proved to be Florida's strongest advocate to DOT and the Obama Administration in setting the stage for Florida to draw down the federal funds.

This brings us to the Special Session. Because the federal money was set to be awarded early in 2010, there was not time to wait until the regular legislative session (beginning in March) to work on the issue and show a commitment to rail. Things had to move quickly. The collective efforts of Governor Crist, Senate President Jeff Atwater, House Speaker Larry Cretul and others produced legislation that was not solely about SunRail, Tri-Rail or High Speed Rail. It was about all of those and then some. The legislation proposed in early December did finalize the liability provisions necessary to complete the acquisition of 61.5 miles of track from CSX for SunRail; and it did allocate a more consistent and reliable source of funding for Tri-Rail in South Florida; and it did lay the groundwork for starting High Speed Rail if (and only if) the federal government chooses Florida and foots the bill. But the package took a wider view than just those three imminent issues. Because of the Rail Enterprise and Statewide Rail Commission (which will be bodies working within the structure of the state DOT) created in the bill, Florida will be able to move forward with a real plan for rail in Tampa Bay, Jacksonville, and Southwest Florida when the time is right for those regions. This legislation was truly a step toward accepting that we cannot build our way out of our great and growing congestion problems with roads alone. Under this proposal Florida is creating a statewide vision for how we will move people around our state in the future.

You have certainly seen and read much about the details of the special session. After days of vigorous debate and questions on the bill, the House and Senate each passed the measure overwhelmingly (84-25 and 27-10 respectively) and Florida is "on a new track" as it relates to planning our future.

Amendment 4

For several years we have reported to you on the pending constitutional amendment mandating that all proposed changes to a local government's comprehensive plan be voted on by the general electorate of a government's jurisdiction. It took longer than expected, but this year the supporters of Amendment 4 finally reached the necessary threshold of signed petitions to reach the ballot in November of 2010. The "vote on everything" amendment will be presented to the voters on Election Day needing 60% of the state to approve the measure for it to be placed in our constitution.

The small city of St. Pete Beach adopted a measure similar to this proposal several years ago and it has been met with nothing but lawsuits, confusion, infighting, and unintended consequences. What once was a vibrant and growing tourism driven city with a wonderful economy, is now a struggling town with lost population and no chance of redevelopment and revitalization thanks to the self-imposed no-growth measure.

There are several outlets you can access to learn more about the proposed Amendment 4 and the massive repercussions it will have on Florida should it pass. The Florida Chamber of Commerce and Floridians for Smarter Growth are the two most comprehensive places to gather information.

Statewide Politics

For the first time in modern state history, all seats on the Florida Cabinet and a U.S. Senate seat are open. Several new faces will emerge as statewide leaders, and some faces will simply move seats. But regardless, the 2010 election season will be one for the ages.

US Senate
Governor Charlie Crist and Former House Speaker Marco Rubio are locked in a closer-than-the-experts-thought primary battle as we enter the election year. Rubio has managed to align himself with the more conservative wing of the Republican Party making great waves and accomplishing more at this early point than many thought possible. Governor Crist continues his more populist approach to governing which endears him well to the moderates in his own party and those across the aisle. But in a primary election against someone who is staying to the right of the Governor on policy matters, Crist will need to be and sound more conservative in the coming months (something he has already begun to implement). Fundraising for the Governor continues at an astonishing pace. At the end of the 3rd quarter of 2009, Crist already had more than $6 million cash-on-hand and many expect that number to be over $8 million at the start of 2010. He has not even begun to spend money and this is certainly his strongest asset early in the race.

With Congressman Kendrick Meek waiting in the General Election (his primary battle will be mild at best), the race to watch for U.S. Senate early in the season is the Rubio/Crist battle and whether Rubio can keep up once Crist begins to spend his massive war chest.

Governor
With State Senator Paula Dockery now in the race for the Republican nomination for Governor against Attorney General Bill McCollum, it will force some of McCollum's resources to be spent and attention to be focused away from the general election against CFO Alex Sink and towards the August Primary Election. Not many view Dockery as formidable enough to actually win the primary race, but she is certainly tough enough to have a major impact and peel away likely voters from McCollum if she is able to raise the funds to get her message out.

That being said, the race to replace Charlie Crist in the Governor's mansion is between the two members of the Florida Cabinet. Sink and McCollum appear locked in a neck-and-neck battle which is not likely to tip one way or the other for quite some time. Both are extremely qualified and while Sink has an advantage in fundraising, McCollum has an advantage in name ID. Following the legislative session in May, this race will really begin to heat up and it has the makings of a race to remember.

Attorney General
The Republican Primary has gotten more crowded in recent weeks with the entry of former legislator and department Secretary (DBPR and AHCA) Holly Benson, and Hillsborough County Assistant State Attorney Pam Bondi. Already in the race (and the leading candidate at this point) is Lieutenant Governor Jeff Kottkamp. In the Democratic primary, two South Florida senators are facing off with Dave Aronberg (Greenacres) and Dan Gelber (Miami) both seeking the nomination.

Both primary races are probably too close to call at this early stage, but all are good candidates who have compelling reasons to be Florida's "top lawyer."

Chief Financial Officer
No Democrat has entered the race yet, and Senate President Jeff Atwater continues to raise tons of cash and collect all the endorsements. The biggest shock in statewide politics this election season would be if Atwater didn't win. He's as close to a shoe-in as it gets at this early point in the campaign season.

Commissioner of Agriculture and Consumer Affairs
The early read on this race is that the winner of the Republican Primary will ultimately win the cabinet seat in November. Two strong candidates, Congressman Adam Putnam (Bartow) and State Senator Carey Baker (Eustis) are each aiming to replace the term-limited Charlie Bronson. While Putnam has a sizable lead in fundraising, Baker is not to be counted out. He is seeking to appeal to the cross-section of Floridians that are regulated and affected by the Commissioner's office, but are not agriculture-related (this group is far larger than one may think), while Putnam is a citrus farmer by trade and family history and is firmly implanted in the sizable agriculture industry in Florida.

In addition to the statewide races, all 120 Florida House seats, more than 20 Florida Senate seats, and all 25 Florida Congressional seats are on the ballot next November. As the weeks and months go by we will update you on specific races of interest so that you are aware of what is going on throughout Florida.

An item to keep a close eye on will be the fundraising reports due by all candidates on January 11th. The numbers will become public early in the month and they will, as always, be a strong (but not the only) indicator of the "early leader" in races at all levels of government. We will be back in touch after these reports are released with our take on more select races.

As always, should you need further information or have questions related to any of these (or any other) topics, please do not hesitate to contact us directly. We are honored to have the opportunity to represent our clients in Tallahassee before the State Legislature and the Executive Office of the Governor. To participate in the process on behalf of our clients is a responsibility we do not take likely, and we welcome the opportunity to speak with you about any issue(s) of importance to your business or community.