Michael Moline, Author at Florida Politics - Page 2 of 27

Michael Moline

Michael Moline is a former assistant managing editor of The National Law Journal and managing editor of the San Francisco Daily Journal. Previously, he reported on politics and the courts in Tallahassee for United Press International. He is a graduate of Florida State University, where he served as editor of the Florida Flambeau. His family’s roots in Jackson County date back many generations.

Settlement reached in Gulf Power’s bid for $106.8 million base rate increase

Gulf Power Co. will settle for nearly $62 million per year in increased rates for its customers in Northwest Florida, rather than the $106.8 million it had planned to seek from the Public Service Commission, the parties announced Monday.

The deal would guarantee the utility a return on investment to Gulf Power’s stockholders averaging 10.25 percent — more than the Office of Public Counsel, which represents consumers before the PSC, had argued was justified.

Hearings in the highly technical base-rate case before the PSC had been scheduled to begin Monday afternoon and run for as much as five days. The monthly fixed charge on residential would have climbed from the existing $18 to nearly $50.

According to the company, the average monthly bill will climb from $144 to $151.

Also opposing the rate increase were large customers including Wal-Mart Stores Inc. Most parties indicated they could at least live with the agreement.

The settlement document bears the signatures of Jeffrey Stone, counsel to Gulf Power, and Public Counsel J.R. Kelly.

PSC Chairwoman Julie Immanuel Brown said the commission would hear arguments on the merits of the agreement on April 4, and could vote on it then. She’d seen the agreement for the first time only an hour before the hearing began, she said.

Charles Rehwhinkel of the public counsel’s office said negotiations had broken down but resumed over the weekend. He and Stone committed the terms to writing only late Sunday night. “It’s better than filing after the meeting,” Rehwinkel said.

“It’s one of the better settlements I’ve been a part of,” Rehwinkel said. “The revenue increase, we felt, was a good compromise that resolved a lot of things in the customers’ favor.”

“The public review process is all about folks coming together and finding out what works best for customers. I think we achieved that today. It is in the hands of the Florida Public Service Commission moving forward,” said Jeff Rogers, a spokesman for Gulf Power.

“We are glad that Gulf Power has agreed to do the right thing,” Bradley Marshall, an attorney for Earthjustice, said Monday in a written statement.

“Raising this fixed charge on monthly bills would have unfairly penalized people who use less energy, and that makes no sense,” he said.

The opposition said customers had swarmed public hearings regarding the increase in Panama City and Pensacola, and sent more than 1,000 protest letters to the PSC.

“The voices of the citizens were instrumental in this decision. This shows that people are paying attention, getting educated on issues that affect them and speaking out,” said Pamela Goodman, president of the League of Women Voters of Florida.

However, the League did not join the settlement. Neither did the Southern Alliance for Clean Energy. Those groups cited “other concerns.”

Representatives of the alliance said the base-rate hike was an attempt to shift onto Florida ratepayers costs associated with two coal-burning plants in Georgia, where long-term customer agreements were winding down.

It would have undermined Florida customer’s efforts to control their own costs through adoption of alternative energy sources including roof-top solar, they said.

“We are pleased that the element we thought most egregious is going away,” Stephen Smith, the alliance’s executive director, said in a telephone interview.

It would have set “an extremely bad precedent,” he said. “It would have damaged people’s ability to manage their costs from their side of the system.”

“We are glad that the fixed charge increase has been removed from Gulf Power’s rate restructuring,” said Tory Perfetti, chairman of Floridians for Solar Choice and Florida Director of Conservatives for Energy Freedom.

“This removal is a common-sense decision, meaning customers will now retain their freedom to manage their own power use regardless of whether that means being smart with their electricity use every month or investing in rooftop solar,” Perfetti said. “Consumer choice is a staple of Florida’s economy, and this fixed charge hike would have been a step in the wrong direction.”

A dozen senior citizens wearing red and white AARP T-shirts attended the PSC meeting. One of their number, Mattie Gammon, said the group was well pleased.

“It would have, would I decide whether I get my prescriptions filled this month or do I get a loaf of bread,” she said.

Most Florida insurers retain ratings, but agency warns of AOB danger

Most of the 57 insurance companies evaluated by insurance ratings agency Demotech Inc. retained scores of “A” or better after boosting their loss reserves and capital contributions.

The companies had added $200 million in loss reserves and $155 million in capital at Demotech’s urging, the agency said in a statement posted on its website.

“This additional $355 million to benefit policyholders or claimants indicate the insurers’ recommitment to Floridians and financial stability,” Demotech said.

Demotech has been complaining about turbulence in the Florida market due to abuse of assignment of benefits, or AOB, agreements.

“Due to recommitments and recapitalization to meet the requirements of maintaining (a rating) of ‘A’ or better, downgrades have been largely avoided at this time,” Demotech said.

“However, in the longer run, absent meaningful improvement in the AOB situation, it is likely that insurers may face downgrades in the future, consumers may face higher and frequent rate increases, and investors who would otherwise capitalize or fund Florida-based insurance companies will deploy their capital elsewhere.”

The situation, the agency said, “is unlike any other situation in the U.S.”

“This unique situation has affected consumers through an increase in annual premiums due to the unusual severity of claims associated with AOB and created a small number of vendors, attorneys, and third parties that have prospered.”

At this point, “the overwhelming majority of the carriers reviewed appeared to have the situation under control,” Demotech said. “This is critical because a realistic rate structure is a necessary component of the successful implementation of a business model.”

AOB reform is very much on the Legislature’s minds, with reform proposals filed in both the House and the Senate.

Demotech singled out four insurers for special comment.

Cypress Property & Casualty Insurance Co. it down graded from “A Prime” to “A,” citing a “significant underwriting loss” last year.

Elements Property Insurance Co. met state reserves standards but didn’t report numbers to Demotech. It has been acquired by Avatar Partners L.P. Demotech put Element’s rating on hold pending completion of the sale.

The same situation applied to Mount Beacon Insurance Co., now acquired by Florida Specialty Acquisition LLC. It will retain its rating while Florida Specialty absorbs its policies.

Prepared Insurance Co. met Demotech’s capital requirement, but the agency didn’t like its business model. The investors sold a majority interest to PLW Investments LLC.

Florida’s revenue picture improves a little — but not enough to really matter

The Legislature will have $271 million more than it expected to spend this year, but close to 90 percent of the new money is a one-shot deal, and won’t help budget writers with ongoing demands upon a state budget projected at close to $83 billion.

State economists arrived at their new forecast during a revenue estimating conference Friday.

Total general revenues will near $32.4 billion, representing dependable flows of money to pay for most of the state’s needs, not counting taxes pledged to projects like housing and roads and federal contributions.

Amy Baker, director of the state Office of Demographic and Economic Research, said that, for all practical purposes, not much has changed.

“They’re going to end up maybe a little bit better than what we were contemplating in September,” she told reporters. “But it’s not materially different.”

Much of the new money — $226 million — represents unspent cash left over from the current budget year. The Legislature can use it for one-time projects — perhaps one of Gov. Rick Scott’s sales tax holidays for veterans, outdoorsmen, or school children. But it won’t support ongoing state needs.

“Since the last forecast was adopted, total collections have been running slightly over estimate; however, more than half the reported gain year-to-year is attributable to one-time adjustments and technical issues that do not alter the underlying long-term forecast,” conference participants said in a printed summary.

Sales taxes, comprising the bulk of general revenues, “saw percentage changes that round to zero in each year,” the summary reports.

Meanwhile, the state faces escalating demand for Medicaid and K-12 classroom dollars.

The revised forecast for the 2018-19 budget year were revised upward by $68 million, to $32.2 billion. The 2019-20 number grew by $148 million, to $33.6 billion.

The state will collect $69 million more than had been expected in corporate income taxes, reflecting healthy national profit growth. Still, corporate tax refunds have lagged behind expectations, so the bottom line is about $91 million short of earlier expectations.

Insurance premium taxes have been coming in more slowly than expected. The conference did not account for any changes to the Affordable Care Act.

Record tourist traffic has helped to offset a sluggish construction industry.

“That we’re not taking away money is terrific for them,” Baker said of lawmakers. “Any money we add helps ease the picture.”

House leaders, complaining of escalating spending over the years, were worried about the prospect of more or less flat revenues during the new budget year. So they began looking for places to cut.

House Budget chairman Carlos Trujillo has discussed a target of $1.4 billion in cuts. He ordered the budget subcommittees to come up with “A” scenario and “B” scenario plans — the first involving cuts of about $1 billion; the latter, about $2 billon.

House spending reduction targets would spread plenty of pain

The House released its bad-case and worst-case scenarios for the next state budget Thursday. Neither is very pretty.

Florida faces would pay hospital less to treat poor people. The state would build less affordable housing. There’d be fewer prosecutors and public defenders.

Museums, historical preservation, and economic development would be slashed.

For example:

“The long-range financial outlook recommended a hospital provider rate increase of $55.2 million based on past actions by the Legislature. I would not recommend funding this increase,” Health Care Appropriations Subcommittee Chairman Jason Brodeur wrote.

He also recommended cutting “hospital inpatient and/or outpatient reimbursements of approximately $220.6 million in general revenue.”

All told, the budget subcommittees were instructed to come up with “A” scenario and “B” scenario plans — the first involving cuts of about $1 billion; the latter, about $2 billon. Budget chairman Carlos Trujillo has also discussed a target of $1.4 billion in cuts.

House leaders are worried about the prospect of more or less flat revenues during the new budget year. The state’s Revenue Estimating Conference will meet Friday to update the forecast.

The Health Care subcommittee had a minimum goal of cutting $275.8 million. That would require reducing payments to hospitals, among other cuts.

It would meet its larger goal, of $573.8 million, by canceling Medicaid provider rate increases, cutting substance abuse and mental health programs, and cutting payments to nursing homes, among other reductions.

The minimum target for the Higher Education subcommittee was $144.8 million. It would give state universities only $70 million of the $161 million they asked for, and drop projects that no longer needed state money or couldn’t justify their expense.

Additionally, universities would have to cough up 5 percent of the $800 million in unspent money they have been allowed to retain.

The bigger target, $304.8 million, would require holding universities to existing spending levels — in other words, they’d get none of that $161 million they sought. The committee’s report noted that university spending has increased by more than 27 percent in four years.

The Justice subcommittee’s minimum target was $126.6 million. Getting there would require, in part, leaving positions vacant, taking nearly $62 million from trust funds at the Florida Department of Law Enforcement, Department of Corrections, and other law enforcement agencies.

D.A.R.E. would be eliminated. State attorneys and public defenders would lose $8.3 million, ostensibly justified by a lower crime rate. State courts would lose 147 positions and get less for travel expenses.

The committee would save another $7.7 million diverting drug offenders from prison into treatment programs.

Meeting the panel’s larger target — $273.6 million — would require additional position cuts and money from trust funds, plus diversion of other nonviolent offenders from the prison system.

Meeting the Pre-K-12 subcommittee’s minimum of $232.7 million would entail, among other economies, saying “No” to $187.5 million in high-priority needs. Cuts required to achieve the big target, $485 million, would include swallowing larger class sizes.

Chairman Manny Diaz noted that he’d invited local project administrators to defend their program. Sixteen out of 37 did not show.

“Therefore, committee members were unable to ask their questions and/or receive clarification of any of the data that was provided,” Diaz reported.

He recommended them for the chopping block.

The Transportation and Tourism subcommittee suggested ways to cut $156 million, and they don’t look good for the state’s economic development programs, already largely targets for elimination by House leaders.

To hold law enforcement programs harmless, the panel would take $50 million from Visit Florida. Cultural and museum, historic preservation, and library grants would be cut.

To meet its big target — $321 million — the panel would raid trust funds supporting economic development and contributions to outreach programs to Korea, Japan, and Latin America.

Additionally, the committee would have to target trust funds for affordable housing or state transportation projects. It did not give any numbers.

Task Force wants money to fight encroachment on Florida military bases

Florida would place its military installations at risk of commercial encroachment — and, possibly, closure — without adequate funding for land acquisition through the Florida Forever land acquisition program, a military support organization warned Thursday.

Some $3 million from U.S. Department of Defense funds will be lost at the end of 2018 unless the state provides matching funds, said Bruce Grant, Enterprise Florida vice president for military programs, during a meeting in Tallahassee with the Florida Defense Support Task Force.

The task force operates under Enterprise Florida’s purview.

“Most legislators may not connect (Florida Forever) with military land buffering,” Grant said. “But there is a connection.”

He referred to federal program called REPI — the Readiness and Environmental Protection Initiative. Since 2002, REPI has matched $19.4 million against $72 million in state funds to protect more than 68,000 acres buffering military bases.

The Legislature is considering spending $15 million on Florida Forever in the next budget, with $5 million tagged for the Florida Keys, Grant said.

Florida needs to pony up for land acquisition near Naval Air Station Whiting Field, in Santa Rosa County, and the Avon Park Air Force range or lose the federal matches, Grant said.

Additional projects would shield Tyndall Air Force Base in Bay County, and Camp Blanding, near Starke, the main training base for the Florida National Guard.

“With limited funding in Florida Forever, it only goes so far,” said David Clark, director for the Florida Division of State Lands.

“We’re trying to leverage that as wisely as we can,” he said.

Senate President Joe Negron’s plan to stop discharges of toxic algae from Lake Okeechobee would divert billions of dollars from Florida Forever to finance water projects around the state.

Buffering acquisitions are intended to shield the state’s 20 military installations against nearby commercial development that might compromise their missions — say, a housing development along a runway approach, or near a target range.

With the federal government expected to review bases for closure in 2019 or 2021, “now is not the time to pull back and pause,” said Kellie Jo Kilberg, of the Florida Defense Alliance, which promotes military programs in the state.

“Now is the time for us to really come together and … fund those programs, so that our 20 installations here in the state, that we don’t lose those, and that we do continue to gain and add to the economy,” she said.

Also implicated is the state’s Defense Infrastructure Grant — DIG — program, which also draws federal REPI money. The state has consistently funded the program at around $1.6 million.

“For Okaloosa County, alone, I have just short of $1 million waiting for the county to be able to execute, using the DIG program funds,” said Jeff Fanto, a community planner at Eglin Air Force Base.

Rep. Clay Ingram, the Pensacola Republican who chairs the task force, shared those concern.

“It’s important that the military component at least he in the conversation with regard to spending those dollars,” Ingram said.

“Because some of the most pristine lands in this state are in these conservation areas and easements that we’ve created around our military installations. They’re worthy of funding,” he said.

“The other benefit, though, is making the installations more valuable and less likely to be closed,” Ingram said.

House panel votes to undo post-financial meltdown food stamps expansion

The House Appropriations Committee voted Wednesday to take food stamps away from 229,000 Floridians, including 157,000 children and 44,000 elderly and disabled people.

CS/SB 581, approved 18-9, would return eligibility standards for the Supplemental Nutrition Assistance Program, or food stamps, to pre-recession levels, Republican sponsor Frank White said.

No state money is at issue, he said — the program is financed entirely by the federal government, although the state goes halves on administration costs.

“I think every tax dollar is sacred. We should spend these tax dollars as if they were our own,” White said.

As of November, some 3.3 million Floridians drew food stamps, according to a staff analysis.

Florida was one of 40 states that enacted more generous eligibility standards following the recession — you could quality if you earned 200 percent of the federal poverty level.

The bill would return those standards to pre-recession levels — 130 percent of the poverty level, or 165 percent if you’re elderly or disabled.

Committee Democrats asked tough questions about the wisdom of the move. White emphasized the philosophic importance of helping people become more self-reliant.

“It’s important to remember that these were folks who were not eligible before the downturn,” he replied during one exchange.

“It’s very easy to give out a benefit during a difficult time. It’s very hard to pull it back.”

“This is a bad direction that we would go on, because we would be taking food off peoples’ tables,” said Shevrin Jones, a Democrat from Winter Park.

The bill also would set up a program to investigate whether beneficiaries own any assets. To be eligible for benefits, you’d need to hold no more than $2,500 in liquid assets — $3,250 if you’re older than 60 or disabled.

Citizens Insurance buying back $300 million in catastrophic coverage

Citizens Property Insurance Corp. can buy back some $300 million in reinsurance against a catastrophic storm because the risk of that happening is now projected to have fallen.

The company’s board of governors voted unanimously to approve the move during a conference call Wednesday.

Citizens, Florida’s property insurer of last resort, bought the coverage from Everglades Re II Ltd. in 2015.

The company will repurchase catastrophic coverage at prices keyed to the new estimates of the threat, spokesman Michael Peltier said.

“It allows us to go into the market with more flexibility,” he said. “It no longer makes sense for us to insure against that exposure level.”

It isn’t clear yet how much Citizens could save.

“We won’t know until our 2017 buy,” Peltier said.

House budget panel votes to get tougher on public contributions to pro teams

A bill that would ban professional sports teams from building or refurbishing stadiums on public land passed the House Appropriations Committee Wednesday on a 21-8 vote.

CS/HB 77, by Bryan Avila, says “a sports franchise may not construct, reconstruct, renovate, or improve a facility on public land leased from the state or a political subdivision thereof.”

The bill — one of a number targeting professional sports — also says the sale of public land for sports stadiums must be at fair market value.

Furthermore, teams would have to assume public debt undertaken for their facilities if they move away.

Sports franchises are highly successful businesses, Avila said.

“They are more than capable of acquiring that land by raising the capital necessary,” he said.

Florida is home to 10 professional sports franchises, of which eight would be affected — the Tampa Bay Buccaneers, Lightning, and Rays; the Florida Panthers and Marlins; the Miami Heat; the Jacksonville Jaguars; and the Orlando Magic.

Pro teams, with their highly paid legal talent, too often take advantage of local officials, Republican Michael Bileca said.

“The advantage always goes to the owners of the franchises,” he said.

Teams with existing leases would be grandfathered under the bill.

Sen. Greg Steube has a companion bill in the Senate. Another measure, SB 236, by Sen. Tom Lee, would dismantle tax subsidies for professional sports facilities.

Committee hearing delayed on Anitere Flores’ tax swap legislation

A committee test turned into an anticlimax Wednesday for a Senate bill that would trade a tax break for insurance companies for one to benefit phone, cable, and satellite communications customers.

The Appropriations Subcommittee on Finance and Tax adjourned abruptly after approving a bill making technical changes to align Florida’s corporate income tax to the federal tax code. The Legislature makes the adjustment every year.

Sen. Anitere Flores didn’t show up to present what was to have been the headliner bill — SB 378, repealing a $435 million salary tax credit for insurers to finance a nearly $231 million tax break on communications services.

Chairwoman Kelli Stargel said she’d informed Flores that only three of the committee’s five members would be there.

“I thought this was a pretty weighty subject that needed to be handled by more than just three senators on the committee. We’ll bring it up next time,” Stargel said.

Was the bill in trouble?

“No, not that I’m aware of. It’s just that we didn’t have everybody here,” Stargel said.

Sen. Rene Garcia was in another committee hearing presenting a bill for Sen. Dorothy Hukill, who is recovering from surgery for cervical cancer, Stargel said.

Sen. Daphne Campbell was also missing. Stargel didn’t know why. Campbell said she’s been fighting allergies in Tallahassee’s pollen-rich environment and was held up in a meeting with constituents.

The bill is a priority for Senate President Joe Negron. It would cut communications services taxes by 2 percent and eliminate a 15 percent tax credit on salaries insurers pay their employees.

AOB reform passes House subcommittee, but it wasn’t pretty

The Legislature has been arguing over assignment of benefits reform for years, to no avail. Tuesday, Tampa Republican James Grant found out why — the hard way.

The lesson was delivered by the House Insurance & Banking Subcommittee, which defeated by a single vote Grant’s bid to resolve the issue by boosting consumer protections and requiring the collection of data to allow policymakers to get a firmer hand on the problem.

The committee opted instead for an earlier draft of HB 1421, sponsored by Grant and Rene Plasencia, a Republican from Orlando. It passed, 14-1.

“You have a challenge of landing an issue that has multiple stakeholders on both sides. We tried to put something together that would have been the middle lane between the House and Senate proposals,” Grant said following the vote.

“We heard from people on both sides of that lane that they would prefer no bill or they would prefer the underlying bill,” he said. Now, “we’re going to continue working with all the stakeholders and committee members to see if we can find common ground.”

A major bone of contention was attorney fees. The bill as adopted would link fees to pre-litigation offers of judgment — if the plaintiff wins more than the insurer offers, the insurer pays; if less, the insurer collects.

The bill also requires that policyholders receive notice if a contractor files suit, and an opportunity to withdraw from the agreement without penalty.

Grant argued that would simply encourage unscrupulous contractors to spread out statewide in search of homeowners willing to sue.

He was unwilling to risk that.

“The question is, do we wrestle into the world of the one-way attorney fees, or do we simply try to make all the fixes (in his amendment) to reform the bad actors,” Grant said.

The amendment took a beating during testimony — contractors, insurers, attorneys, and business interests, for the most part, preferred the original language or nothing at all.

What might have killed the amendment, in the end, was uncertainty over whether it would lower insurance rates.

“If this isn’t going to lower rates, I’m not sure what we’re doing,” Tampa Democrat Sean Shaw said.

AOBs are contracts in which a policyholder signs away all rights to a claim in exchange for a quick repair. They’ve been on the upsurge in water damage claims, but they also apply to car and health insurance claims.

But they can be abused, leading to shoddy or inflated repairs and frivolous lawsuits, according to insurers and the state Office of Insurance Regulation. Trial attorneys argue lawsuits are reactions to insurers that reject claims or offer inadequate settlements.

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