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Looking back at the 10 big issues of the 2018 Legislative Session

The Florida House and Senate ended the 2018 Legislative Session Sunday by passing a budget and a tax-cut package for the upcoming year. The Session became dominated in February by the aftermath of the mass shooting at Marjory Stoneman Douglas High School in Broward County. That led to a massive debate about how to improve school safety and whether to revamp the state’s gun laws.

Here is a recap of 10 big issues from the 2018 Session:

Budget

Lawmakers passed an $88.7 billion budget for the fiscal year that starts July 1, though they were forced to extend the Session by two days to finish the spending plan. The budget includes increased funding for education, with per-student spending in the kindergarten through 12th-grade system going up $101.50. The Senate also pushed through increased funding for nursing homes, while the House blocked a Senate attempt to change the way some Medicaid money is distributed to hospitals.

Health care

After years of legal battles in the hospital industry, lawmakers approved a plan to revamp the approval of new trauma centers. They also approved a long-discussed proposal that could lead to the use of “direct primary care” agreements, which involve patients and doctors contracting directly for primary care, reducing the role of insurers. The House, however, was unable to convince the Senate to go along with eliminating the controversial “certificate of need” regulatory process for hospitals.

Higher education

Throughout his term as Senate president, Stuart Republican Joe Negron has made a top priority of revamping the higher-education system. Gov. Rick Scott on Sunday signed a wide-ranging bill that includes permanently expanding Bright Future scholarships. The bill also calls for expanding some need-based aid programs and would require the state university system to use a four-year graduation rate as part of its performance-funding formula, instead of the current six-year measure.

Hurricane Irma 

Lawmakers came into the Session still grappling with the effects of Hurricane Irma, which slammed into the state in September and caused billions of dollars in damage. The House and Senate took steps such as ratifying rules for nursing homes and assisted living facilities to have backup generators and fuel supplies to help keep the facilities cool. Scott’s administration issued the rules after residents of a sweltering Broward County nursing home died after Irma knocked out the building’s air-conditioning system.

Insurance

The two highest-profile insurance issues of the Session involved proposals to eliminate the no-fault auto insurance system and revamp a controversial practice known as “assignment of benefits.” In the end, however, both issues died. The House approved repealing no-fault, which includes a requirement that motorists carry personal-injury protection, or PIP, coverage. But the proposal couldn’t get through Senate committees. Similarly, the Senate did not approve changes sought by insurers in assignment of benefits.

K-12 education

House Speaker Richard Corcoran and other school-choice supporters got a victory Sunday when Scott signed a controversial bill that will expand voucher-like scholarship programs. The bill includes creating the “hope scholarships” program, which will help pay for children who have been bullied in public schools to transfer to private schools. The bill also includes a heavily debated change that targets teachers’ unions whose membership falls below 50 percent of the employees they represent.

Opioid epidemic

In one of the final issues decided during the Session, lawmakers late Friday approved a bill to stem the opioid epidemic that has caused a surge in overdoses across the state. A key part of the bill calls for placing limits on prescriptions for opioids. In most cases, the bill would place three- or seven-day limits on prescriptions, though it includes exemptions for people who are terminally ill, need palliative care or suffer from major trauma. The idea behind the limits is to prevent patients from getting addicted to painkillers.

Parkland aftermath

The Feb. 14 shooting deaths of 17 people at Marjory Stoneman Douglas High School in Parkland forced lawmakers to quickly deal with school-safety issues and spurred a contentious debate about gun laws. Scott on Friday signed a $400 million package that includes improving mental-health services and allowing trained employees to bring guns to schools. The package also raises the minimum age to 21 and imposes a three-day waiting period for people buying rifles and other long guns. The National Rifle Association quickly filed a federal lawsuit challenging the age restriction.

Tax cuts

Getting ready to hit the campaign trail, lawmakers Sunday approved a bill that includes about $170 million in tax breaks. The measure includes holding a three-day tax “holiday” in early August to allow back-to-school shoppers to buy clothes and school supplies without paying sales taxes. A similar seven-day “holiday” will be held in early June for residents to buy hurricane supplies. The bill also includes tax breaks for farmers and ranchers who suffered damage in Hurricane Irma and would trim a lease tax paid by many businesses.

Texting while driving

With support from Corcoran, it appeared lawmakers this year could approve a long-discussed idea to toughen Florida’s ban on texting while driving. But the proposal did not make it through the Senate, at least in part because of concerns about racial profiling of minority drivers. Currently, texting while driving is a “secondary” offense, meaning motorists can only be cited if they are pulled over for other reasons. The proposal would have made it a primary offense, with police able to pull over motorists for texting behind the wheel.

Democrats hammer Rick Scott’s finances, statements with new digital ads

Republican Gov. Rick Scott still isn’t officially in the race for Florida’s U.S. Senate election this year but that’s not stopping Democrats from hammering him with two new digital ads being released Monday, raising questions about his financial blind trust and his missing nursing home voicemails.

The Democratic Senatorial Campaign Committee is releasing the digital ads “Truth” and “Blind,” and both question whether Scott is using the governor’s office to enhance his own wealth.

“Rick Scott has only ever looked out for one person: himself,” David Bergstein of the Democratic Senatorial Campaign Committee stated in a news release. “In order to advance his agenda, Scott’s shown he’ll mislead Floridians, abuse his position as governor to make himself richer, and help his political donors and cronies at Floridians’ expense. He’ll say and do anything to benefit himself, which is why Floridians just don’t trust Scott to look out for them.”

Scott is widely anticipated to be preparing a run for the U.S. Senate against Democratic U.S. Sen. Bill Nelson this year, and most polls have shown the race to be fairly close. However, he has not filed yet, leaving a little of a gray hole on if and how he might respond. The governor’s office was asked if it would respond but has not done so yet.

The “Blind” ad cites media reports including one from the Tampa Bay Times and FloridaBulldog.com that suggest that Scott’s has handled his finances in a way as governor that would not be permitted if and when he runs for federal office, and raising questions about potential conflicts of interest.

“Is Rick Scott using the governor’s office to enrich himself? He’s had a close business partner manage his so-called blind trust, something prohibited for federal officeholders,” a narrator inquires. “He’s a walking conflict of interest, taking actions as governor to help entities doing business in Florida that he’s owned stock in. One company he owned just sold for $825 million, but he won’t tell us how much he personally made — hiding behind a secretive blind trust. Rick Scott: is he in it for Florida, or for himself?”

The other ad, “Truth,” questions three different instances in which the narrator contends Scott cannot tell the truth, including an oldie used against Scott in his first election run in 2010: a deposition video in which he appears to be unwilling to even acknowledge his own signature in a suit alleging Medicare fraud against his former company. The ad also cites the missing cellphone voicemails dating from his conversations last September with nursing home executives about Hurricane Irma and finishes again with questioning the source of his personal wealth.

“He refused to tell the truth 75 times under oath when he led a company that was fined 1.7 billion for committing the largest Medicare fraud in history,” the narrator states. “He hid the truth by deleting voicemails on his cellphone during the recent nursing home tragedy. He has avoided telling the full truth about how he’s increased his personal wealth by 46 million dollars while governor. Let’s face it, Rick Scott just can’t tell the truth.”

House, Senate sign off on nursing home generators

Nursing homes will be required to have generators and 72-hour fuel supplies onsite by July 1, under a rule issued by Gov. Rick Scott’s administration and approved Monday by the Legislature.

The House unanimously approved a measure (HB 7099) that ratified the rule, and the Senate followed suit later in the day.

The chambers still differ, though, on whether to impose similar backup power mandates on assisted living facilities, which were included in a different rule. Ratifying the pair of rules has been a top priority for Scott’s administration during the 2018 Legislative Session.

“Our position has not changed — assisted living facilities need to be included,” said Lauren Schenone, a spokeswoman for the Governor, adding that “we are continuing to work with the Florida Legislature to make sure this gets done.”

The rule requires nursing homes to have backup power capability and adequate fuel supplies to maintain safety systems and equipment needed to maintain indoor air temperatures for 96 hours after a loss of electricity. According to the state, the rule will increase costs by more than $121 million in the next five years.

The Agency for Health Care Administration issued the rule after earlier imposing emergency rules that drew concerns from health-care facilities. The rules followed the deaths of residents of The Rehabilitation Center at Hollywood Hills in Broward County after Hurricane Irma. The storm knocked out the nursing home’s air-conditioning system, which led to sweltering conditions.

The emergency rules were challenged by a trio of long-term care associations and were subsequently invalidated by a state administrative law judge.

The state appealed the decision and continued to enforce the emergency rules, and Schenone said, “hundreds” of nursing homes and ALFs are complying.

The permanent rule ratified Monday came after negotiations between the Scott administration and long-term care facilities. The permanent rule does not require generators to be installed, which opens the possibility of portable units.

Steve Bahmer, president and CEO of the industry group LeadingAge Florida, said the nursing-home rule puts in place what his association and others had worked on with the Scott administration and Agency for Health Care Administration Secretary Justin Senior since Hurricane Irma. Bahmer, whose association successfully challenged the emergency rules, said he was pleased with the legislative ratification.

“It achieves the goal we have pursued since last fall — helping to ensure that seniors are safe during and after an emergency, while providing the flexibility that is necessary for it to be effective in a state as large as Florida,” Bahmer said in an email.

Bahmer, whose association also represents assisted living facilities, said he hopes the House has a change of heart about ratifying the ALF rule.

House Health & Human Services Chairman Travis Cummings, a Fleming Island Republican, has repeatedly said he has concerns with ratifying the ALF rule because of the costs and said his concerns were “shared by others.” The backup generator mandate is expected to increase regulatory costs for roughly 3,000 assisted living facilities by about $243 million over the next five years.

To abate the House’s concerns with the regulatory increases for ALFs, the Senate during budget negotiations suggested creating a program that would allow facilities to get upward of $1,000 from the state to help offset the costs.

With the annual Legislative Session scheduled to end Friday, long-term care providers remained hopeful Monday that the House will agree to ratify the ALF rule.

LeadingAge Florida’s Bahmer said the ALF rule “offers clarity for providers, which is important in terms of helping ensure that the rule can be consistently implemented across the state.”

Senate, House remain split on generator rules

With less than a week left in the Legislative Session, the Senate and House continued to have differences Monday about ratifying a pair of high-profile rules that are a priority of Gov. Rick Scott.

The Senate on Monday voted 37-0 to pass a bill (SB 7028) that would ratify a rule requiring assisted living facilities to have backup electrical generators that can help keep buildings cool. The rule is projected to cost roughly $243 million for the 3,000 assisted living facilities in the state to comply. The Senate, however, deferred action on a bill (SB 7030) that would ratify a similar generator rule for nursing homes.

The House, meanwhile, voted 113-0 to pass a bill (HB 7099) that would ratify the proposed nursing home rule. The House has not introduced legislation to ratify the rule for assisted living facilities because of concerns about the steep price tag.

The 60-day Legislative Session is scheduled to end Friday.

Scott’s administration initially issued backup-power requirements through an emergency rule following the deaths of residents at The Rehabilitation Center at Hollywood Hills, a Broward County nursing home whose air-conditioning system was knocked out by Hurricane Irma.

Lawmakers approve post-hurricane KidCare aid

Despite an earlier assertion from a top Medicaid official that the state could be giving a “freebie,” lawmakers have agreed to fund Florida KidCare health-insurance premiums for more than 6,000 children living in 48 counties that were impacted by Hurricane Irma.

Legislators this week agreed to spend $20,339 in state general revenue for Florida KidCare premiums to cover monthly co-payment requirements. Justin Senior, secretary of the Agency for Health Care Administration, said the money will draw down $522,034 in federal matching funds and will cover the costs of about 6,000 children in the 48 counties who were disenrolled from the program for not paying premiums.

Following the hurricane, Gov. Rick Scott agreed to extend for 30 days the time frame to pay premiums for October coverage. The monthly premiums range from $15 to $20 based on family size and income.

The governor, though, never waived the requirement to pay premiums altogether, as some people had sought. Former Gov. Jeb Bush waived KidCare premiums for Florida families during the tumultuous 2005 hurricane season, and Texas received federal approval to waive premiums for families impacted last year by Hurricane Harvey.

House and Senate Democrats, as well as child health advocates, called on the Scott administration to cover the required premiums with tax dollars. But Beth Kidder, a deputy secretary at the Agency for Health Care Administration, told reporters in October that “tens of thousands” of families in the Florida Healthy Kids program paid their premiums on time and that waiving the requirements could reward people who dragged their heels.

 “Why would you give a freebie to those who did not act responsibly in the beginning?” she said at the time.

Senior said Friday that the Florida Healthy Kids Corp. board of directors told the agency in January to pursue a waiver from the federal government that would allow Florida to pay the premiums and draw down the federal funds.

State Rep. Bobby DuBose, of Fort Lauderdale, was one of five Democratic state representatives who sent a letter to the governor and Senior asking them to assist with the premiums. U.S. Sen Bill Nelson, health-care advocates and the Florida Senate Democratic caucus also called for the governor to act.

DuBose smiled Thursday night knowing the children didn’t lose their coverage for not timely paying the October premiums.

“The things you think are easy and make common sense are the things you work the hardest for,” DuBose said.

Affordable housing issues likely headed to budget chairs

The House and Senate in negotiations have seemingly agreed on funding for job and tourism incentives — but still are significantly apart on spends for hurricane-related affordable housing programs that are now expected to be ironed out by budget chairs Rep. Carlos Trujillo and Sen. Rob Bradley.

A recent Senate offer in the Transportation, Tourism, and Economic Development Conference cuts previous $30 million and $60 million allotments to the Hurricane Housing Recovery Program (HHRP) and the Rental Recovery Loan Program (RRLP), respectively. The offer came after the two programs were nearly unanimously approved Thursday in the House through the passage of HB 987. A similar bill (SB 1328) spawning HHRP is up for consideration in the Senate and had widespread support in committee meetings.

At first glance, the Senate cut is alarming. But it is more than likely an acceptance that funds will be swept from the Sadowski Trust, the source for the state’s affordable housing programs.

When the Senate passed its budget it proposed a little more than $104 million each to two major affordable housing programs: the State Housing Initiatives Partnership Program (SHIP) and the State Apartment Incentive Loan Program (SAIL). Anticipating the creation of HHRP and LLRP, the Senate funded those programs at $30 million and $60 million, respectively. It did not include any sweeps to the Sadowski Trust Fund, which is expected to have an estimated $308 million to $322 million for the upcoming fiscal year.

The House’s budget, however, did not fund SHIP or SAIL when it passed last month. But it did propose $45 million and $64 million for HHRP and LLRP, respectively — numbers not too far off from the Senate’s initial budget.

The lack of initial House funding for SHIP and SAIL is explained by its $182 million sweep of the Sadowski Trust.

The Senate is now factoring a similar sweep into its affordable housing proposals and has offered to fund SAIL and SHIP at around $70 million $40 million, respectively — without any funding for HHRP and LLRP.

Trujillo and Bradley will be tasked with determining which programs they’d like to see funded, given that so much is expected to be swept from the Sadowski Trust and that legislation creating hurricane-related affordable housing programs has received plenty of support as it has traveled through both chambers.

Altamonte Springs Republican Rep. Bob Cortes, who sponsored HB 987, said that the issue will “more than likely” be bumped to budget chairs at 10:30 a.m. on Friday, and he’s confident that HHRP and LLRP will be brought into the fold.

Cortes said that HHRP is modeled after SHIP and LLRP after SAIL; both seek to lessen the burden of developing affordable housing, which includes addressing impact fees, cost of land and permit delays. The difference is that HHRP and LLRP can only be activated to address problems stemming from a hurricane.

The two hurricane-related affordable housing programs have the backing of Gov. Rick Scott, which is another element that Trujillo and Bradley — and even Senate President Joe Negron and House Speaker Richard Corcoran  will have to keep in mind when finalizing the budget

Scott asked for $65 million for the Hurricane Housing Recovery Program and $25 million for the Rental Recovery Loan Program as part of a $100 million Hurricane Irma affordable housing relief package he announced last November. 

Regardless of how the programs are funded, Cortes said that their creation alone is an indication that the state is addressing affordable housing issues.

“All of us are in agreement that this will be a catalyst,” Cortes said.

With respect to VISIT Florida and the Job Growth Grant Fund, the House and Senate seem to be on the same page, but still short of Scott’s $100 million ask for the state’s premier tourism-marketing agency.

In their initial budgets, both chambers proposed $85 million for the Job Growth Grant Fund. The Senate proposed a $50 million expense on VISIT Florida and the House proposed $76 million. The Senate has since upped its allotment to $76 million.

Rep. Clay Ingram, chair of the House Transportation and Tourism Appropriations, pointed to last year’s funding at $76 million as a means of justification for not spending $100 million on VISIT Florida.

“It’s a little less than what [Scott] asked for, but it’s $25 million more than what the Senate had,” Ingram said. “So, hopefully [Scott] likes the place we kind of met in the middle … They are fully funded, that’s how I look at it.”

Pointing to more discrepancies, Ingram said the Senate has more projects funded in the Department of Economic Opportunity and the Department of State. He anticipates there will not be enough excess dollars to fund those projects. 

“There’s only so much money to go around,” Ingram said.

Ingram suggested the conference will next convene sometime early Friday morning.

House backs rule for nursing home generators

A House committee on Tuesday agreed to take steps to ratify a rule requiring nursing homes to have backup-power sources but didn’t endorse similar requirements for assisted living facilities because of concerns about the costs.

Gov. Rick Scott in recent months has pushed for nursing homes and assisted living facilities to have generators that can keep buildings cool if electricity goes out.

McKinley Lewis, Scott’s deputy communications director, told The News Service of Florida on Tuesday that assisted living facilities need to be “included” in the mix and that the governor’s office is “continuing to work with the Florida Legislature to make sure this gets done.”

The House Health & Human Services Committee voted unanimously to introduce a bill that would ratify a rule issued by the state Agency for Health Care Administration, which regulates nursing homes. The proposed rule, which was hammered out by the Scott administration and the long-term care industry, would require nursing homes to have alternative power sources, such as generators, on site and 72 hours of fuel. The generators would need to be able to keep cool an area of no less than 30 square feet per resident at a temperature of 81 degrees Fahrenheit or lower for at least 96 hours.

The rule is estimated to cost nursing homes $121.3 million over the first five years, and about $66 million can be offset by Medicaid, according to a staff analysis. Agency for Health Care Administration Secretary Justin Senior told committee members that about $25 million of the $66 million Medicaid tab would be borne by the state.

Since 2010, Florida law has required legislative ratification of any rule that would increase the costs of doing business by more than $1 million over a five-year period.

House Health & Human Services Chairman Travis Cummings, a Fleming Island Republican, has repeatedly expressed concerns that requiring assisted living facilities to abide by backup power rules would result in an unfunded mandate on some of Florida’s smallest businesses.

The 2,951 assisted living facilities in the state would have to spend more than $243 million to comply with the requirements.

Scott’s administration has pushed for generators at ALFs and nursing homes since the deaths in September of residents of The Rehabilitation Center at Hollywood Hills, a Broward County nursing home that lost its air-conditioning system in Hurricane Irma. But long-term care providers have raised repeated concerns about issues such as costs and requirements to store fuel.

Assisted living facilities are designed to provide services in a less-restrictive and more home-like environment than nursing homes. They range from one resident to several hundred residents and offer various types of personal and nursing services.

Senior told members of the House committee that in the days following Hurricane Irma, the state emergency operations center had nightly phone calls with long-term care providers and that the Agency for Health Care Administration sent facility-surveyor staff across the state to get a gauge on what was occurring.

Senior said 1,677 assisted living facilities reported that they lost power during Hurricane Irma. Senior said facilities without backup power tended to have what he called employee abandonment, or staff not showing up for work.

He said that the “lack of staffing really put some frail elders at risk.”

Moreover, Senior said, the state “saw ALF residents, in particular, dumped inappropriately at special needs shelters and hospital emergency rooms.”

Cummings then asked Senior to focus what was in the bill and not on ALFs, which weren’t included in the bill.

As lawmakers tiptoe to budget negotiating starting line, state revenue estimate is cut by $167 million

With less than two weeks before the end of the 2018 Legislative Session, the pot of money lawmakers must work with in order to craft a state budget is shrinking rapidly.

At work are two factors: one is a revised estimate for state tax and revenue collections, the second is the estimated cost of the proposals crafted in response to the mass shooting that killed 17 people at Marjory Stoneman Douglas High School in Broward County

State analysts met Friday and reduced their previous estimate by $167 million, citing a continued decline in corporate income tax collections.

“While the data for February is still preliminary, it appears that only a small fraction of the expected total was actually received,” the new forecast said.

The analysis places the blame on the delayed payments on Hurricane Irma, which had prompted the Florida Department of Revenue to extend the due dates for corporate income tax filers.

The Revenue Estimating Conference cut its projection for corporate income tax collections in 2017-2018 by $94.3 million and by $73.1 million in 2018-2019, resulting in the $167 million decline in the overall estimate. Analysts projected the shortfall would be negated when the delayed payments began coming in, but that has yet to happen.

Analysts cut their projection for corporate income tax collections in 2017-2018 by $94.3 million and by $73.1 million in 2018-2019, resulting in the $167 million decline in the overall estimate.

Although lawmakers have not started formal negotiations on a new state budget, House leadership told FloridaPolitics.com Friday night that while allocations are not out, staff for the two appropriations committees have “opened up the columns,” a phrase used to describe when the House and Senate examine each other’s budget columns line by line so that they can match each other’s numbers. This is a necessary preliminary step in the budgeting process that allows legislative leaders to begin to formulate offers on allocations.

On Friday, Gov. Rick Scott and legislative leaders unveiled proposals to address school safety, gun laws and mental-health issues after the mass shooting in Parkland. House Speaker Richard Corcoran said at a news conference that lawmakers are expected to spend $400 million to $500 million on the issues, though details were still being worked out.

To bottom-line it: Friday was a very expensive day for the state of Florida. The downward revision of the revenue estimate ($167 million) plus the money for the school safety and gun laws ($400 to $500 million) means that lawmakers are working with half-a-billion dollars less than they were a week ago.

As one lobbyist who specializes in budgeting and appropriations described it to us, these new numbers are “game changers.”

The 2018 Session is set to conclude March 9.

Material from the News Service of Florida was used in this post.

Help for farmers advancing in Senate

Farmers and other parts of Florida’s agriculture industry could receive about $75 million in post-Hurricane Irma assistance from the state next year under a measure moving forward in the Senate.

The Senate Finance and Tax Appropriations Subcommittee on Tuesday unanimously backed the proposal (SB 1608) by Senate Agriculture Chairwoman Denise Grimsley, a Sebring Republican. The proposal, in part, would reduce property assessments on certain enclosed horticultural structures and offer tax refunds on materials used for construction of farm buildings and fences.

“We know from practice that ag typically needs a lot longer to recover from a disaster like Irma than most industries, especially when it comes to moving materials and products,” said Grimsley, who is running for state agriculture commissioner this year.

The Department of Agriculture and Consumer Services has estimated that Irma inflicted $2.5 billion in losses on the state’s agriculture industry.

The bulk of relief for the industry is expected to come from a federal spending bill that Congress approved this month. The bill includes nearly $90 billion for disaster relief, with $2.36 billion aimed at assisting the agriculture industry for losses from Hurricane Irma in Florida, Hurricane Harvey in Texas and Hurricane Maria in Puerto Rico.

Grimsley’s measure is moving as the Senate continues to put together a tax package that will have to be negotiated with the House over the next couple of weeks. The annual Legislative Session ends March 9.

The House has included several measures for the agricultural industry as part of an approximately $350 million tax package (HB 7087), which was approved by the House Ways & Means Committee last week.

The wide-ranging House package includes tax refunds on building materials, fencing and gas for farmers. Also, it includes a fuel tax refund on agricultural transportation and a tax break on citrus processing facilities that have been idled by Irma or by the industry’s fight against citrus greening disease.

The citrus industry is down 80 percent from its peak production years in the mid-1990s and faces a projected 33 percent reduction from last year’s harvest. It has been battling citrus greening for a decade and then was slammed by Irma, including in major citrus areas of Southwest Florida.

An amendment Grimsley made to her bill Tuesday would set aside $5 million for the Florida Agriculture Promotion Campaign within the Department of Agriculture and Consumer Services to expand initiatives promoting state agricultural products.

Before the promotional money was added, the state Revenue Estimating Conference estimated the package would cut state revenue by $59.5 million next fiscal year, with local governments facing a combined $15.4 million loss. The savings to taxpayers would fall to a combined $36.7 million a year thereafter.

$130M+ hit for Jacksonville from hurricanes, as financial storm clouds loom

Reimbursements will come sooner or later for the city of Jacksonville from the federal government for Hurricanes Matthew and Irma.

Until then, however, the impact of the storms will be felt in the city’s general fund budget.

The Jacksonville City Council Auditor’s quarterly report for the final three months of 2017 puts the figures in sharp relief.

“The latest Hurricane Matthew projection estimates the financial impact will be approximately $45.1 million. As of January 31, 2018, the City incurred expenditures of $28.0 million related to Hurricane Matthew,” the report contends.

“87.5% of the total allowable expenses are subject to reimbursement, leaving the City to fund the remainder. The fiscal year 2017/18 approved budget includes an appropriation of $7.0 million from the GF/GSD to cover the City’s estimated obligation,” the report adds.

Irma is worse: the financial impact will be approximately $86.4 million.

“This could result in an estimated $10.8 million negative impact to the GF/GSD in the future. As of January 31, 2018, the City incurred expenditures of $45.8 million related to Hurricane Irma,” the report contends.

Jacksonville’s general fund budget is $1.27 billion currently. Reserve levels are in the $150 million range.

Even before Hurricane Irma, there was pushback from the Jacksonville City Council in terms of bolstering the city’s reserve levels.

Mayor’s Office staffers cautioned that obligations were coming due and it would pay off to bolster reserve levels.

That ultimately was not convincing to the Council Finance Committee.

In September, Jacksonville Mayor Lenny Curry said that he was confident that the city had sufficient reserves to weather a storm with an impact comparable to that of Matthew.

However, Irma’s track created a greater impact.

With slow reimbursements, one wonders if the discussion of reserve levels will be a more forceful one this summer.

The city has already been dinged by analysts for high fixed costs. These, combined with a reluctance to hike taxes, are leading influencers and policy makers to take a hard look at JEA privatization, which could net the city $3 to $6 billion.

Meanwhile, the city has worries regarding increasing interest rates and the equity market volatility of recent weeks.

“Also, a flattening of the yield curve continued throughout the 4th quarter, as the current market expectation is that the Fed will raise rates approximately three times in 2018. The downward shift of the long end of the curve continues to be interpreted as a sign that increased volatility may be on the horizon,” the auditor’s report contends.

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