FEDC Inside Track for Legislative Affairs: Week of Feb. 4-8

FEDC Legislative Report
Week of February 4-8
Interim Committees for 2008

As we head into the last month before the 2008 Annual Florida Legislative Session begins, the pace is beginning to pick up here in Tallahassee. We continue to see more bills being heard, larger agendas for the committees and longer hours scheduled for each committee to meet. This was the first week the Legislature convened since the Governor released his recommended budget. Presentations were made throughout the Capitol regarding the recommendations, and legislators were given their first opportunity to ask questions.

Listed below we have provided an overview of the week here in Tallahassee.

House Economic Expansion & Infrastructure Council

The House Economic Expansion & Infrastructure Council, chaired by Representative Dean Cannon (R-Winter Park), met on Friday, February 8.  Lisa Saliba, Policy Coordinator, Governor’s Office of Policy and Budget, presented the Governor’s Budget Recommendations for Fiscal Year 2008-2009. In addition, Dr. Dale Brill, Director, Governor’s Office of Tourism, Trade and Economic Development (“OTTED”) gave a presentation on the Governor’s Blueprint for Florida’s Innovation Economy.

Dr. Brill’s presentation provided a comparison between the amount of funding for economic development and expansion this year verses funding in the prior fiscal year (“FY”).

Overall, the Governor is recommending a decrease of $47 million in OTTED funding, with the following specific budget allocations:

• $200 million decrease in funding for the Innovation Incentive Program. This represents a $200 million cut from FY ’07-’08.
• $45 million funding for the Quick Action Closing Fund. This is a continuation budget.
• $40 million for film and entertainment incentives. This represents a $15 million increase from FY ’07-’08.  
• $23.5 million for the Qualified Target Industry, Qualified Defense Contractor Tax Refund Incentives and the High Impact Performance Incentive Fund. This is a continuation budget.
• $43.3 million for the Visit Florida budget. This is a $10 million increase from FY ’07-’08.
• $15.5 Million for Enterprise Florida. This is a $3 million increase from FY ’07-’08.
• $10 million for Space Florida. This is a $3 million increase from FY 07-08.
• $3 Million for the Florida Sports Foundation. This is a continuation budget.
• $14.2 million for military, rural development and transportation capital outlay projects ($10 million is for the Road Fund). This is a continuation budget.
• $2.9 million for international relationships and the unique geographic and cultural characteristics. This represents a slight increase of $400,000 over FY ’07-’08.
• $7.2 million rural communities, Brownfield areas and military bases. This is a slight increase of $200,000 over FY ’07-’08.
• $3.1 million to enhance minority business. This is a slight increase of $100,000 over FY ’07-’08.

During the presentation, Representative Rich Glorioso (R-Plant City) requested that the Committee look at increasing the recommended funding for the Road Fund.

Chairman Dean Cannon asked that Dr. Brill come back to the Council with recommendations on how it could assist in lessening government regulations on Florida-domiciled businesses, as well as those wanting to relocate to Florida. Using Alabama as an example, which he described as a business-friendly state because of its ability to streamline and expedite government regulations when recruiting or expanding businesses,  Representative Cannon indicated his desire to make this issue a Committee priority.

House Economic Development Committee

In the House Economic Development Committee, Dr. Brill gave the same presentation on the Governor’s recommended budget for OTTED and the Innovation BluePrint.

Some of the questions and comments from the Committee included:

Representative Michael Grant questioned from where the funding for research and development (“R & D”) tax credits would come from. Dr. Brill recognized that this was more of a traditional model and does not currently include and R & D tax credits. He said at this point it would be hard determine how tax credits would affect the budget.  He wanted to point out that he was concerned that the proposed budget moved funding from the Opportunity Fund, where the private sector chooses recipients, to the Innovation Fund, where government chooses the recipients. He felt this was a step backward from the legislation he had passed with Senator Jeremy Ring during the previous Session.  He said the Committee would continue to address that issue as the budget moved through the process.

Representative Grant also questioned the lack of incentives being provided for small business start-ups in comparison to Alabama. Dr. Brill recognized that Alabama has become much more competitive with Florida due to its lower thresholds for business incentives. He stated that currently Florida tries to compete with the Quick Action Closing Fund, but that the restrictions it sets forth are tighter, resulting in the creation of a gap between what Florida can offer and what Alabama is currently offering.

Representative Grant asked if there were other ways Florida could help alleviate some of the burden on economic development and growth, particularly relating to local governments’ authority on permitting, reductions of impact fees and other restrictions that discourage growth. Dr. Brill said that OTTED was working on looking into these different areas and whether they were conducive to economic development.

Dr. Brill told the Legislature that he understands it is a difficult budget year and that it will be forced with making some tough decisions.  He characterized his presentation as OTTED’s best effort at creating opportunities to invest for the next fiscal year.

Representative Will Weatherford (R-Zephyrhills) asked if Florida were leveraging funds from the federal level and, if not, was the State leaving cash on the table? Dr. Brill said that Florida is working where it can by creating public-private partnerships and educating different businesses about some of these opportunities. However, he acknowledged that better budget times will create the ability to provide more matching funds to seek federal dollars more aggressively. 

Representative Weatherford also wanted to know how to ensure right decisions regarding the award of funds.  Admitting that this point was the toughest part of his job, Dr. Brill explained his Department’s efforts to move away from the first-come, first-serve model in an effort to award the most deserving of recipients.  The OTTED gauges performance measures and must deny some applicants because they fail to meet the set thresholds. He admitted that he feels a responsibility to the economic developers all over the state who research and look for opportunities and tries very hard to respect the work they do, while managing expectations.

Representative Marti Coley then spoke about how crucial the Quick Action Closing Fund was to the rural areas in her district. She had filed a bill the previous year to help those who missed the threshold by one qualification. She wanted to know what the Legislature could do to help in this regard. Dr. Brill was hesitant in his response, explaining that ” . . . because to do something here would require more funding and currently that is hard to come by.”

Dr. Brill did recognize that there is a need to look at freedom for waivers and to ensure that as the economy evolves, that attention is paid to present needs, as well as future investment. He hopes that by continuing to invest another future economic downturn will be avoided.

Acting Chairwoman Representative Dorothy Hukill (R-Daytona Beach Shores) ended the discussion by saying the Committee will continue working to ensure the State is spending its dollars wisely in this arena.

To view the meeting packet for this Committee, click here.

Senate Transportation and Economic Development (TED) Appropriations

The Senate Transportation and Economic Development Appropriations Committee, chaired by Senator Mike Fasano (R-New Port Richey), met on Thursday, February 7th. Chairman Fasano began the meeting with an overview of the Committee’s budget reduction timeline and the creation of the next fiscal year budget. He also stated that his goal for the Committee would be go beyond the assigned four percent budget reduction, so that it would be best positioned for another bad budget year with no negative carryover.

Senator Fasano especially was interested in locating potential vacant full-time employee (“FTE”) positions to cut. He then informed the Committee and the audience that the Committee meeting for the following day had been canceled and asked presenters to keep that in mind as they attempted to complete their agenda.

Barney Bishop, President and CEO of Associated Industries of Florida (“AIF”), gave a presentation on the Economic Stimulus Package of incentives, economic development and public works jobs that AIF felt would help correct the economic downturn. There were eight parts to the package:

• Improving Infrastructure

1. Promoting road development (AIF felt this was the most critical piece)
2. Providing affordable housing (using the dollars available the Sadowski Trust Fund)
3. Encourage school investments
4. Create alternative water supply solutions (creates jobs)
5. Give Ports a competitive edge

• Private incentives
• Security issues of overlapping federal codes and state codes are driving up the costs in Florida making it less attractive
• Building distribution centers and proper port warehouses could increase port revenue for Florida

Cultivating Florida’s Technological Future

6. Maintaining Florida’s position as the leader in Space (bridging gap after shuttle launches end and competing with Virginia’s incentives)
7. Increase support for Research Institutes (continue support for synergistic growth)

Investing in International Tourism

8. Strategic marketing in key domestic and international markets (the U.S. dollar has become affordable to foreigners, and Americans should capitalize on their ability to travel and spend money here)

Chairman Fasano felt this was a very good economic stimulus proposal and asked if there was a dollar amount tied to the proposal. Mr. Bishop stated that AIF would leave that up to the Committee to determine. The Chairman said that he would be filing the economic stimulus package for the Senate and he looked forward to working with the different groups during that process. To view this presentation please click here.

The same AIF presentation was made regarding the budget where Lisa Saliba, Policy Coordinator, Governor’s Office of Policy and Budget, presented the Governor’s Budget Recommendations for FY 2008-2009. In addition, Dr. Brill, Director, Governor’s Office of Tourism, Trade and Economic Development gave a presentation on the Governor’s Blueprint for Florida’s Innovation Economy. Dr. Brill also gave the Senate Committee a 2007-2008 Incentives Update.

Following are the highlights from this presentation:

Out of the Innovation Fund:

• Max Planck was awarded $94.09 million with a forecasted return of 135 jobs created in the first seven years of operation and 1,824 employees supported by the project (direct and indirect) over the next 20 years.  State government revenues over 20 years are expected to total $363 million.
• The Vaccine and Gene Therapy Institute was awarded $60 million with a return of 200 jobs created in the first 10 years of operation, and 1,466 employees supported by the project (direct and indirect) over the next 20 years.  State government projected gross revenues over 20 years total $279 million.
• UM Human Genomics was awarded $80 million with a return of 296 jobs created in first five years of operation and a projection of 1,274 employees supported by the project (direct and indirect) over the next 20 years.  State government gross revenues over 20 years would total $196 million.

Out of the Quick Action Closing (“QAC”) Fund

• Fermenich was awarded $2 million, which created 240 new jobs and retain 150 jobs. It expects a return on investment of $11.84 for each $1 out of the QAC over 10 years.
• Airtran was awarded $3 million which will create 121 new jobs and retain 290 jobs. It expects a return of $9.43 for each $1 out of the QAC over the next 10 years.
• Osprey was awarded $20 million which is expected to create 454 new jobs and retain 963 jobs. It expects a return of $3.86 for each $1 out of the QAC over the next 10 years.

There were also examples given for the projects awarded from the Innovation Fund from the 2006-2007 budget. Those projects included:

• Burnham Institute for Medical Research
• SRI International
• Scripps
• Torrey Pines Institute for Molecular Studies  

Dr. Brill stated that the Scripps project attracted $12 million worth of grants last year. He also indicated that there has been a tremendous increase in oversight for these projects since Scripps. The committee expressed an interest in having a presentation that would report the different levels of funding from the state, counties and private entities involved.

During the presentation Senator Tony Hill (D-Jacksonville) referenced an article he had read regarding the awards of state dollars from these funds. He was concerned that the allocated funds for these projects had no accountability measures in place if the awarded companies did not comply with their commitments.

Dr. Brill assured him that there are performance measures in place and that funding is released once they have reached those performance measures.

To view this presentation please click here.

Budget 2007-2008

The House Councils will be traveling to Tallahassee during the Week of February 11-15 to begin addressing the needed budget reductions for the fourth quarter of FY ’07-’08.

The Senate Appropriations Committee will be holding its meetings during the week of February 18-22. It is expected to take up and vote on these reductions during the first couple weeks of the Regular 2008 Legislative Session.

Reducing the budget in the range of $300 million is being considered. This will be the third time the Legislature has addressed the ’07-’08 budget due to continued revenue shortfalls.

2008-2009

Both Chambers have been listening to presentations on the Governor’s recommended budget. The Legislature will be working simultaneously on creating next year’s budget while it evaluates reductions for ’07-’08.

News from the Governor’s Office

Governor Crist announced this week that Democratic Representative Frank Peterman that was selected to head the Florida Department of Juvenile Justice after outgoing Secretary Walt McNeil was named the new Secretary for the Florida Department of Corrections.

Representative Peterman currently represents the St. Petersburg area in the Florida House and has been active as a ranking Democratic member of the House Juvenile Justice Committee.

This will create a vacancy in the current House District 55 seat, which includes parts of Hillsborough, Pinellas, Manatee and Sarasota County.  No date for the required Special Election to fill that vacancy has yet been set.

Governor Crist Appoints Lucia M. Fishburne as Film Commissioner of  the Office of Film and Entertainment

Governor Charlie Crist on February 11 appointed Lucia M. Fishburne to serve as Film Commissioner of the Office of Film and Entertainment (“OFE”) within the Office of Tourism, Trade and Economic Development (“OTTED”), an agency of the Executive Office of the Governor.

“Lucia’s understanding of film and digital media and her experience in the development of Florida’s film industry makes her an excellent choice for this position,” said Governor Crist.  

OTTED Director Dale A. Brill, Ph.D., added, “Lucia’s background in workforce development and her years of service on our Florida Film and Entertainment Advisory Council (“FFEAC”) puts her in a position to lead and enhance film and entertainment’s economic impact on the state.”

Fishburne most recently served as the Communication’s Director for Workforce Florida Inc. (“WFI”) where she assisted in the development and implementation of state-level marketing, communications and public relations strategies for Florida’s workforce system.  She has served on the FFEAC for over eight years, which advises the OFE on matters of concern to the film, TV and digital media industries. She was the Executive Director of the Florida Institute for Film Education (“FIFE”) where she was able to expand her knowledge of the film and entertainment industries and interface with local film commissions statewide.  Fishburne holds a master’s degree in Marketing, Communication and Information Technology from Florida State University, with a nationally-recognized Accreditation in Public Relations (APR).

“I look forward to serving the citizens of Florida as a part of the Crist team,” said Fishburne, “To continue the growth of the film and entertainment industries in Florida and to serve its workforce and infrastructure.” 

Fishburne replaces Paul Sirmons, who will continue to serve until Fishburne takes office.   Sirmons, who has held the position for two-and-a-half years, is returning to family and faith-based film production in the Orlando area.

The Office of Film and Entertainment assists the Governor and Lt. Governor to serve and build Florida’s film, TV and digital media industries in Florida.

 

Should you have any questions or comments, please contact:

Frank Mayernick at (850) 251-8898
Tracy Mayernick at (850) 445-3000
Colodny Fass, P.A.