The Sunshine Economy -- Sex, Spending and the 2018 Legislative Session
The state’s economy may be booming, but money coming into the state government is less than expected and costs are higher, at least in the short-term, thanks primarily to Hurricane Irma. That is the financial environment as Florida lawmakers gather in Tallahassee for the 2018 legislative session.
The annual gathering promises to be a session unlike any other, not because of the financial environment but thanks to a new sex scandal swirling around the capital. Just hours before the opening gavel fell in the chambers, two South Florida senators admitted to having an extramarital affair. Democrat Oscar Braynon of Miami Gardens and Republican Anitere Flores of Miami released a statement asking for privacy "as we move past this to focus on the important work ahead.”
Tuesday morning an anonymous website posted what it claimed was video evidence of Sen. Flores entering Sen. Braynon's Tallahassee apartment. The two rent condos on the same floor of the same building. Last spring, Braynon discovered a surveillance camera in the hallway outside his door.
The statement from the two senators acknowledging the affair said their "longtime friendship evolved to a level that we deeply regret."
Four Florida senators have now been caught up in a sex or sexual harassment scandal. Republican Jack Latvala resigned in December after multiple women accused him of harassment and misconduct, leading to a Senate investigation. That probe found probable cause that Latvala violated Senate rules. It also referred the case for criminal investigation. Democrat Jeff Clemens resigned in October after admitting to an extramarital affair with a female lobbyist. Both the Latvala accusations and Clemens tryst were first reported by POLITICO.
Meantime, lawmakers begin the 2018 legislation session with just one required job -- pass a state budget. Doing so may be difficult as the state finds its monthly revenues coming up short of estimates.
Gov. Rick Scott's proposed budget calls for spending $87.4 billion -- a 2.8 percent increase over this year's state spending plan. Among the new spending is the governor's effort to increase K-12 public education spending by $200 per student -- a 2.7 percent boost from this year.
WLRN spoke with the two top lawmakers on the Florida House Appropriations Committee about the state's budget, spending priorities and how the sex scandals impact the legislative environment, Chairman Carlos Trujillo, R-Doral, and Jared Moskowitz, D-Coral Springs. (NOTE: This interview was conducted before the Braynon/Flores affair became public.)
WLRN: How do the sex scandals affect the legislative environment?
TRUJILLO: It has been the elephant in the room for many, many years. I'm proud to say as a member of the Florida House that none of these accusations have been levied against any of our members. It seems to be focused strictly on the Senate, but it's something that needs to be addressed. And I think the entire culture in Tallahassee when it comes to sexual harassment needs to change. I'm glad we're having the conversation.
How does it change the environment for the Legislature to pass a budget?
TRUJILLO: I think it puts a lot of pressure on the Senate. In the House, we're not dealing with those realities. In the Senate, there's been a lot of accusations. There are multiple members that have resigned. There's a lot of trust issues among some members and going forward it's going to be very difficult to pass their agenda.
MOSKOWITZ: Last year the Senate was disorganized. I think there was fighting among themselves. They kind of got their stuff together towards the end. But ultimately I think the whole atmosphere, not just within the Senate, but all of Tallahassee right now, is kind of on edge. You saw that really the last couple of weeks of committee week. I was never one that stayed out late, but just walking back from the Capitol to where I stay, people weren't in the restaurants. They weren't at the Governors Club. If you were having dinner with somebody, people wanted to know why. I think everybody is reassessing, you know, themselves and their priorities in this new atmosphere.
This edge, is it entirely attributable to the sexual harassment and the sexual comments that have now been made public?
MOSKOWITZ: Politics, for all of the talk about it being partisan, is also personal. There were already personality conflicts in the Senate that were on display last year. Those divisions now have grown dramatically.
How is this edge going to influence lawmaking, particularly as it relates to passing a budget?
MOSKOWITZ: It is probably going to be the most interesting year since I got up to Tallahassee in 2012. Not only do you have the issues of the last several months, but you have a governor potentially running for higher office. You have a speaker of the House potentially running for higher office. You have members in the House running for higher office. So that will factor into priorities.
Does it give the House and the Appropriations Committee specifically even more leverage and influence in the budgetary process?
TRUJILLO: It does. We have a discipline within our membership. We communicate well with each other. We have the ability to deliver. The Senate, unfortunately, doesn't have that same discipline. Losing two members doesn't help the lack of trust among the membership.
November was a pretty good month for the state of Florida. The state brought in $122 million more in taxes and fees than it anticipated. But September and October were weaker than expected months. Of course, those were months -- especially September -- much of the state was dealing with Hurricane Irma, which also likely hurt tourism, a huge contributor to state revenue through sales taxes.
In mid-September, less than a week after Irma made landfall in the Lower Keys, Florida’s chief state economist, Amy Baker, warned lawmakers that the state’s finances were already tight. "Even before we start talking about Irma, you were looking at a need to begin addressing the structural imbalance that we were seeing as quickly as you can."
WLRN: What is the financial situation for lawmakers as they decide the 2018-2019 state budget?
TRUJILLO: I would anticipate in the $700 to $800 million even approaching $1 billion [deficit], but there's still a lot of unknowns. The hurricane cleanup -- we still don't have a final number. The sales tax estimations -- if they're off 3 percent or 4 percent or 5 percent -- it's hundreds of millions of dollars. In week three or four of session we'll have a much better idea. But right now we're dealing with at least a several hundred million to a billion dollar deficit.
MOSKOWITZ: I see it really no different than just two or three years ago when we did not have $1 billion of new money coming into the system every year. I think for the last two years we were very fortunate to see huge amounts of revenue coming in that we could re-invest into into the state. It's not about how much money you spend. I think we get lost in that. It's what you spend it on. This is really just a priority conversation. Speaker of the House Richard Corcoran has talked about, because of the cost with Hurricane Irma, we're going to see maybe less member projects and more investment [including] some potential [hurricane] mitigation. We've been fortunate in Florida for the last decade not to have a hurricane of this magnitude. That luck ran out. I think putting some more money in reserves might even be something to discuss.
Does this hurricane change the finances of what the Appropriations Committee in the House is willing to spend the money on?
TRUJILLO: Yes, I think it changes the finances and priorities. We have $3.5 billion in reserves. I agree that we should try to add an additional $1 billion. Get that number up to $4 billion. Pay our expenses and start building that up as high as we possibly can. If we're taking money from reserves, what are we spending that money on? Is it really to pay for hurricane cleanup? Or is it to pay for a bunch of member pet projects that at the end of the day really don't affect Floridians' lives.
How do you begin to address what state economist Amy Baker calls the structural imbalance in the state budget?
TRUJILLO: You have to curtail member appetite.
Is that the only place where you see the ability to shave dollars out of the budget?
TRUJILLO: There is recurring and non-recurring revenue. Some of it we can't touch, but the money we can touch -- the recurring member projects and non-recurring member projects for the last two years -- it's the first time that members had to own their projects. They actually had to put their name next to the project before they filed them [bills]. We didn't allow any recurring project because it's not fair, for instance, that my priority, even though I'm leaving the Florida House, has to be the next legislative priority. And in perpetuity. Those are some small changes we've made. But we have to hold our membership accountable.
MOSKOWITZ: I agree that its member projects, but I think what he's also talking about is member appetite. I do agree that no member projects is something that came down last year because of the accountability in the House. The Senate did not pick up the same accountability. But I'll say the same thing I said previously -- I don't think all member projects are created equal.A fountain might not be the same as an African-American museum. Funding for the homeless might not be the same as a building that is not necessary.
Is there a growing revenue challenge as well after the state has cut taxes for several years?
TRUJILLO: There's nobody in Tallahassee [who] will say the biggest issue we face here is that we have a lack of revenues. We're the third most populated state. We have tourism at an all-time high. We depend strictly on sales tax. The economy is absolutely roaring. Property values are through the roof. Everything is doing exceptionally well from every economic indicator. The biggest problem that we have is that we eat more than we exercise.
MOSKOWITZ: You wouldn't run your personal finances the way that the state spends money. You don't spend all the money that comes in. You put some away for a rainy day. Folks around the kitchen table are making those decisions every day. When politicians go to Tallahassee or any other state capital or Washington D.C. they're spending other people's money, which is much easier. I disagree with [Chairman Trujillo] on tax cuts in this respect: I think because Florida is so dependent on property values that when we start chipping away at other areas of revenue we're not anticipating for what we do if there's another property downturn. We saw what happened when the property values tanked. What did the legislature have to do? They raised fees in order to make up that difference. The state of Florida has a very unique opportunity over the next couple of years with the new federal tax cuts. You're going to see other states like New York, New Jersey and Connecticut starting to bleed people and businesses to the state of Florida. We have to be ready to create an environment for those people to come. I don't think tax cuts on the communications cell phone bill is what would have done that. I think there are other areas that we could be doing tax cuts.