Whenever a party becomes as dominant as the Republican Party has been in Tallahassee over the past two decades, divisions emerge. But there is one thing that largely unites the Florida GOP: friendliness (critics would say slavish devotion) to business interests.
There were signs of that this week, after state regulators said workers' compensation insurance rates for businesses should jump by 14.5 percent. It didn't take long for some Republicans to start calling for legislation in next year's session that might ease the strain.
But there are also signs of a looming battle over another business-friendly priority of Gov. Rick Scott: incentives for companies to move to Florida. Incoming House Speaker Richard Corcoran, R-Land O' Lakes, has long been critical of those goodies, and his response this week was no different. In as many words, he said "no dice."
All of that will no longer be of much concern to state Rep. Reggie Fullwood, a Jacksonville Democrat who agreed to plead guilty to wire fraud and failure to file an income tax return. The plea means Fullwood is ineligible for the Legislature, and his party will have to find someone else to try to hold onto what should be a safe Democratic seat.
COMP TIME
The double-digit rate increase for workers' compensation insurance called for in an order by the Florida Office of Insurance Regulation was actually down from a proposed 19.6 percent. But business groups said a 14.5 percent boost would hurt employers.
"Today's workers' compensation rate increase is a hard hit to small business owners and our economy," Bill Herrle, executive director of the small-business group NFIB/Florida, said in a prepared statement. "While the (insurance) commissioner has done what was necessary in response to the Supreme Court undoing legislation that capped attorneys' fees and maintained reasonable rates, our small business owners will be paying the price."
Herrle was referring to the Florida Supreme Court's ruling in a case known as Marvin Castellanos v. Next Door Company. In that case, the court ruled that a limit on attorneys' fees was unconstitutional. An attorney in the Supreme Court case was awarded the equivalent of $1.53 an hour in successfully pursuing a claim for benefits for a worker injured in Miami.
Business groups have long argued that limiting attorneys' fees is a critical part of holding down workers' compensation insurance costs. But critics have contended that the state's fee limits favored insurers and took away legal rights of injured workers, at least in part because workers would have a hard time finding legal representation in pursuing claims.
The 14.5 percent increase, slated to start taking effect Dec. 1, remains contingent on the National Council on Compensation Insurance, which makes rate filings for workers' compensation insurers, coming up with a revised rate filing.
It didn't take long for state Chief Financial Officer Jeff Atwater and a key Republican senator to say they expect lawmakers to take action during the 2017 legislative session.
Atwater, who has been heavily involved in insurance issues, warned Thursday that rates will continue to climb and eventually "will impact the recovery" if the Legislature doesn't address the issue during the session.
"It's just the opening act if not addressed," Atwater said.
Also, Senate Majority Leader Bill Galvano, R-Bradenton, said Wednesday he anticipates "comprehensive" legislation about the workers' compensation issue. Galvano was asked during a break-out session at the Florida Chamber Foundation's "Future of Florida Forum" about whether the potential changes would be surgical or comprehensive.
"You can't just go back in and undo what the court did, the court found something specifically unconstitutional," Galvano said after the session.
While the 14.5 percent increase didn't reach the requested 19.6 percent, Galvano said "it's not something we can accept."
But Mark Touby, president of the group Florida Workers' Advocates, issued a statement arguing that insurers are responsible for the rate increase.
"(State Insurance Commissioner David) Altmaier has missed an exceptional opportunity to protect the interests of Florida's business community and the hard-working men and women who drive our economy forward," said Touby, an attorney who represents injured workers. "He could have rejected the insurance industry's secretive ploy for corporate welfare to line its own pockets, all while falsely blaming a workers' compensation rate hike on two court rulings that don't actually make any rate change necessary."
DISSED INCENTIVES
Scott this week renewed his pitch that Florida needs to set aside money for incentives to lure businesses. He called on lawmakers to provide $85 million for incentives in the fiscal year that begins July 1.
During the session that ended in March, the Legislature rejected a larger ask for $250 million, but the governor appears determined to push ahead.
After appearing at the Florida Chamber Foundation forum --- held in Orlando alongside an Enterprise Florida board meeting --- Scott said the incentive money is needed so Florida can compete for jobs against other states.
"We have to get a good return for taxpayers, but we have to be part of the game," Scott said. "If we're not, we're not going to get the corporate office moves, the regional offices, things like that."
But Corcoran, who has been harshly critical of the idea of business incentives, sounded like he was nowhere close to backing down.
"The House's position on this issue has been clear," Corcoran said in a prepared statement Thursday. "The government engaging in social engineering to pick winners and losers that benefit the 1 percent is a bad deal for Florida taxpayers. There will not be any corporate welfare in the House budget."
The proposal got a warmer reception in the Senate, though spending for incentives has generally not been as hard a sell there as it is across the Capitol.
"If we're going to have economic development, and all my polls that I take or see say that economic development jobs is still the number one thing on people's minds, if we're going to have economic development, if we're going to have a jobs effort, we need to fund it," said Sen. Jack Latvala, a Clearwater Republican who is set to become the Senate Appropriations Chairman after the November elections.
During this year's session, the Senate initially supported Scott's $250 million request. But with the House opposed, the funding dissolved as the chambers hammered out a budget.
That resulted in Bill Johnson, who had lobbied lawmakers for the money, stepping down as president of Enterprise Florida and the agency being downsized. A vote on Johnson's replacement was delayed Thursday to give Scott time to meet with both finalists. Scott chairs the Enterprise Florida board.
Scott was unable to meet Wednesday with the finalists --- Michael Finney, a former adviser to Michigan Gov. Rick Snyder, and Richard Biter, a retired Florida Department of Transportation assistant secretary --- because of a schedule change related to receiving updates on Tropical Storm Matthew. Scott also left the Enterprise Florida board meeting Thursday morning for an update on the storm.
"We want to give him an opportunity to spend time with the candidates as well,” said Stan Connally, chairman of the Enterprise Florida President & CEO Search Committee.
FULLWOOD OUT
There will be no delay in choosing a replacement for Fullwood, who was essentially forced out of office after reaching a plea deal with federal prosecutors on the wire-fraud and tax-return charges. The lawmaker announced Friday through Twitter that he had notified Secretary of State Ken Detzner he is "no longer a candidate for FL House District 13."
That came a day after Fullwood's plea agreement. While he pleaded guilty to two of the charges in a federal indictment unsealed in April, the other 12 counts will be dismissed as part of the agreement. Sentencing is scheduled for Jan. 9.
The maximum sentence for each count of wire fraud is 20 years, with one year the maximum term for the tax return charge. Prosecutors will likely recommend a sentence toward the lower end of the guidelines in return for Fullwood pleading guilty. The lawmaker will also forfeit more than $60,000 as part of the agreement, his attorney, Robert Willis, said.
The plea deal came less than a month after Fullwood narrowly beat back a primary challenge from Tracie Davis, who lost to Fullwood by less than 3 percentage points. He was set to take on Republican Mark Griffin in the general election in Duval County's House District 13. Instead, party leaders will select a nominee to face Griffin in November.
According to the indictment, from at least September 2010 to about December 2011, Fullwood electronically transferred money from the "Reggie Fullwood Campaign" bank account to an account of a Fullwood-owned entity called Rhino Harbor, LLC. Prosecutors said he used the money for personal expenses at grocery, jewelry and liquor stores.
To conceal the embezzlement of campaign funds, the indictment alleged that Fullwood submitted fraudulent campaign expenditure reports to the state.
STORY OF THE WEEK: Skirmishes began over business legislation for the 2017 session, with workers' compensation and spending on incentives taking center stage.
QUOTE OF THE WEEK: "I'm spending a fortune right now. I don't know what the number will be until the month's over. I've done a dangerous thing --- I've given a blank check to the radio stations."---Orlando trial lawyer John Morgan, on his spending in support of a constitutional amendment that would broadly legalize medical marijuana in Florida.
