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The State of Sunshine has Moved!!

The State of Sunshine has moved to its new server. Click the new header, and don't forget to change your bookmarks!!

The State of Sunshine is Moving.

The State of Sunshine will very soon be moving to it's own server... bye bye Blogspot... using WordPress. If you have bookmarks or links to the blogspot location, please change the address to: www.StateOfSunshine.com. For now, that domain forwards here - but it will be on its owner server within the next week. I won't be deleting this account -- so any links to old posts should still work -- but I will be importing all of the posts and comments to the new server. Thank you for reading.

Insurance Followup - Looking Closer at the Models

In yesterday's post, I talked about efforts by insurance companies to justify their rate increases by changing at least one computer model used to project losses: The primary computer model used to justify rate increases is flawed based on faulty science. The model, used by more than 400 insurance companies, was previously based on 100 years worth of storm data. It was changed to use just five years of storm data. This change caused the projected losses to increase by 40% over the old model. Apparently, the change was requested at the behest of the insurance industry. (Tampa Tribune Article) Today, the Tampa Tribune has done a follow-up story on the issue, noting the House Speaker Marco Rubio (R-Miami) has asked all of the companies that provide hurricane-loss models to submit not only their models, but also the assumptions used to create the model:

The speaker of Florida's House is demanding that companies across the country hand over computer models used to justify huge homeowners insurance rate increases in many coastal areas. That could lead to a precedent-setting battle over information the industry has long considered confidential. "We're going to ask them to produce that model, and I hope they'll comply, and if they don't, we reserve the right to avail ourselves of our subpoena power," Speaker Marco Rubio said Tuesday. "I'm not sure how they'll react to that, but we think it's important." Rubio's letter demanded not only the software for the models but also "the assumptions and factors used in developing the models, including any proprietary information."

It will be interesting to see how this plays out over the next week.

Raiding Hillsborough's Tax Revenue

A major change is brewing in Tallahassee, and too many local leaders are quiet about it. Over the past year, local media outlets have been following the happenings within the Hillsborough County Expressway Authority. From improprieties in the process used to hire a lobbyist, to changes to the Authority's attorney, to having a (now former) Executive Director who ran gay porn sites on the side - the stories have become almost comical. The Governor called for an external audit. Legislators are calling for changes. What will happen will have a tremendous impact on Hillsborough County residents - from South Tampa to Brandon to New Tampa. State Senator Mike Fasano (R-New Port Richey) has filed a bill that will abolish the authority. It does so by creating a seven-county authority to manage transportation projects around the Tampa Bay area. The idea is being pushed by the Tampa Bay Partnership (which honored Fasano last year with it's Chairman's Cup for Excellence in Regionalism):

The Hillsborough County Expressway Authority is merged into the Tampa Bay Regional Transportation Authority, and the Tampa Bay Regional Transportation Authority shall assume all powers, duties, functions, assets, and liabilities of the Hillsborough County Expressway Authority. [SB 506]

In general, I think a regional approach is helpful because traffic and transit issues do not stop at the city limits or county line. However, there is a problem with the current proposal. There are several toll roads in the Tampa Bay Area: the Lee Roy Selmon Expressway, the Veteran's Expressway, the Suncoast Parkway, the Pinellas Bay Way, and the Polk County Parkway. Of these, I believe all of them except the Selmon are managed by the Florida Turnpike Authority. And the Hillsborough County Expressway Authority is helping fund the construction of the new East-West Toll Road in New Tampa, to provide an easier way for New Tampa residents to reach Interstate 275 (thus alleviating some of the traffic issues on Bruce B. Down's Boulevard). Abolishing the Authority will probably put the East-West road on hold, but it will also mean that the toll revenue paid by Hillsborough residents will help fund the construction of roads in other counties. This is because the only toll revenue that will be collected by this new Authority will be from the Selmon. Thankfully, there will be another bill by State Senator Victor Crist (R-Tampa) to preserve the Authority, while making significant changes to the board. Currently, the board has seven members - a Councilmember from the City of Tampa, a Hillsborough County Commissoner, and five people appointed by the Governor. Crist wants to change the makeup so that a majority of the board are appointed by locally elected officials. This will solve the internal problems of the Authority while keeping Hillsborough drivers' toll money inside Hillsborough County. If Senator Fasano, whose district does not include anyone in Hillsborough County, wants to create a regional Authority, he should leave the local Authority in place. That is something The State of Sunshine could support. Otherwise, it's a terrible idea. Crist is right, change the board - don't abolish it. We will be closely following this issue as it moves through the legislative session. [Disclosure: I have previously worked for Senator Victor Crist.]

The Insurance Fight - Special Session Preview

First, I must tell you that I am no expert in home owners insurance. I am merely a spectator of what will be a knock-down drag-out fight next week. On one side, big insurance and big business. On the other, homeowners. The arena will be the House and Senate Chambers in Tallahassee. The particpants, legislators themselves, will be duking it out - both claiming to be working to improve the insurance climate here in Florida. Let's see how the posturing has started. Associated Industries of Florida has formed a coalition to fight attacks on insurance companies. They claim that further regulation or mandated rate roll-backs will force companies out of the Florida market. They prefer providing grants to homeowners to "harden" their homes, allowing insurance companies to grade homes based on their ability to withstand windstorms, and allow insurance companies to provide policies with higher deductibles. (Orlando Sentinel Article) The primary computer model used to justify rate increases is flawed based on faulty science. The model, used by more than 400 insurance companies, was previously based on 100 years worth of storm data. It was changed to use just five years of storm data. This change caused the projected losses to increase by 40% over the old model. Apparently, the change was requested at the behest of the insurance industry. (Tampa Tribune Article) Governor Crist has proposed, and used this issue during his campaign, forcing insurance companies to make a choice: write homeowners policies or none at all. For example, if Widget insurance writes homeowners policies in other states, but only writes auto insurance in Florida, it would have to start writing homeowner insurance or give up the lucrative and highly profitable auto insurance. (Daytona Beach News Journal Article) The Florida Senate has introduced its bill. The Palm Beach Post Blog (Q: The Florida Politics Blog) has a good summary of the bill. The bill is in draft form, I will link once it is available online. It's key points (taken from a number of media reports): • If insurance companies can prove they will reduce rates, they can get better access to reinsurance - first by reducing the threshhold from $6 billion to $3 billion, and by increasing the total amount they can purchase from $16 billion to $19 billion (for 2007 and 2008). • Change Citizens by rolling back the 56% increase from this month and the projected 29% increase in March. It also spreads the assessment that covers Citizens' losses to include medical malpractice and automobile insurance policies instead of just property insurance policies. Citizens might also be able to cover losses other than windstorm, to help spread risk by covering fire, or non-homestead properties in high-risk areas. • Homeowners would have three additional options: first, higher deductibles; second, waiving coverage of their contents; third, waiving coverage entirely - as long as all policyholders (including mortgage company and lender) approve. Homeowners might also get credit for taking steps to fortify their homes, after a commission studies the issue. • Bring the Panhandle counties under the statewide building code - stronger buildings reduces losses in a hurricane-prone part of the state. • The bill does not mandate rate reductions, leaving it to insurance companies to determine how to set the rates. I like the idea of giving homeowners more options, in part because you could see "supplemental" insurance policies appear. Imagine a policy like AFLAC offers, that could cover only the deductible portion or the contents -- I could even see two policies costing less than one does now. Perhaps the South Florida Sun Sentinel editorial says it best: "Thus begins what many expect will be a bruising special session."

Florida Legislature: Interesting Bills

The MSM will follow a lot of the major issues throughout session, and those bills won't appear much before session -- if not during. Yet a lot of the other bills can be interesting. The State of Sunshine will be exploring some of these, tracking them as they move through the process. Here is the first list. HJR 23 -- Rep. Carl Domino (R-Juno Beach) This might be called the "Save Our New Homes" Amendment. It proposes an amendment to the Florida Constitution that would permit a reduced valuation on homestead assessments. Basically, if you sell your home and buy a new one within a year, the legislature can specify how the property appraiser will assess your new home (with some limitations). HB 33 - Rep Stan Jordan (R-Jacksonville) / This is a response to a nasty Republican primary for Senate District 8. Incumbent Senator Jim King won a tough fight from conservative activist Randall Terry. In that race, the voters were inundated with automated, recorded telephone calls -- so called "robo calls." This bill, and it's companion bill (SB 322 by Sen. Jim King R-Jacksonville) would prohibit these kind of calls to homes on the state or federal "Do Not Call Lists" HJR 75 - Rep. Bob Allen (R-Merritt Island) This bill changes the "Save Our Homes" Amendment into the "Save Our Property" Amendment. This bill, and it's companion bill (SJR 378 by Sen. Mike Fasano R-New Port Richey) It would apply the same limitation on increases that exist on homestead property to all real property. HB 163 - Rep. Tom Anderson (R-Dunedin) This is another property tax bill, that would alter the valuation of property. Currently, property appraisers are required to factor in the "highest and best use" of a property when arriving at a just valuation for the property. This means that even if you never intend to change the use of the property, if it 'could' be used for other, more valuable purposes, that use must be factored into the value of your property. It generally applies to newly purchased property. This bill would repeal that language, leaving in place the "present use" of the property as a factor in determining valuation. SB 92 - Sen. Carey Baker (R-Lake Mary) This bill would reinstate the sales tax holiday for hurricane preparedness supplies, making it an annual 12-day 'holiday' starting on the next-to-last Sunday in May. SB 132 - Sen. Stephen Wise (R-Jacksonville) Would raise the age to purchase tobacco products from 18 to 21. SB 134 - Sen. Larcenia Bullard (D-Miami) & SB 216 - Sen. Steven Geller (D-Hallandale Beach ) Would allow card rooms at pari-mutuel facilities to conduct dominoe games. Imagine, gambling on dominoes! SB 146 - Sen. Paula Dockery (R-Lakeland) This is Governor Charlie Crist's "Anti-Murder Bill" -- it would prohibit granting bail or pre-trial release to certain criminals arrested for violation of probation or parole. SB 220 - Sen. Evelyn Lynn (R-Ormond Beach) This would require local governments to reduce their millage below a specified amount in order to receive the local option sales tax revenues. Hillsborough County, for example, has two half-cent local option sales taxes: the Community Investment Tax, and the indigent care tax. SB 312 - Sen. Mike Fasano (R-New Port Richey) This bill would require gas stations to make some disclosures affecting debit cards. Gas stations are permitted to place a hold on your funds when they authorize a debit card. This has become a major problem with the higher cost of gasoline. Often times, stations will hold $75.00 or more from your checking account when you use your debit card -- they will claim that this will ensure you have enough funds to fulfill your use. However, when you complete the transaction, the hold may remain for several business days. The State of Sunshine urges everyone to contact Senator Mike Fasano and thank him for filing this legislation. SB 380 - Sen. Mike Bennett (R- Sarasota) This is one of the first attempts to shift regulation of cable television services from local governments to the state goverment. It is primarily the objective of the telephone industry, who do not want to provide some of the public access, education and government stations local goverments often require. The bill prohibits local governments from requiring cable providers, including both cable and telephone companies, to provide these services in exchange for the right to use public rights of way. SB 494 - Sen. Mike Bennett (R- Sarasota) This bill has already seen some publicity - it is the "None of the Above" Bill. Actually, it would require all ballots to include an option for voters to indicate that they chose not to vote for any candidate in a given election. So, these are the first bills we think are interesting. There will be more, and some of these will have no chance of passing. The State of Sunshine will monitor these and more as the session moves forward.

Florida Leiglsature - Week in Preview

This week, the Florida Legislature will be holding "interim" committee meetings. As these are the first meetings since the 2006 election, those House and Senate committees that are meeting are only having informal discussions. This is typical for the first week. Committees will introduce their staff members, perhaps hear staff presentations on studies ("interim projects") conducted since the last legislative sessions. Many committees invite the departments within their purview to give overview presentations. In all, these are rather boring weeks. The State of Sunshine will attempt to provide a Sunday breakdown with some keen insight about the week ahead from now through the end of the legislative session. (As we approach the end of the session, however, it gets to be more difficult to give such notice.) We will also provide a brief week in review synopsis at the end of the week. So, for this week, there isn't much to report. Next week, we will try to breakdown the property insurance special session.

New Year, New Governor...

Sorry that I have not posted in a while. I started a new gig and had a personal vacation and I am looking to move the blog from Blogger to its own server ... I might even add a podcast... Regardless we will return to posting with greater frequency here. So, just as Florida's newest Governor takes office and starts his new gig -- I will be doing more here.