Charlie In Charge

Aug 19, 2007

The Tampa Tribune

Published: Aug 19, 2007

Gov. Charlie Crist sees only a bright future ahead for Florida. He’s devoted most of his first seven months leading the state in trying to solve the two issues most on the mind of active voters: the ever-rising cost of property insurance and property taxes.

During visits to editorial boards throughout Florida in the last month or so, the new governor tried to spread his optimism, vowing to turn the tables on the insurance industry he distrusts and to force fiscal discipline on local governments that have benefited from increasing property tax revenues.

He’s got his favorite anecdotes – he repeatedly brought up the lady in St. Petersburg who asked him what to do about her homeowners’ rates, and he told her to fire the company – and even though some of his comments are simplistic, they are to the point. Crist conveys genuine concern for Floridians who are hurting.

Critics say he’s all about slogans, cares little about governing and aspires to national office, but Crist showed a command of key issues such as education and transportation. Below is an edited version of a 90-minute conversation with the Tribune’s editorial board.

What are the biggest things taking up your time these days?

Oh, gosh, it’s fairly obvious, I suspect. Property taxes, property insurance. &hellip What’s amazing about this job is it’s a flurry of activity continuously. There’s never a shortage of things to cover or participate in. Obviously, the budget is something we’re focused on coming up on the special session.

As you may have noticed lately, I’m very frustrated with the insurance industry in our state and how they’re treating citizens and how they are reading the new good law that the Legislature adopted back in January. My greatest concern at present is with 36 or so companies that have put in for higher rates, some of them rather significantly higher rates.

They have two responsibilities that I respect. I understand that as a private corporate entity they have a responsibility to their shareholders, but they also need to be reminded they have a responsibility to their customers, and but for customers, they can’t help shareholders. I’m concerned about the adherence to the new law which actually says that the savings that would be granted by the state taking on more risk and providing cheaper reinsurance to insurance companies, those savings should be passed on to the consumer. Instead of doing that, what a lot of the companies are now doing is they’re using that savings to buy more reinsurance.

It’s prudent to have backup insurance for insurance. That’s what reinsurance is. Well, we provided that cheaper opportunity for the private insurance market because they represented back in January, during the special session, that if we would do that, they would offer lower rates. Significantly lower rates. We believed them. We trusted them. Maybe shame on us, but we trusted them. And what we’re seeing now is a breach of that trust.

This industry last year alone had a $63 billion profit. Estimates are that about $3 billion of that profit came from our fellow Floridians when we didn’t really have a storm. It’s very frustrating.

Are you concerned that these companies will pull out like they’ve threatened to do? Less than I would have been before the special session, and it’s because of what the Legislature did, and during the regular session they added &hellip the ability and the opportunity for Citizens Property Insurance to be a viable company.

Before, Citizens Property was a dog. It was the dumping ground for insurance policies in the state. They could only charge the highest rates in the state; they had the riskiest properties. They were set up by the insurance industry to be a place where they could offload all the bad policyholders. It was great for the industry.

I just read an article about a couple of airlines that are now going to have to pay $600 million to the federal government for colluding to price-fix. We’ve seen a lot of these insurance companies put in for rate increases that are very similar.

Given your talents, is there a way to bring insurance companies together to help work toward a goal?

I am willing and had a conversation about that point. Is it worthwhile having a conversation with them and saying look, it’s obviously getting closer to full scale here, is there anything that we can do as a last-ditch attempt to encourage and pull on the string of your good corporate ethic to be good Floridians for your fellow people? Can’t hurt.

Have you changed your position on PIP?

What I’d love to see would be to have PIP continue so long as in the language of whatever statute would be presented would address fraud issues and give the state a greater authority to fight fraud in the delivery of PIP.

Some people are predicting a Florida recession with the housing slowdown. Is that what you see coming?

No. What I see is that we have a couple of issues that we need to deal with in order to re-fire the real estate market. That’s why I think the property tax and insurance issues get the lion’s share of my attention. I want to make sure our economy continues to grow, as it has been, that our unemployment stays low, as it is. I don’t predict gloom and doom.

Florida will be fine, and we’ll get through this.

In our market, government employees get some of the best benefits, unlike those we see in the private sector. I know it’s politically risky, but is there any way that government can move away from pensions and toward 401(k)s like the private sector?

If you’re specifically referring to police and firefighter pensions, probably not. I’m all for being innovative and creative and efficient, but I have this fundamental respect for those who put their lives at risk, and I think they’ve earned it. Those pensions are handsome, and they’re not cheap, but I think they’re earned.

How about other government employees? Is anyone examining how to reduce the costs and future costs of our pension obligations?

The private sector can offer some great opportunities, and I’d be more than willing to look at that and explore it.

Property taxes: You said (tax rollbacks) wouldn’t have much impact on local governments.

Oh, I think they’ll have an impact. I don’t think they’ll have much impact on the delivery of services that citizens want if local governments act responsibly.

Are you finding they’re acting responsibly?

By and large I am. I’ll share with you a meeting I had with some mayors during the regular session who came to our office and wanted to talk about the property tax issue and how it was going to impact them, and they started to say if we have these reductions we’re going to have to lay off policemen and firefighters.

I looked at one of them and said, "Are you really going to do that? You’re going to fire cops if you have fewer resources?" He said, "No governor; we’re really not." I said, "How about the rest of you?" "No."

I told them they should stop saying that because you scare families, and you unnecessarily and unfairly frighten the communities that you’re supposed to serve.

Now I hear about a reduction in positions just like you do, but they’re empty positions. Why wouldn’t they be doing that anyhow without the encouragement of fiscal discipline by the state?

Sen. [Jeff] Atwater calls it an intervention, and in some ways I suppose it is. A point I like to make is four or five years ago, before the dramatic increase in local revenues, we had police forces; we had firefighters. How’d we do that before we had all this extra money? We did it because they were fiscally responsible. I think that’s all the public is crying out for.

There’s going to be a huge challenge if the superexemption passes in January. One of the biggest arguments against it is funding for education. There’s been this "trust us" thing in the sessions, that we’ll find the money. We’re going to have to find a lot more in January if it passes, so make the case why this exemption ought to pass.

I’ll address the education issue first. I don’t think you’ll see a reduction in monies that go to education because of a reduction in property taxes. I think the Legislature means what it says. I know the speaker is genuine about supporting education. I know the Senate president is genuine about doing the same thing.

You’ve seen it of late too where there’s continually decreasing enrollments at our schools around the state. So I don’t know that the challenge is going to be as challenging as we perceived even six months ago. How do you do it if you have less revenue? You do it at home. You know the things that are a priority for you and your families. The state should be just as smart. We know what the priorities are to the people we serve – public safety and security, education always have been – so you make sure those things are funded first.

There may be other revenues available to us that we haven’t addressed yet. Our office is negotiation with some Tribes in the state that I think will help us during this time &hellip . The result could be very healthy economically.

Do you foresee roulette and some of the major table games in addition to the slot machines coming in?

I don’t think roulette, no. I don’t want to get into the details of the negotiations because they’re not concluded yet, but I’m encouraged by how it’s going so far. To me it’s a no-brainer because that’s going to happen anyhow regardless of what Florida does because the [U.S.] Department of the Interior will do it, so it’s either negotiate and help your taxpayers or don’t negotiate. This way we have some control and get revenue. Another thing that’s fortuitous for Florida right now is we have the Budget and Tax Commission that’s meeting at a time when we could use additional help depending on what happens here on the property tax amendment. That gives us another backup to look at other ways to help Florida’s economy.

Can you help us understand how to build a university system that not only gives opportunity to regular folks but also helps Florida reach the goal of biotech and high science?

California has a system that we might want to look to emulate, which is three-tiered. A lot of our community colleges are going to four-year degrees and will continue to provide the access opportunity that I care an awful lot about. I’m also sympathetic to having our universities achieve greatness and excellence, like USF, UF, Florida State, perhaps Central Florida, and I know that’s expensive to do. And maybe the middle tier is the rest of the universities that are traditional four-year institutions. I think that would benefit Florida economically.

The community college system has changed tremendously in the last 25 years, sort of under the radar. Their focus now is workforce training and they seem to do a great job at that. They’re not doing a great job at producing AA-degree students to go on to the universities.

I don’t think it’s just the community colleges. It’s also the traditional four-year institutions. Most students don’t get a degree in four years. I think another thing that needs to be part of the evolution of higher education is accountability. How come they’re not getting degrees to kids in four years? What’s going on? Why’s it taking five and six years now?

Tampa Bay has really gotten engaged on the issue of transportation, and our county commission is going to put $500 million toward helping get some of the projects off the backlog. You vetoed money for our regional transportation authority. Do you have an aspiration for how Tampa Bay ought to approach its transportation challenges?

What I vetoed was $1 million to set up the bureaucracy of that. I would rather see them act. I’ve only got four years that I know of, and I want to see light rail, and that’s happening, or so it appears, with local governments. I think we need to look at bridges, probably another one over the Bay.

What is your direction to the DOT?

I want them to build roads where people are. We’ve got a lot of people, and where they are is where we need to build roads. Others I interviewed for the secretary wanted this or that road in the middle of nothing, and that’s visionary but there are people here, and they’re stuck.

Are you going to stand behind (transportation secretary) Tom Pelham when he tries to stop some of this stuff?

A: I appointed him.




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