FDOT’s Consolidation Move: Part Deux

February 20, 2012  |  No Comments  |  by Barney Bishop  |  Bishop Blog

The Florida Department of Transportation’s insidious campaign to gut the Tampa and Orlando expressway authority’s independence was consummated by the Florida Senate last week when it voted to rip any pretense for local control away from them.  This was the culmination of a three week fight in the upper chamber that if embraced by the House and signed off by the Governor would mean that once again “central planning” is vogue among transportation bureaucrats in Tallahassee.

I’m shocked because amassing power in one agency whose core mission is clearly state-wide rather than local-centric is the opposite of the GOP mantra of keeping decision-making at the level closest to the people.  Furthermore, it runs counter to the Governor’s stated position that he likes much of what Texas does, and centralized control of toll roads in Texas was condemned to the trash pile of history some time ago.  In fact, Texas is creating more regional toll road authority’s not less!

This saga started last year when newly-appointed FDOT Secretary Ananth Prassad got the Senate to bite on the concept of consolidating in order to save money.  Now who doesn’t want to save money in this tight economy?  You’d have to be an idiot to not support saving money, right? Well, the department promised that if the two roll road agencies were gobbled up by the department that duplicity, savings and efficiency would all of a sudden appear at FDOT and with a snap of your fingers $24 million would be in our collective tax pockets.

Who wouldn’t trust the department to tell the God’s honest truth?  Well, the Reason Foundation for one has to be convinced beyond a doubt and when it recently finished doing a study called “Should Florida Toll Agencies Be Consolidated?” (www.reason.org, January 30, 2012, http://reason.org/news/show/florida-toll-agencies-consolidated ) the answer was no.  In fact, it wasn’t just no, it was hell no.  The authors, including nationally preeminent toll road expert Robert Poole who has worked extensively for both USDOT and FDOT, issued a stinging rebuke of the department’s mathematics.  Their thorough line-by-line analysis of the $24 million says that they can only independently affirm, at best, a little over $3 million of the $24 million.  In other words, 80% per cent of the savings are made up and thus will never be realized. So much for saving taxpayer money.  But, to make matters worse the study found that no other state is centralizing toll roads, and that for many years now innovation has surfaced at the Tampa and Orlando toll road agencies not with FDOT.  Ouch!

At a recent Senate Transportation Committee meeting where Senators Joyner, Norman and Storms defended the independence and local control of toll roads, the department rightfully claimed that the department’s bill was not a consolidation effort, it was about efficiency and that the department supported the Reason Foundation report.  First it seems that the department can’t add; now it can’t read to comprehend.  In any event, the Secretary was technically correct even though every one of the Tampa Senators knew that this was the “camel’s nose under the tent.”

Then without telling anyone, FDOT raised their hammer and drove a spike into the heart of the two toll road agencies by deftly changing all of the language and implementing full throat consolidation in Senate Conforming Bill 7104.  There wasn’t any longer any pretense that they were just going to take over some “back office operations.”  With the speed that any Soviet central planner would have greatly admired, the Secretary dealt his crushing blow to any hint of an indie revolution by the Senate Tampa trio.

Still, House Speaker Dean Cannon, of Orlando by the way, hasn’t yet bit on this tale of strange bed partners between FDOT and a Panhandle Senator who doesn’t even have any  expressways in his district.  If the savings are all smoke and mirrors, innovation has been accomplished at the two toll agencies and not with FDOT, if the Reason Foundation study says that the two should be given more independence not less, it isn’t likely that the Speaker is going to end his political career with letting his own hometown toll agency get run over by the Senate.

To make matter much worse, Tampa attempted last year to pay back FDOT in order to reduce its long term financial obligation to the state which would have resulted in about $160 million more into the state’s transportation budget for FY 2012-13.  That would have put hundreds of Floridians to work building critical infrastructure at a time when jobs are the number one mission for our Governor.  Watch for the details in my next installment of this continuing saga.

The Bishop Blog: Governor Rick Scott is Underrated February 8, 2012

February 9, 2012  |  No Comments  |  by Barney Bishop  |  Bishop Blog, Columns

Governor Rick Scott is much underrated nowadays. We are told that he is unpopular yet, based on the issues that he ran on and delivered in his first year in office, he has done exceedingly well even among Democrats, and the critically important Independents and Ticket-Splitter voters.
Of course this is not conventional wisdom, but according to a poll taken after last year’s legislative session (August 2011) by Associated Industries of Florida, Governor Scott’s agenda is striking a very responsive chord among voters (www.aif.com/press_release/2011/FLAIF_08_11_Scott_Release.pdf). Of his top four issues:  $200 million of Property Tax Reductions, State Workers Pension Contribution Reform, Teacher Tenure Reform and Drug Testing for Welfare Recipients, he has hit a solid Grand Slam.  Among Dem’s, the lowest amount of support was  surprisingly on drug testing in which still more than 6 out of 10 Democrats supported the Governor and the highest support was 74% for Property Tax Reductions.  Independents and Ticket-Splitters (voters who switch party per race) ranged from a low of 73% on Teacher Tenure – unheard of here in Tallahassee, home to the teachers union to an incredibly high of better than 3 out of every four voters (76%) on Teacher Tenure and almost 8 out of every ten voters (78.5%) on Drug Testing!  So, when teachers unions sue, or labor unions go to court they are just reinforcing their unpopular positions of which only a distinct minority of even Democrats support them statewide.  Check out the numbers and the crosstabs as they tell a story of a businessman turned Governor who has the voters of Florida with him on these core issues– wholeheartedly.

This session, the Governor is once again taking on issues that will matter most to the voters such as PIP Auto Insurance Reform and importantly reform of Citizens Insurance Company.  Since he first started running for office about 20 months ago, the Governor in defiance of our last one has consistently been preaching for reform of the Property & Casualty Insurance marketplace – the need to bring back some balance and common sense.  Legislation moving through the House and Senate this year will do just that.

Citizens is the largest p & c insurance company in the state.  It has more liabilities than assets and it buys more reinsurance from Florida’s CAT Fund than anyone else.  The CAT Fund, ably managed by Dr. Jack Nicholson, on the other hand is consistently well-managed, but is weakened by the problems in America’s bond market.  The CAT Fund can barely cover one hurricane per year, yet is legally required to cover two per season!  It is a recipe for disaster and in an admittedly worse-case scenario could even bankrupt the state.  Unfortunately, the solution will require rates to go up for coastal residents but it’s time that their subsidization by in-land residents begins to start declining.  We need to go further, such as limiting how much longer high-income beach residents will get unreasonably low insurance rates without mitigating or hardening their homes.  A time limit will force these homeowners to take action thus limiting the taxes on all of our insurance policies when Citizens cannot fund their entire losses.  For those that cannot afford to harden their home, we need to find a public-private solution.

Education funding is an area where Governor Scott has listened to voters and is moving to increase per-child spending. I’m happy that we as Floridians are willing to pay more; but we should also demand more as well.  We should demand that social promotion be entirely wiped out and we should admit to ourselves that all children aren’t excited for post-secondary – and we couldn’t afford them all anyway. Let’s make sure each child has a “plan” once they graduate and we will quickly learn who wants to stay in school and who wants to go to work.  We should expect our astronomically high reading program investments to pay higher dividends in PreK-12 and accordingly we should see our multi-million dollar remedial education bill at state colleges and universities start to decrease.  If this doesn’t happen, and it hasn’t so far, then we need better solutions so that our children can compete in this extremely competitive world.

So, the next time that someone tells you that Rick Scott is unpopular, just remember that Floridians overwhelmingly like his major policies and that the detractor may just be someone whose ox is finally getting gored.

 

Barney Bishop III is President and CEO of Barney Bishop Consulting, LLC.  He is a life-long Democrat with conservative fiscal views and moderate social positions.  He can be reached at barney@barneybishop.com

 

Florida Legislature passed on a key opportunity in killing casinos

February 9, 2012  |  No Comments  |  by Barney Bishop  |  Columns

Destination resorts, the preferred phrase for those of us who support casinos, is dead for this legislative session after the House voted down the proposal in committee late last week. In my book, that’s a shame, because it could have brought much-needed construction jobs to South Florida, along with a slew of permanent work for people at all skill levels.

I know a lot of people in Florida are vehemently against the expansion of gambling, but as the Ben Stein TV ad says, we already have lots of gambling and gaming in our state, with the Florida Lottery being the big kahuna. The list is long: gambling ships to nowhere, dog tracks, horse tracks, pari-mutuels, Internet cafés, bingo parlors, Indian gaming around the state and so on. So, what is it about destination resorts that get folks’ dander up?

First, opponents argue that Florida is a family destination, and that is certainly true. But I’m not sure everyone thinks South Beach and Miami Beach — with their topless shores, all-night clubs and anything-goes attitude — is really very family-friendly. I suppose it depends on what kind of family you have. Nevertheless, Europeans and Latin Americans come to South Florida because the culture is similar to theirs in many ways, because the language is familiar and because we encourage foreign tourists to visit and spend their money. But when you get right down to it, why must all of Florida be a family-friendly place? Since residents in Broward and Miami- Dade counties have already voted to allow casino gambling, doesn’t their voice count? Exactly when did the “will of the people” in Southeast Florida get cast aside because everyone else in the state knows better? I thought home rule was best because it was “closest to the people.”

And how does Walt Disney World have the right to proclaim that all of Florida will be family-friendly? Who gave it that license? Sure, Disney is a major Fortune 500 company that has transformed Central Florida into a virtual paradise for kids and their families. But does it get the right to rule over the rest of the state? Can’t Disney just be happy with having the central part of the state, or does it have control all of us? I’m a big supporter of business, but this just doesn’t make sense to me. I think Florida is big enough that different parts of the state can appeal to different kinds of tourists without one group ruling the roost exclusively.

Next, the opponents tell us that crime will increase. And I can’t help but agree, but I don’t find that to be enough of a reason to oppose destination resorts. Isn’t that why we have law enforcement to protect us from the bad guys? I don’t want to make light of this because officers put their lives on the line for us every day, and we should do everything we can to provide them with the tools to be effective. And destination resorts will generate a lot of money for the state and local government, and some of those dollars should be used to fight crime.

Then we are told by the opponents that the jobs will be low-wage jobs. Really? When you can’t get a job, how low is too low? For those of us lucky enough to have a job, do we really need to look down our noses and say these jobs aren’t good enough for someone else? From what I can see, every time a company announces new job openings, it doesn’t suffer from a lack of applicants. Furthermore, at a time when we want people to get off welfare and find work, wouldn’t any job do? Since taxpayers are footing the bill for welfare, I vote to let them get any kind of legal job they can, and if I can help them, then it’s certainly in my best interest. I’ll share with you that a beginning job at a low wage doesn’t mean that you will never advance. Do you know that one of the top executives for Wynn Resorts started out as a blackjack dealer?

There is no question we should all want to bring high-tech jobs to our state, but rather than hitting a grand slam, shouldn’t we try to hit a few singles, doubles and triples while we are waiting for the big one to come to Florida? I mean, Gov. Jeb Bush brought Scripps to Florida, which begat Torrey Pines, Burnham Institute and then Max Planck. Do you really believe these scientists don’t ever want to have fun and go to a casino? I do, and I’m not even a gambler. I don’t really care to gamble because I work very hard for my money, and I know the odds are in the house’s favor and that I’m not a particularly lucky person. But I do enjoy the wide range of entertainment, the restaurants and the striking, world-class architecture.

Last year, I went to an Indian casino in Tampa. When I went into the casino, I was surprised to see a lot of folks who look just like me: white hair, over-age and feeling good. Just about every one of them had a drink in his or her hand and some were even smoking. But you know they were all having a good time, laughing and enjoying the company of others. Now, I know there will be a certain percentage of folks who will use their last dollar to try and win it big, but does everyone have to suffer just because some people can’t control themselves? Has the nanny state evolved so much that now I have to be infringed upon because some other person isn’t smart enough to make the right choice? I hope not, as that doesn’t portend well for the years that I have left to live.

We can put our heads in the sand and deny that gambling exists only here or there, but the reality is that we send a lot of Floridians to Indian casinos or to Biloxi, New Orleans, Detroit or Las Vegas — you name it. But in not a single instance are we reaping the financial benefit of the jobs created since a lot of people are going to entertain themselves with games of chance, whether we like it or not. We can make the money and create the jobs here, or we can send our citizens to another place where they will spend their hard-earned dollars. To me, it just makes economic sense to keep them here in Florida, where, if you are interested in family fun, you can go to Central Florida, and if you are interested in adult entertainment, you can go to South Florida. Shouldn’t Florida be a destination for everyone, whatever they want – so long as it is legal?

Barney Bishop column: The Dept. of Transportation power-grabs for state’s expressway authorities

February 6, 2012  |  No Comments  |  by Barney Bishop  |  Columns

Posted at http://www.saintpetersblog.com

The Florida Department of Transportation (FDOT) is on a mission, like never before, to amass power and control over our state’s mass transit system.  Though the department would like for you to believe that it is simply following the model of other states, in fact no other state in America is going down this lonely road.

Ananth Prassad is the Secretary for FDOT and he was one of three finalists presented by the Florida Transportation Commission to Governor Rick Scott.  Ananth is warm, personable and very qualified and has the distinction of working within the department and rising to become Assistant Secretary before joining the private sector and finally returning to become Secretary.

The department’s mission is to oversee Florida’s integrated transportation system and insure that it performs well.  This, of course, is an especially difficult job at a time when the state’s coffers continue to decrease and since neither the legislature nor the Governor are inclined to raise taxes or fees; this puts real pressure on the department.

Enter the three existing expressway authorities around the state: Orlando-Orange County Expressway Authority (OOCEA), Tampa-Hillsborough Expressway Authority (THEA) andMiami-Dade Expressway Authority (MDX).  While MDX is a horse just like the other two, it is a horse of a different color inasmuch as it was created by a Charter Government in Miami-Dade County.  Importantly, MDX owes no money to FDOT because it realized the precarious position that it was in and decided years ago to pay off their debt to the state.  On the other hand both OOCEA and THEA owe money to FDOT because the department advances money to these two expressways (called Lease Purchase Agreements) so that new sections can be built without taking revenue from their existing local toll roads.  The expressway business can be very lucrative because the authorities can take in tolls and use those monies to pay for operations and maintenance and can also pay back the department – if the department is willing to accept the money.  More about that later.

Last session, FDOT rolled out the idea of bringing the Orlando and Tampa expressway authorities within the fold of the department under the guise of saving money.  In fact the department and their supporters said that by consolidating them into FDOT, $24 million would be saved.  That’s not a lot of money in a $70+ billion state budget, but every nickel counts and especially when we are facing another $1.4 billion deficit for the 2012-13 fiscal year.  The Florida Senate tried to make this consolidation happen last year, but House Speaker Dean Cannon would not hear of it, and so it died.

But, this year, FDOT has again attempted to bring the Orlando and Tampa “cash cows” expressways into the warm bosom of their department, and the Senate is again trying to facilitate it.

So, the opponents of this move asked the Reason Foundation to take a look at this important issue and ferret out the truth.  You remember the Reason Foundation; those are the folks that said last year that High Speed Rail (HSR) was a boondoggle and that is should not be attempted in Florida.  The Governor listened and promptly killed it.  Who better to deliver the news of whether there is any truth to these alleged savings than the very folks who waded through the facts of HSR and  deftly put a knife through its heart?  I know that I paid attention because I was an advocate for HSR and when I lost, I wanted to know more about this foundation.  What I learned was that the founder, who interestingly is now the vice president for transportation policy (he didn’t like the admin and wanted to get back to the policy thing!), is considered one of the foremost experts on toll roads in the entire country.  Not only has Robert Poole worked as a consultant on toll roads in the states of California, Washington, and Texas, he also has worked for USDOT and even for about eight years as a consultant to FDOT!

Last Monday, Sen. Jim Norman held a press conference in front of the doors to the Senate chamber and released the study conducted by Robert and a peer researcher in Atlanta.  The conclusion was the title to the study: “Florida Toll Agencies Should Not Be Consolidated” (www.reason.org/news/show/florida-toll-agencies-consolidated).

Remember when I told you that it had been argued that we, the taxpayers, would save $24 million by folding in the agencies within FDOT?  Well, the gentlemen from Reason looked line-by-line at the figures used by the department and at best they said that maybe $3.5 million would be saved, and probably more like $2 million.  That means that about 90% of the purported savings were from fantasy land, and could not be independently justified.  This not only hurts the department’s credibility but also that of the Florida Governmental Efficiency Task Force which likewise, with little independent verification, accepted as fact that $24 million was the right number.

Certainly other arguments have been advanced as well.  Like the state Division of Bond Finance can secure bond dollars at a lower interest rate than the expressway authorities.  That is true if the locals simply auction their bonds, but if they negotiate them, then the locals have actually sometimes beat the state bond folks, so it is not inherently true that the state can do better in all cases.  And, of course, there is always the argument that the state can build roads faster, more efficiently and smarter than the locals, but that got debunked as well.  In fact, most if not all of the innovations that have been occurring in expressways have occurred at the local level:  no more toll plazas, plate-by-picture, reversible lanes, etc.

Finally, the report states the obvious.  That the state department was conceived as a way of interconnecting urban areas around the state and the expressway authorities were designed to put an emphasis on local control of intra-city toll roads.  That Texas, a favorite poster child for Governor Scott is creating more regional toll authorities, not less.  That the local authorities should be given even greater independence and should become self-supporting, not the other way around.

I commented that the local authority, at least the one in Tampa, has attempted to pay back FDOT most of the money that they have borrowed from the state.  FDOT refused the money!  That’s right; the state wouldn’t accept a check.  I don’t know about you, but when I look a gift horse in the mouth, I usually accept it – willingly.

Last week, Tampa Senators Arthenia Joyner, Jim Norman and Rhonda Storms stood up for their hometown expressway and refused to be pushed into accepting the platitudes that were offered by the Secretary that no consolidation was taking place.  None of them believed him and they voted in concert against the departments bill.  They lost in a 5-3 vote of the Senate Transportation Committee.  Obviously, the Senate is going to go down the road again of supporting the department, but I’m betting that Speaker Cannon hasn’t changed his mind one iota.  And since when is it a Republican mantra that locals should send their money to Tallahassee or Washington DC for that matter and that we should expect “savings.”  Quite simply, no one believes that or as we say in North Florida:  that dog don’t hunt. 

Barney Bishop III, who just founded his third company, is an outspoken, lifelong Democrat with a strong fiscally conservative streak. He believes that government  is not the answer to all of our problems, that civil discourse is obligatory, that compromising on details will not undercut one’s core beliefs, and that a resilient, robust private sector is the elixir needed for a true democracy to grow and survive. You can contact him at barney@barneybishop.com.