The Florida League of Cities will support legislation that strengthens the prohibition on existing and new unfunded mandates, requires enhanced staff analyses of quantification of the costs to cities and ensures full state funding sources be assigned whenever unfunded mandates are identified.
In 1990, a citizen-backed initiative amended Florida’s Constitution to add provisions governing the passage of laws that affect revenues and expenditures of local governments. Article VII, Section 18 of the Florida Constitution prohibits laws requiring, a “county or municipality to spend funds or to take an action requiring the expenditure of funds….” 2010 marks the 20th anniversary of the passing of a constitutional mandate against unfunded mandates.
Unfunded mandates allow one governmental entity to freely and unjustly spend tax revenue raised by another governmental entity without consequence or assessment of costs versus benefits. If government determines that a certain priority should be accomplished, it should be willing to fund that priority rather than hand down the responsibility without the means to accomplish it. Failure to fund a mandate undermines any good policy that may be behind it. In order for Florida’s taxpayers to hold the appropriate government truly accountable for the taxes it imposes upon it, unfunded mandates must be eliminated.
Each year, the legislature passes down additional laws effecting revenue and expenditures of municipal governments, requiring local governments to spend millions of local tax revenue dollars. However, there are several mandates that have traditionally had a significant effect on municipal governments throughout the state.
- Extra Pension Benefits Required for Police and Firefighters: In 1999, the legislature mandated that cities use any increases in insurance premium tax revenues to provide additional “extra benefits” in police officer and firefighter pension plans. These extra benefits are in addition to benefits already provided. In aggregate numbers, it is estimated that municipalities have had to provide over $400 million in “extra pension benefits” to firefighters and police officers since March 12, 1999.
Heart and Lung Disability Presumption for Police and Firefighters: This mandate establishes a disability presumption for firefighters and police officers who suffer any health condition caused by hypertension or heart disease. The presumption is that the condition occurred because of the job and the legal presumption is nearly impossible to overcome. This mandate has dramatically impacted funding requirements of many cities’ self insurance funds. For example, actuaries are making cities establish large loss reserves on claims for blood pressure medication because the presumption creates an unknown future exposure for cities.
- Subsidized Health and Other Insurance Coverage’s to Retirees: Section 112.0801, F.S., requires cities and other governments to offer subsidized health, hospitalization and other insurance coverage to retirees. This is a significant mandate, as it requires governments to offer their retirees health and hospitalization insurance at artificially low rates to the retiree, thereby making the employer pay the difference.
- Growth Management Reporting Requirements: Under Chapter 163, Part II, F.S., cities are mandated by the state to prepare comprehensive plans, amend comprehensive plans, submit plans for state review, modify plans to address state concerns, hire experts to periodically evaluate plans, fund the plans and associated infrastructure while at the same time cutting obvious sources of revenue to pay for them, and legally defend the plans from any number of persons or entities unhappy with the legislative policy choices set forth in the plans. In some cases, the evaluation and appraisal requirement alone can cost up to half of some smaller cities’ annual budgets.
- Providing Effective Notice to Citizens: Various Florida statutes require cities to purchase ad space in newspapers as the only method of meeting public notice requirements, even when equally effective and lower cost alternatives are available.
- Consultants Competitive Negotiations Act: Section 287.055, F.S., requires a city to proceed through an extensive selection and negotiation process when it retains architects, engineers, landscape architects, or surveyors and mappers. Bids are based on qualification with no consideration of cost.
The current constitutional provision regarding unfunded mandates contains numerous exclusions, including all criminal and election laws, general and special appropriations acts, laws deemed to have an “insignificant fiscal impact,” and others. The provision also allows the legislature, by two-thirds vote of each house, to enact unfunded mandates into law without any prior public notice or in-depth fiscal analysis.
The legislature should support revisions to the current unfunded mandates provision of the Florida Constitution that would eliminate unnecessary exemptions. The revision should also ensure that any proposed law which contains an unfunded mandate contain only a single subject matter and be enacted by three-fourths vote of each house of the Legislature, only after a duly noticed public hearing at which a current fiscal analysis is available. It is critical that legislators avoid passing any further unfunded mandates, particularly in light of recent budget cuts and further fiscal uncertainties faced by Florida’s cities.
Last year, the Florida Legislature showed greater awareness of this inequity by halting several pieces of legislation that would have resulted in additional unfunded mandates. However, the legislature recently discontinued funding for the Legislative Council on Intergovernmental Relations (LCIR). This body was previously responsible for studying and quantifying the impact of unfunded mandates on local government. Many of the duties of the LCIR have been handed down to the Office of Economic and Demographic Research, but as of yet there are no known plans for the legislature to continue to examine unfunded mandates and their effects on municipal government.