Thursday, January 18, 2018
Editorials

Editorial: Here's what really hurts Floridians

Gov. Rick Scott is right to object to the rising cost of living in Florida. But he's on the wrong path in proposing $500 million in tax cuts in a state that already has relatively low taxes. Where Florida families are getting pummeled is on the rising cost of regulated services: property insurance, electric rates and health care. Those are hidden taxes that dramatically affect the cost of living, yet the governor and the Legislature have embraced policies that are increasing those costs. Scott's efforts would be better directed to these areas:

Electric bills: Pocketbook issues don't get more basic than keeping the lights on, yet the governor has never shown interest in ensuring the consumer perspective is present at the Public Service Commission — even as Duke Energy collected months and months of advance payments from customers for a proposed nuclear plant that will never be built.

Now electric utilities want rate increases all across the state. Duke Energy is seeking a $8.24 a month increase to $124.30 for 1,000 kilowatts a month. Tampa Electric won a $5.67 base rate increase last week. Combined with its upcoming fuel cost increase request of $1.27, its customers can expect to soon be paying $109.52 a month for 1,000 kilowatts.

Terms for two of the PSC members, Ronald Brise and Art Graham, end in January. The nominating commission has sent both of their names back to Scott for reappointment. The governor should find replacements who are more interested in regulating in the public interest than in rubber-stamping what the industry wants.

It also would help if Scott would ask the Legislature to repeal the 2006 law that let utilities charge ratepayers in advance for nuclear projects that will never produce any electricity.

Property insurance: Scott continues to demand that policyholders of the state-run Citizens Property Insurance Corp. be steered into smaller, untested private insurers. The latest scheme, unfolding now, puts the burden on 400,000 Citizens customers to refuse a private insurer's takeout offer. Those offers may have initial premiums that match the Citizens rate, but there's no guarantee they won't dramatically escalate down the road. And new Citizens rules will make it harder for those homeowners to come back into the fold.

By capping increases at 10 percent a year, Citizens rates have increased 43 percent since 2009 and the insurer has more than $6 billion in reserves. It can cover losses from a 1-in-58-year hurricane without any assessments, and it can cover losses from a 1-in-72-year hurricane with assessments only on Citizens policyholders. Just last week, the Office of Insurance Regulation announced an average 6.3 percent increase for Citizens customers.

Scott warns of the risk of large assessments beyond Citizens customers if a large hurricane exhausts the insurer's reserves. But he continues to ignore the impact of his policies on Florida's fragile real estate recovery and on family finances as premiums rise beyond what homeowners can reasonably pay.

Flood insurance: Scott is also ignoring another property insurance threat in densely populated coastal counties. The federal Biggert-Waters Flood Insurance Reform Act of 2012 combined with new federal flood zone maps means more homeowners will be required by their mortgage holders to buy flood insurance policies at the moment Congress has dramatically increased the price — starting at 20 percent next year.

In Louisiana, the congressional delegation — Republican and Democrat — is for a fix, but Florida's has been largely silent. So has the governor. Florida's growth economy is dependent upon home buyers and real estate investors having access to affordable property insurance. The flood insurance program should be reformed, but not in a manner that is creating its own devastating storm. Scott should be helping Washington find a reasonable fix to a federal law that will leave Floridians unable to stay in their homes because of the cost of flood insurance — and unable to sell because the cost of the insurance is so out of proportion to the value of the house.

Health care coverage: The real impact of the refusal by the governor and the Legislature to help implement the Affordable Care Act is higher health care costs for Floridians who already have coverage. The state's foolish refusal of $51 billion in federal funding over 10 years for Medicaid expansion and to help paying Floridians access the federal marketplace means the state's rate of uninsured — already second highest in the nation at 24.8 percent — will continue to be high. That also means Floridians covered by private insurance will inevitably pay more for care than they should, as hospitals and health care providers increase rates to cover uncompensated care to the poor and others who can't afford care.

Scott wants to cut Florida's already low tax burden when he should be focusing on the high expenses tied to the state's regulated industries. It's the increasing cost of electricity, property insurance and health care that have most hit Floridians' pocketbooks and that Tallahassee continues to ignore.

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