What business needs from the Florida Legislature Part 1

The Florida legislative session, which starts January 10, is right around the corner. Each year, the business community adopts session priorities, providing a roadmap to educate legislators about the needs of the Florida business community.

In the coming session, regulations on business will take center stage. The Governor has made it a priority to reduce government regulations and rules, while business leaders from groups like BIZPAC walk the hallowed halls of government to protect Florida’s business climate.

This year, the statewide business community has seven primary legislative priorities. I will cover three priorities in this column, and the rest later this week.

Perhaps the top priority is Workers Compensation and Drug Repackaging. Business will be supporting legislation to reduce employer’s workers’ compensation costs in a way that will help Florida restore its dynamic economic position. A bill to be considered will provide $62 million in savings for employers- – this saving could be used to create jobs in Florida.

One of the causes of high workers comp costs is a legal loophole that allows doctors to dispense drugs by repackaging those drugs and selling them for much higher costs. Thus, these doctors are reimbursed amounts that are exorbitantly higher than any pharmacy provider. Business needs the legislature to insist to doctors that their mark-ups should only be 4 percent, because it’s the employer who pays the extra costs. This practice drives up workers comp pharmacy costs for injured workers. All drugs should be subject to identical statutory fee amounts regardless of where the drugs are dispensed.

Another top priority is to close the Online Sales Tax Loophole. Online Travel Companies (OTCs) such as Expedia and Priceline have an unfair advantage over companies located and doing business in Florida. Why? Because OTCs do not collect (and remit to Florida) occupancy taxes on the retail rates paid by consumers for hotel rooms. Instead, the OTCs only remit such taxes based on the wholesale rate they pay hotels for rooms. This is an inequity and a windfall for the OTCs because of the competitive advantage it gives them; OTCs are not remitting as much tax as they should, and “brick-and-mortar” Florida hotels are being hurt. The same holds true for Florida retailers, who are at a disadvantage to out-of-state, online-only retailers when it comes to the fair collection of state sales tax. Florida is missing out on a lot of revenue –about $300 million to $1 billion. And this is not a new tax; instead it is an issue of evenhandedness and fairness because it’s a tax that’s due but not being collected.

The third priority is Automobile Insurance. Legislation is needed to reduce Personal Injury Protection (PIP) insurance. Florida’s no-fault law requires vehicle owners to purchase $10,000 of PIP insurance. This compensates persons injured in accidents, regardless of fault.

PIP was enacted to minimize litigation. But PIP premium costs have become unnecessarily high because of increased litigation and widespread fraud and abuse. Every time the legislature has tried to enact PIP reform to reduce fraud, unscrupulous people have dreamed up new schemes to get around the reforms. And last year, trial lawyers defeated an attempt to reform PIP in a way that Florida residents would pay less in PIP premiums. Trial lawyers and some courts are in love with “contingency fee multipliers,” which allow trial or appellate courts to apply multipliers in awarding attorneys’ fees in certain PIP cases. The legislature needs to get out in front, and stop this problem.

Even worse, PIP fraud is rampant, with staged accidents and payments for medical services that were never rendered. Florida is tops in the nation for staged accident fraud and unscrupulous pain clinics, which are sometimes owned by trial lawyers. “It amounts to an $800 million tax on Florida residents in the form of increased premiums,” says Associated Industries of Florida.

We need legislation that addresses these three issues.

John R. Smith

John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company.
John R. Smith

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