State of Florida

"When the rating agencies developed and rolled out their ESG scores, they said their ESG scores would not impact an issuer's credit rating. We are holding them to their word," said Ben Watkins, director of the state Division of Bond Finance.

The state Senate on Tuesday gave a green light to the general appropriations act, which now goes into a constitutionally required 72-hour cooling off period before a Friday vote.

The Florida Legislature has passed a law that bans the issuance of municipal bonds, such as green bonds that use environmental, social or governance criteria. The bill now heads to Gov. Ron DeSantis for his signature.

"Florida may have the statutory authority to abrogate an agreement, but  what does that say for things going forward?" asks Joseph Krist, publisher of Muni Credit News. "Why couldn't an anti-development administration do the same thing in reverse to somewhere like the Villages?"

The bill would create a state investment fund and establish a debt reduction program to be administered by the Division of Bond Finance.

Gov. Ron DeSantis on Monday signed the bill to rename the Reedy Creek Improvement District and end Disney's self-governance. Separately, the Legislature will look at prohibiting the issuance of environmental, social and governance bonds and using associated ratings.

"The main point is that this is a change primarily in name only," said Ben Watkins, head of the state's Bond Division. "There will be no impact on debt whatsoever."

"Our budget proposal not only builds on the successes of the past four years, but ensures that Florida will continue to thrive," said Gov. Ron DeSantis.

The Miami area unemployment rate fell to 1.4% in December and saw the second-highest number of private-sector job gains in the state on a year-over-year basis.

The state's benchmark debt ratio for debt service to revenue is at 3.78% — well below a 6% target and 7% limit.

"I think it's undemocratic of major asset managers to use their power to influence societal outcomes," said Florida CFO Jimmy Patronis.

Watkins has served in a variety of leadership roles on muni associations and is described by colleagues as a tireless advocate for the municipal bond issuing community.

Ben Watkins, Director of the State of Florida's Bond Division, talks with Chip Barnett about the latest news coming out of the Sunshine State and takes a look at what's happening in Reedy Creek. He discusses Florida's bonding and debt, infrastructure plans and dives into the state's ESG priorities. (30 minutes)

“In the Great Recession it took us like seven or eight years to get back to where we were pre-recession,” Florida's Ben Watkins said. “This time it was less than 24 months.”

While the outlook revision reflects the view there is a one-in-three chance RCID's credit profile could be positively or negatively impacted, future events remain unclear, said S&P's Christian Richards.

Florida's economy is stabilizing from the COVID-19 pandemic, but nature and man may bring other threats to its recovery.

Over the next 10 years, the Division of Bond Finance forecasts about $1.8 billion of net tax-supported debt will be issued, mostly for transportation projects.

South Florida commuters stuck in traffic may see some relief ahead as Miami-Dade County steps up investment in its transportation infrastructure.

The state's record-high budget includes relief from the federal American Rescue Plan Act.

Revenue from the new law would replenish the state's unemployment fund and then cut taxes on commercial real estate rents.