Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Florida Weighs $1 Billion or More Interim Bill to BP

Florida May Seek Billion-Dollar BP Payment
Florida would ask London-based BP to pay it separately from the $20 billion fund the company set up to handle claims so the state doesn’t have to compete with its own citizens. Photographer: Joe Raedle/Getty Images

Florida may send BP Plc a claim for more than $1 billion to close a budget gap after the largest U.S. oil spill slashed tax receipts from tourism.

Steve Yerrid, a Tampa lawyer chosen by Florida Governor Charlie Crist to advise him on legal issues concerning the spill, said the state may seek an initial payment in the “lower range” of billions of dollars to make up for lost tax revenue.

“We’re hoping rather than jobs being sacrificed or services to Floridians being lost, that we can develop some type of dialogue to get interim relief until state claims can be properly calculated,” Yerrid said in an Aug. 17 telephone interview.

States that filed claims for funds spent or revenue lost because of BP’s spill in the Gulf of Mexico would be joining idled fishermen and empty hotels struggling because tourists stayed away. Florida would ask London-based BP to pay it separately from the $20 billion fund the company set up to handle claims so the state doesn’t have to compete with its own citizens, Yerrid said.

“We desperately need an interim payment, just like the small-business owners that are just hanging on,” Representative Kathy Castor, a Florida Democrat, said yesterday in a telephone interview.

BP is “retaining the government claims process” and will work with states to reach a settlement, company spokeswoman Jessie Baker said today in a phone interview.

On August 23, the company will turn over the handling of claims from individuals and businesses to Kenneth Feinberg, a Washington attorney.

Alabama’s Claim

Alabama submitted a $148 million claim to BP last week for revenue losses due to falling tax receipts in Mobile and Baldwin counties along the Gulf Coast, Todd Stacy, press secretary to Republican Governor Bob Riley, said yesterday. He said he expects more claims to follow.

“There is literally no facet of the economy that hasn’t been affected by the catastrophe along the Gulf Coast,” Stacy said in a phone interview.

Alabama Attorney General Troy King, a Republican, said last week that he is suing BP, Transocean Ltd. and Halliburton Co. for damage caused by the spill. Transocean owned the BP-leased rig that sank after exploding, and Halliburton provided cement for the well.

Mississippi Attorney General Jim Hood, a Democrat, said he wasn’t aware of plans in his state to push BP for emergency checks.

“But we are always open to discussions about partial payments from people who owe us money,” Hood said in an e-mail.

Michael DiResto, a spokesman for the Louisiana Division of Administration, which is tallying the economic impact the spill has had on the state, had no immediate comment.

$5.5 Billion Gap

Amy Baker, chief economist for the Florida Legislature, said the state projects a $5.5 billion budget gap in the fiscal year that will start on July 1. Analysts will update the estimate to incorporate declining tax and tourism revenue, she said.

Yerrid said he has discussed his proposal with Castor and Democratic U.S. Senator Bill Nelson and was seeking a meeting with the Obama administration to win its support.

Florida is unlikely to have a final bill ready to present to BP before the budget squeeze hits, which is why an emergency payment is needed, Yerrid said.

BP and Florida have already clashed on what the company should pay.

The company turned down a request June 30 from Crist, an independent running for the U.S. Senate, for $50 million for a new marketing campaign to assure tourists that Florida’s beaches aren’t tainted by oil.

Tourism Marketing

BP did provide $7 million for advertising to help restore tourism in the state’s northwest Panhandle, where tar washed up on beaches for a time. The company also gave Florida $25 million earlier for a marketing campaign to entice wary vacationers and sent $50 million in block grants to pay for spill-mitigation efforts.

BP also announced Aug. 16 that it would provide $52 million to the four affected Gulf states for mental-health programs, including $3 million to Florida’s Department of Children and Families.

Yerrid said the state may also seek payments directly from BP to compensate for lost tax revenue from businesses whose claims are rejected by Feinberg, who will draw payments from the $20 billion escrow fund established by the company.

Feinberg said in an interview last week that a hotel “50 miles inland” is unlikely to have a valid claim.

While Feinberg won’t handle local and state government claims, he and BP have said those requests will come from the same $20 billion account.

BP’s American depositary receipts, each equal to six ordinary shares, fell $1.06, or 2.8 percent, to $36.24 at 4:15 p.m. in New York Stock Exchange composite trading and have declined 40 percent since the Gulf spill.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.