Ameliorate claims payment woes and bigger government

An idea floated by (relatively new) Republican state Rep. Blade Morrish has potential to benefit the state as well as his political career, but he and others have to see it through to its logical conclusion to make it a real service to Louisianans.

Morrish wants to help pay down the debt owed by Louisiana Citizens Property Insurance Corporation, the state-owned insurer of last resort, as a result of horrific claims filed after the 2005 hurricane disasters by diverting the tax currently paid by homeowners on insurance premium to this purpose. Currently, this estimated $124 million a year goes right into the black hole of the budget known as the general fund where it can be spent potentially on things like unaccountable nonprofit agencies. This would obviate the need for special assessments in addition to the tax being paid by policyholders.

This elegant proposal would match the origin of the tax with a purpose related to its origin, insurance. It’s a fine first step, so good that even the hardheaded Democrat Gov. Kathleen Blanco administration recognizes that (after it had to get dragged kicking and screaming to the whole idea of doing something to eliminate or reduce the assessments in the first place). It also helps Morrish politically, as he pursues a post-term-limited House career by running for the state Senate next year.

But it becomes a great idea completely executed only if Morrish and others take the next step, and that would be not to find another $124 million in revenue to supplant it, but to cut that spending entirely. Any surplus then could go to pressing matters such as debt reduction, overdue highway construction, or shoring up unfunded accrued liabilities in retirement plans. And the final step would be, when the bonds are paid off, to eliminate this tax in its entirety.

Anything less ends up being just an exercise in shuffling money around, in effect creating a special assessment by other means. Fairness and fiscal discipline argue this total solution must be part of any upcoming special session; let’s just hope Louisiana’s politicians have the courage to do so.