LOUISIANA INSURANCE ENVIRONMENT GETS AN “F”

Thursday, January 25th, 2018

Baton Rouge, Louisiana

LOUISIANA INSURANCE ENVIRONMENT GETS AN “F”

Louisiana has one of the worst insurance regulatory environments in the nation. That is according to Washington-based conservative think tank R Street Institute in its 2017 Insurance Regulation Report Card just issued. And no, it’s not because of the trial lawyers or the big insurance companies. The blame is laid directly on the Louisiana legislature. In ranking states across the country, Louisiana was given an F.

Florida, on the other hand, which has much more hurricane exposure than Louisiana, has made a huge leap toward ranking as a top regulatory state. The comparison between Louisiana and Florida is stark and troubling. The words "homeowners insurance" has nary been given a mention during past Louisiana legislative sessions. Affordable insurance to cover one's property has been the single biggest detriment for rebuilding in south Louisiana.  And yet there has not been one creative idea put on the table by legislators.  In Florida, finding ways to reduce the cost of basic home insurance has been the front burner issue for months.

The R Street report finds: “It is in recognition of these improvements that Florida, which was the bottom-ranked state in our first report card in 2012, has clawed its way to a very respectable B grade for 2017.” So Florida, with much more property damage exposure, gets a B, and Louisiana gets an F.

Florida has approved sweeping property insurance changes that have been touted in the state press as a "homeowner’s Bill of Rights."  The changes in Florida are directly opposite from the direction being taken in Louisiana.  Florida legislation holds insurance companies to a much higher degree of accountability when it comes to antitrust laws and violating a litany of other state laws. Insurers are now required to get state approval before raising property insurance rates, and are prohibited from using arbitration panels when there is a disagreement with property owners.  Rates charged to those who purchased Florida Citizens Property insurance have been frozen, and can never be higher than competing company rates.  All these changes fly in the face of the insurance company favoritism that dominates both the Louisiana insurance department and the Louisiana legislature.

Florida has also put in place a series of strong consumer laws with an insurance advocate uncontrolled by the insurance department. In Louisiana, efforts to create a separate insurance consumer advocate, independent of the insurance department, has met a chilly reception by legislators, who allowed (perhaps tongue in cheek?) for such an office to be created in the insurance department itself.  The fox guarding the hen house? 

The comparisons between the Florida Citizens Insurance Corporation and a similar company set up by Louisiana are striking.  Florida initially set up its company by doing what any normal business would do. Capital and surplus were put in place of over $700 million, and reinsurance in the private European market was obtained to protect the Citizens plan in case there were major losses. And there were adequate professionals hired to run the company on a daily basis.

Louisiana did none of the above.  From the day the Louisiana company was created by the insurance department and the legislature, Louisiana Citizens Property Insurance Corp. was a disaster waiting to happen.  We have read about the incompetent management and the rip-offs of millions of dollars in illegal spending.  The state run company waited often years to file financial statements or balance their checkbooks.  Not one dollar was allocated to the new start up company created by the legislature.  Is there any business that can start from scratch without having any money in the bank?

And if the failure to not adequately build in safeguards by Louisiana Citizens and the Louisiana Insurance Department officials who were running the company was not bad enough, the decision not to buy adequate reinsurance has turned out to be the biggest single financial disaster in Louisiana’s history.  Louisiana taxpayers will spend the next 20 years paying off the bonds that were sold to cover the losses, now well over $1 billion.

Louisiana and Florida have been two troubled states when it comes to affordable insurance, and each is taking a dramatically different direction.  Right now, it looks like Louisiana, made the wrong turn in the fork of the road.

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“It’s not hurricanes that are causing high insurance rates, but bad government policy,”

Policy analyst Michelle Minton

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide.  You can read all his past columns and see continuing updates at http://www.jimbrownusa.com.  You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9:00 am till 11:00 am Central Time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

HOW BAD IS STATE FISCAL MESS?

January 18th, 2018

Baton Rouge, Louisiana

HOW BAD IS STATE FISCAL MESS?

The sky is falling, the sky is falling.  At least the Louisiana fiscal sky is in a tailspin, or so says the Governor and a number of legislative leaders.  The hue and cry is for one billion dollars in new taxes along with significant fee increases.  Even the local papers are chiming in with headlines like “The fiscal threat is real to colleges” and about to “get real.”  What a poor taxpayer to think?

Let’s begin by getting real with where the state actually stands dollar wise. First of all, Louisiana is one of only eight states that are loosing population each year.  Over 27,000 people moved out of Louisiana last year.  Yet far from reducing the cost of government, it continues to go up at a rapid pace.  Three year’s ago, the state budget was $27.2 billion.  Today, it has jumped to $29.6 billion. Why the huge increase?

Where’s the responsible legislative discussion about more efficiency in government?  Where are the in-depth studies of how efficient current spending programs are being implemented?  Is the state getting it’s money’s worth by handing out movie tax credits, industrial tax exemptions, and numerous other grant programs?  Here’s what the GoodJobs Coalition says about the industrial tax exemptions:

The Louisiana Coalition for Tax Justice compiled all of the state’s property tax exemption records for the 1980s and published a devastating set of findings. The exemptions had cost local governments $2.5 billion. The harm to schools, the most costly local service, was the greatest. The state ranked last in high school graduation rates, while $941 million of the tax exemptions could have gone to improve the schools. Incredibly, almost three fourths of the projects that got exempted created no new permanent jobs

It found that local governments had lost $16.7 billion in revenue over the past decade. And the cost per new job? An astronomical $535,000.

The state just announced new interstate construction projects.   Why not a speed up toll lane like they have in Texas and other states?  And as I wrote a few weeks ago, the sale of roads, buildings, sewer systems and a number of other publicly built projects are being sold or leased to private groups in more progressive states all over the country as well as the federal government. The Lt. Governor is suggesting leasing or selling state parks.  Why not give the idea a look?  Can’t we even discuss such options in the halls of the state capitol?

How about a crackdown on state highway speeding?  I feel like I’m driving in the Daytona 500 when I travel to New Orleans on I-10 or to Mississippi on I-12.  Go 80 miles an hour and cars will constantly pass you by. Speeding tickets big financial rewards for the state in highway safety. There would be  money for more state troopers and other safety needs.

Financial threats to higher education?  Let’s be frank. Colleges in Louisiana, including LSU, have one of the lowest tuition rates in the country. The average tuition rate at four-year colleges, according to the Morning Advocate, is $5,620 with LSU’s tuition a bit higher.  But there are scholarships and the generous Tops program to help.  The average student debt on graduation is $27.000.  Not a big loan for a college education with years to pay it off.  Why are taxpayers picking up so much of the bill?

Many of these ideas are worth exploring and others might need to be discarded.  A financial audit is needed of every state department.  I was a statewide elected official for 20 years, and if I was forced to cut my budget, sure I would moan and complain, but I could do it.  Budget information is power, and there are ways to both save and generate more tax dollars without raising taxes.

Leadership means beginning the discussion and biting the bullet.  Time for the gang at the state capitol in Baton Rouge to step up to the plate.

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide.  You can read all his past columns and see continuing updates at http://www.jimbrownusa.com.  You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9:00 am till 11:00 am Central Time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

SABAN THE BEST THERE EVER WAS!

Thursday, January 11th, 2017

Baton Rouge, Louisiana

SABAN THE BEST THERE EVER WAS!

I don’t normally write a sports column, but a few words would seem appropriate after Alabama’s startling victory this past Monday night in the College Football Championship game. Simply put, love him or hate him, Alabama head coach Nick Saban is the best college coach in football today, and maybe the best college coach ever.

Now many LSU football fans don’t want to here this, and seem to be consumed by an abhorrence of the former Tiger coach who took LSU to a national championship back in 2003. Sabin left the Bayou State for what he considered greener pastures in the NFL, then returned the Southeast Conference to take the head coaching job at Alabama.  Many LSU fans consider Saban a traitor for taking on the post coaching the Tiger’s archrival.

But the proof is in the pudding, and Saban has now won six national titles, tying former Alabama coach Bear Bryant’s all time record.  So what’s the reason for Saban’s success?  Simply put, he is unquenchable in his approach and commitment to coaching.  And losing, in Saban’s mind, is never an option. In fact, one can argue that he hates losing more than he loves winning.

His entire focus is preparation for the next game or next season. I know one of his assistant coaches here in Baton Rouge who told me he felt embarrassed taking off Christmas Day or any another holiday, knowing full well that Coach Saban would be in football office that day at LSU. His only hobby is coaching football.

A story I heard from a close friend of Saban is an example of his insatiable commitment to coaching. Both Sabin and his friend we’re out to dinner on a Saturday evening with their wives. About 10:30 pm, Sabin’s cell phone rang. The coach excused himself from the table and stepped outside the restaurant, staying on the phone for almost 30 minutes.

Later, as they were leaving the restaurant, Sabin’s friend asked him was there any problem because of long phone call. No, Saban responded. It was just one of his recruits who was calling to talk about a personal problem. Sabin said he gave all his recruits his private cell number, and told them he was always available to talk about football or any personal matter. Now how many coaches at major college programs will give out their personal cellphone number to a high school recruit?  Simple.  A coach like Nick Saban who wants to be number one.

In 2012, Alabama played LSU for the College National Championship at the Superdome in New Orleans.  Our family had booked early rooms at the Hilton hotel, which was also the team hotel for LSU. Many of the players were on our same floor, and the night before the game, they were hanging out with girlfriends, and cruising throughout the hotel. Nothing rambunctious, but just “hanging out” before the game.  One of the players told me they had no team meetings scheduled the night before kick off.

Coach Saban had bused the Alabama team to a movie theater outside of town that was owned by my father-in-law. Sabin’s office had called to arrange for a private showing of the World War II movie, “Red Tails,” about a black flying squadron who faced long odds fighting German air attacks. After the movie, Coach Saban went up on the stage and repeated word for word the movie’s rallying cry.

"From the last plane, to the last bullet, to the last minute, to the last man, we fight!"

“We fight.”

“We fight.”

Last Monday night, Coach Saban’s Alabama team was behind the entire game until the last second of the overtime. They fought and fought as Saban’s intense energy and coaching momentum urged his players on. In Nick Saban’s words, “to the last minute, to the last man, we fight!"

His team did just that, and Alabama continues it’s reign as America’s premier college football program. These are the reasons why Coach Saban is simply the best college coach today, and perhaps the best there ever was.

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“I always ask myself the question, do you like to win, or do you hate to lose?”

Nick Saban

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide.  You can read all his past columns and see continuing updates at http://www.jimbrownusa.com.  You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9:00 am till 11:00 am Central Time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

THE RISE AND FALL OF LSU!

Thursday, January 4th, 2018

Baton Rouge, Louisiana

THE RISE AND FALL OF LSU!

There has been a lot of bad news out of LSU, Louisiana’s flagship university in recent weeks. Not just on the football field where the Tigers have completed a mediocre season, even though they have the highest salaried group of coaches in the nation. Campus shortcomings have raised a number of troubling questions about poor administrative decisions being made.

Tolerance of fraternity hazing that led to one student’s death received national attention.  So did the building of a “floating river” on campus in the shape of the school’s initials.  The Wall Street Journal had this to say recently about this boondoggle.  “There may be no better symbol of American higher education wasteful indulgence then Louisiana State University’s lazy River.”

The latest hit is a report form Kiplinger’s financial magazine published just last week citing how public universities rank when it comes to academic quality and getting “the best bang for your buck.”  LSU ranked at 270th, far behind every other SEC school with the exception of Mississippi State. So what’s happened to cause such a dramatic demise?

Huey Long was the best friend and supporter LSU ever had as he force-fed LSU with increasing appropriations. The Kingfish made no bones about his long-term goals for the state’s flagship university. “LSU’s going to be the Harvard of the South.”

LSU’s significant relevance as an educational pillar continued into the 1950s. Prominent writers like Robert Penn Warren made the Baton Rouge campus a gathering point for major literary figures. The Southern Historical Association began publishing its Journal of Southern History as well as the long respected Southern Review, all from LSU. And the LSU Press became the publishing beacon for serious fiction and non-fiction rivaled only by the University of North Carolina Press.

Outstanding young academicians in a variety of fields were attracted to Baton Rouge, and the music department produced grand opera accompanied by its own symphony orchestra under directors of international acclaim. The efflorescence of so much creative and academic talent drew praise for Louisiana nationwide.  But that was then. What happened in recent years that caused Louisiana State University to be an also ran, not just nationally, but right here in the Deep South?

The 60s came along and other southern states did not have the huge reservoirs of oil and gas. Education became a key to their survival. But in Louisiana, who cared about having a college degree when an oil field worker with a tenth grade education could make as much or more than many professionals with graduate degrees? A college degree became less relevant. And that’s when politics came into the mix.

With the economy running on auto pilot in Louisiana and unemployment running way behind other southern states, the cry for “keeping the flagship university strong” fell on deaf legislative ears Rural legislators were more concerned about beefing local colleges up to LSU status, and even building unneeded new colleges and trade schools. And LSU became its own worst enemy by not aggressively making their case of why a flagship university was, and is today, critical to the economic well-being and future of the state.

UNC is listed as the number one college in the new Kiplinger report. In North Carolina, there is one board for higher education. The centergy is around the flagship, my alma mater, the University of North Carolina at Chapel Hill. When Louisiana’s constitutional convention was held in 1973, LSU was nowhere to be found, as it should have been, to lobby for a single college board. So now we have every college in the current four board system pushing to be a little LSU.

James Carville dismissed many of the state’s problems by saying that Louisiana is not just a way of life; “It’s a culture all its own.” But every state has its own special ambiance, or way of life that is unique. Maybe they don’t throw Mardi Gras beads and use Tabasco sauce. Saying Louisiana is “special in its own way” is a cop out if its leadership has not made the commitment to accentuate its best and brightest. 

Louisiana is at a crossroads. If the state’s leadership does not work to protect and promote a high degree of excellent achievement at LSU, the best and the brightest students will leave the state or settle for a less challenging education offering them few opportunities in the future. The whole state will suffer from such a loss. 

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“Half the crowd in Tiger Stadium on a Saturday night can’t even spell LSU.”

James Carville

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide.  You can read all his past columns and see continuing updates at http://www.jimbrownusa.com.  You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9:00 am till 11:00 am Central Time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.