February 7, 2012
More than one-third of the U.S. Senate has already signed onto a letter that calls on Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., to bring flood insurance reform legislation to the floor sooner rather than later. There’s no doubt that this is a good measure and makes a lot of sense.
Next week, Sen. David Vitter, R-La., and Sen. Jon Tester, D-Mont., are going to be holding a press conference along with a number of organization CEOs—including Heartland’s Joe Bast —to call for speedy reauthorization of the National Flood Insurance Program. As I wrote about last week, the program is one of the few chances that this Congress is going to have to get a real bipartisan success.
It’s worth noting that although McConnell is an addressee to the letter, he has almost no authority or ability to move anything on to Senate floor; that’s totally in Reid’s purview. My latest intelligence is that Reid, indeed, does want to move it forward and may even greet the press conference in a positive way. Quite simply, there’s no excuse for further delay on this piece of legislation.
Proposals to remake and reform Florida’s troubled insurance environment remain stuck in legislative limbo. A lot of the problem stems from the actions of one Dorothy Hukill, as Heartland’s own Christian Camara has documented. Hukill, in my judgment, has very little sense as to what makes for good or bad policy. Basically, Hukill pulled the bill at the last minute at the request of Florida Insurance Consumer Advocate Robin Wescott, who works for state Chief Financial Officer Jeff Atwater. In a piece titled “Hurricane Hukill,” the Wall Street Journal’s Mary Kissel describes just how confused Hukill seems:
In a telephone interview…Ms. Hukill told me that while she is a “supporter of reform,” she can’t say whether the bill will “definitely be heard.”…Ms. Hukill couldn’t name a single item in the bill that she objects to, averring instead that the legislation “wasn’t ready to be heard yet” and that she wants to consider “lots of different suggestions. Time is running out to reform the funds before the legislature goes home in March.”
In short, a “conservative” reformer—which is what Hukill claims to be—seems to have no clue, idea or ability to move forward a much needed piece of reform legislation. It’s a sad and sorry day for the State of Florida.
The good news from Florida, however, is that a proposal to reform the “standard assessment” associated with Citizens Property Insurance Corp. appears to be moving forward in the Legislature. This is far from a fix for Florida’s significant property insurance ills but it would more or less end the risk that Citizens-related assessments (special taxes) would put smaller insurers out of business. It’s a very sound proposal.
It doesn’t have to do with insurance but I’m intrigued by this proposal that the University of California system charge tuition after graduation. (Although structured a bit differently, it’s similar in consequences to the system of Human Capital Investment Accounts proffered by Heartland Policy Advisor Richard Vedder.) Under the proposal, all University of California students would pay “tuition” after the fact based on a percentage of their earnings.
Although the system has a number of practical problems—including determining how a transition would work—it strikes me as a great idea overall. Here are some advantages I see to it:
- It’s great for college access: Although there’s very little evidence that tuition costs per se stop anyone from going to college—it’s a lot more complicated than that—they certainly impact where people go to college and, to some extent, if they stick with it. That eliminates this problem for poorer students.
- It may eliminate a fair part of the “money chase”: Colleges, like all non-profits, spend a fair amount of time and money chasing more money. To a certain extent this will and should continue in any case. But if all alumni really provide 5% of their income with no cap for 20 years, then really rich alumni are going to have to make VERY big gifts for awhile. Mark Zuckerberg, for example, would have given his alma mater a $750 million gift in Facebook stock. It’s possible that such people then aren’t going to give even more (which some will) but it will probably even out. Colleges wouldn’t face as much pressure to cater to their wealthiest alums since very significant gifts from these people would flow nonetheless.
- Preferences for the children of alumni would become much less important: Although I dislike race-based admissions preferences, I’m much more bothered by preferences for the children of people who attended a certain school. While some schools could always keep them; there would be little financial incentive to do it under such a system.
- Colleges would pay more attention to preparing people for the workforce in realistic ways. Since liberal arts graduates tend to out-earn those without liberal arts educations, I don’t see this as a death knell for liberal arts. In fact, it might even get colleges to encourage more people to major in liberal arts. Also, if unemployed people were exempt from making payments, colleges would have a strong incentive to help their alumni find jobs even after graduation.
All-in-all, I love the Fix UC proposal.