BATON ROUGE, La. (AP) — Insurance Commissioner Jim Donelon said it's premature for the state property insurer of last resort to borrow $100 million to help close a budget gap, according to a letter released Tuesday.
Donelon's assessment came after the board for the Louisiana Citizens Property Insurance Corp. approved the borrowing idea, which would be done by selling bonds to investors for upfront cash.
Citizens provides property insurance mostly to coastal Louisiana homeowners and businesses that can't get insurance through the private market. But the borrowing would drive up the costs to anyone with property insurance on the private market and create new costs for the state's budget.
Gov. Bobby Jindal's administration, which opposes the borrowing, released a letter from Donelon in which the insurance commissioner says he also disagrees with the need for a bond sale.
The borrowing "is premature as we do not have a cash flow problem and are likely to be able to meet all of our obligations for the foreseeable future," Donelon wrote to Jindal's commissioner of administration, Kristy Nichols.
Any plan for Citizens to sell $100 million in bonds needs approval from the state Bond Commission.
Citizens' officials say the company will be millions of dollars in the red after covering claims for Hurricane Isaac and settling class-action lawsuits for improper handling of past storm claims.
If Citizens borrows money, those costs would be passed on to insurance customers covered by private companies through an assessment on all commercial and personal policyholders statewide.
The state's budget would be on the hook for some of the cost, because the assessment can be claimed by policyholders as a state income tax credit.
Nichols said the bond sale would be bad for property owners and would divert tax dollars from critical needs like education and health care.
MAY 17 Here's a column from James Gill, this time in the Advocate. Gill, who has jumped ship from the Picayune, writes about the absurdity of dueling polls in this post. The numbers are so wildly different, it is obvious that both sides are "cooking the books," he writes. In particular, he looks at Sen. Mary Landrieu, and how her recent actions in DC have been received by those polled. Gill's acerbic, amusing prose is a welcome addition to a paper so conservative as to be occasionally lacking in personality.
MAY 17 Blogger Tom Aswell continues delivering bombshells about the state education department and Gov. Jindal's education "reform" efforts. In this post, he reports that students in the Shreveport area have been signed up for a charter school without their knowledge or consent. Most interesting to Aswell is how this Texas-based charter (with ties to GOP types) got the personal student information it has, if the students didn't give it.
MAY 17 This post by JR Ball in the Baton Rouge Business Report is an interesting tongue-in-cheek look at recent Baton Rouge economic development efforts. Among the items he examines is the idea that gaining a Costco makes BR a "world-class city." (Really? All you need is a different brand of Sam's? MK!) This effort, and other recent ones, are all built on the taxpayer's back, with tax zones, tax incentives and tax rebates, Ball writes.
MAY 17 Blogger CB Forgotston is critical of the legislature's reliance on a revenue-estimating committee's decision to include projected tax amnesty income in this year's forecast. That's a problem, CB posts, because the deadline for these people to pay their taxes is June 30, 2014. So when do you think these people who haven't paid taxes in years are going to pay their taxes? Surely not before June 30, and that means the money won't be there for this year's budget, he argues.
MAY 17 Here's an interesting blog out of California by a Hollywood writer, attorney and academic named Brian Alan Lane. He blogs about higher ed, and was a whistle-blower in a scandal over false credentials. In this post, he takes aim at LSU's new top dog, King Alexander. It's convoluted and a little confusing, but it sure makes Alexander a lot more interesting than he was yesterday.
MAY 17 Blogger Robert Mann writes about the LSU Board's refusal to allow Dr. Fred Cerise to testify before the legislature about Gov. Jindal's plan to close down all the state's charity hospitals and dump the poor on the private system. It's hard to imagine anyone more qualified than Cerise to testify about that, so why would anyone try to prevent him doing so? Mann thinks it is because the powers that be aren't interested in hearing any truth about the plan.
MAY 17 This post on the Louisiana Sinkhole Bugle, a blog that notes developments in the Bayou Corne and Jefferson Island salt domes, talks about a proposed expansion of the salt dome storage under Lake Peigneur in Iberia Parish. Residents are working against it for several reasons, including two biggies: the sinkhole disaster in Bayou Corne and the continuing, unexplained bubbling on the surface of the Lake.
MAY 17 NOLA police arrested more people Thursday accused of either being involved in the Mother's Day shooting or hiding the suspect afterward, this Gambit story reports. The NOLA police chief said he suspects the whole thing was gang-related and throws out a challenge to the gangs: he's got informants now, he says, and he knows a lot more than the gangs want him to know. The people who live in the neighborhoods terrorized by gangs are ready to talk, he says.
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