State lawmakers began debating Insurance Commissioner Tim Temple’s industry-friendly “free market” approach to solving the state’s insurance crisis on Wednesday. Legislation advanced out of committees that would let insurance companies drop longtime customers, raise rates more often and weaken penalties for companies that try to avoid paying what customers are owed after disasters. But as The Times Picayune | Baton Rouge Advocate’s Sam Karlin and James Finn report, Gov. Jeff Landry pushed back on a key legal issue favored by the insurance industry:
A key attorneys group helped craft a sweeping bill, Senate Bill 323, to reshape how claims are handled, and Landry, who took in big donations from attorneys for his gubernatorial bid last year, sided against insurers by supporting House Bill 315, which lengthens the statute of limitations for filing personal injury and property damage suits. “It’s high time that the insurance companies do what we pay them to do,” Landry told a state House committee. … Though he lashed out at insurance firms in the House hearing, Landry told lawmakers that he has confidence in Temple’s property insurance legislation.
Louisiana has been down this road with car insurance, as industry lobbyists promised in 2020 that premiums would come down if legislators passed “tort reform” laws making it harder for people to recover damages from their insurers. It didn’t work, as state drivers now pay the highest percentage of their income in car insurance in the nation. The Louisiana Illuminator’s Wesley Muller reports:.
When pressed, Temple would not say for certain whether his proposals would actually cause a decrease in insurance premiums. He told lawmakers he would take full blame if his agenda fails to reduce rates in Louisiana, but he would not say if he would call for repeal of the measures if they do not work. Lawmakers have made little effort to address the failure of the 2019 tort reform agenda. Those laws are still on the books and in full effect.
The Shreveport Times’ Greg Hilburn explains the frustration – among too few lawmakers – that proposals to solve the state’s insurance crisis are focusing on pro-insurance industry policies instead of addressing the underlying cause of more frequent and extreme weather events.
But Democratic New Orleans Sen. Royce Duplessis argued that hurricanes, not the three-year rule, are the biggest barriers to insurers expanding into Louisiana. “How can we have true confidence getting rid of the three-year rule will make our market more competitive?,” he asked Temple during debate in the committee.
Subsidizing Hollywood is expensive for states
States have doled out more than $25 billion in incentives to movie and television productions over the past 20 years. Louisiana, an early leader for film subsidies, has given away $3 billion. While film-industry advocates claim these efforts promote broad economic activity, fiscal data shows how much states lose when they subsidize Hollywood. The New York Times’ Matt Stevens and Christopher Kuo report:
But independent fiscal monitors for the states have often found meager returns on investment. A recent report prepared for state auditors in Georgia estimated that the tax revenue returned on each dollar spent on incentives was 19 cents. A similar report from New York determined the return was between 15 cents and 31 cents. … Independent studies have found that even when movies are made, the incentive programs have mixed to insignificant impact on job creation and economic development. Researchers say each job created by the programs can cost taxpayers more than $100,000.
Multiple studies have shown that Louisiana’s film subsidy program has similarly paltry returns. The state spent $152 million on film production in 2021-22.
Closing the wealth gap for Black women
Black women in the United States earn just 64 cents for every dollar made by their white, male counterparts. Some estimates also show Black women have approximately 90% less wealth than white men. The Urban Institute’s Tianna Newton and Elise Colin lay out five ways that policymakers can help close this disparaging wealth gap, including ensuring pay equity:
Black women face both racial and gender discrimination in the workforce, making it difficult for them to earn fair wages and to get promoted. As a result, Black women are underrepresented in leadership roles in many professional occupations. Policies that require greater pay transparency and hold organizations accountable for how they treat, promote, and compensate Black women could help ensure Black women have the opportunity to receive higher wages and advance their careers.
Abandoned wells pose risk to carbon capture
Louisiana’s 120,000 abandoned oil and gas wells pose a risk to the lucrative, but unproven process of injecting and storing carbon emissions underground, according to a new report from the Center for Applied Environmental Science at the Environmental Integrity Project. Carbon capture and storage is a process where industries that emit carbon dioxide capture their emissions, pump those emissions into pressurized tanks or pipelines to liquefy them, and then store that liquid carbon dioxide underground. Louisiana has more proposed carbon capture projects than any other state. Inside Climate News’ Nicholas Kusnetz reports:
While the regulations for carbon dioxide storage are more rigorous than those that cover injection of other substances, abandoned oil wells represent a weak spot in the rules, said Dominic DiGiulio, a former EPA geoscientist and co-author of the new report. “Plugged wells do leak. These wells were plugged a long time ago, and now we’re going to store supercritical CO2 under very high pressure and hope that these things somehow last thousands of years,” DiGiulio said. “It’s a problem.”
Louisiana was recently allowed to take regulatory control of carbon capture projects away from the federal government. But many are concerned about the state’s ability to self-regulate:
Many advocacy groups worry the state is not equipped to handle oversight of this new and complex technical challenge, and they say state regulators have a history of deferring to the oil and gas industry. They point out that the new secretary of the Department of Energy and Natural Resources, which regulates the wells, previously led Louisiana’s chief oil and gas lobbying group.
Number of the Day
$650 million – Estimated annual cost in five to seven years of a proposed state program that would create universal taxpayer-funded stipends for all students, better known as Education Savings Accounts. (Source: Public Affairs Research Council via the Louisiana Illuminator)
