The Daytona Beach News Journal
Editorial
December 2, 2011
As he approaches the end of a turbulent first year in office, Gov. Rick Scott continues to show no reluctance to take on controversial issues.
The governor’s critics are impassioned and his poll numbers are relatively anemic, but he seems unfazed by the criticism and the polls. During a recent meeting with The News-Journal’s editorial board, he outlined an ambitious agenda that likely will put him at odds with some powerful groups and possibly with hundreds of thousands of Florida homeowners.
Scott’s calm demeanor contrasts with the belligerent response some of his fiscally conservative initiatives have inspired. He ignited a firestorm during the 2011 legislative session by successfully pushing for public employees to contribute to their pensions. With redistricting on the Legislature’s plate next year, the 2012 session promises to be less eventful, but Scott will try to stir the pot with proposals to reform auto insurance and higher education. He already is pushing for administrative changes to shrink the financial exposure of Citizens Property Insurance Corp., the state-backed insurer.
It’s not clear whether lawmakers will steel themselves for action on Citizens, which has grown enormously in recent years and now has more than 1.4 million policyholders. But Scott says he is determined to “downsize” Citizens, which was originally designed to serve as the insurer of last resort for property owners in hurricane-threatened areas.
The state’s Personal Injury Protection auto insurance law, known as PIP, is a prime target for reform. Scott should have a good shot at revamping PIP: The law has spawned a major fraud industry that is rapidly driving up insurance premiums.
According to the Insurance Information Institute, Florida drivers are paying a $50-per-vehicle “fraud tax.” Scott told The News-Journal that “PIP is a significant tax on people — especially the poorer people.”
It’s well known that Scott isn’t fond of taxes — in whatever form they may take. He certainly should pursue relief for honest car owners forced to foot the bill for con artists. Some legislators want to repeal PIP, arguing that there is no way to reform the mess caused by this no-fault insurance. Their argument has merit, but PIP so far has resisted many efforts to improve it, so the odds of complete repeal are slim.
Scott will face opposition on PIP reform from lawyers and segments of the health-care industry. Motorists should hope he shows the same determination he displayed during the battles over state pension reform and merit pay for teachers.
Citizens is a tougher nut to crack, because so many Florida homeowners have been getting a better deal through the state-backed plan than they could find in the private market. The trouble is, Citizens has put Floridians on the hook for billions of dollars in losses in the event of a bad hurricane season.
If a 1-in-100-year hurricane — or a series of smaller hurricanes — hit Florida, most Florida policyholders would have to pay large assessments to help cover the losses. This is a hidden, lurking tax that should worry all Florida homeowners.
Scott asked the Citizens board to present recommendations to the Florida Cabinet for reducing the company’s exposure. The proposed changes wouldn’t require the approval of the Legislature, but Scott may look for opportunities to privatize Citizens or make changes in the law governing the company.
The governor is right to question the state’s deep and potentially costly involvement in the property insurance market. But he will have to tread carefully in this area, keeping in mind that the homeowners’ market has not functioned well in coastal areas since the terrible hurricane seasons in 2004 and 2005.
Higher education presents a major challenge for the governor. He believes that the state should gear its funding support to the STEM fields (science, technology, engineering and math). If his reform ideas are perceived as an assault on a traditional liberal arts education, he will run into considerable political difficulty.
College costs are soaring and more and more graduates are having trouble finding well-paying jobs. Scott should focus on controlling college costs, encouraging colleges to emphasize classroom teaching and helping students to align their coursework with their career goals.
Rick Scott is a politician on a mission to streamline government and promote the private sector. He’s generated intense controversy, but he deserves credit for acting on his principles as opposed to purely political calculations.
