Blanco to Call Special Insurance Session Scheduled for December

November 20, 2006

Lawmakers will return to Louisiana’s Capitol for a rare December special session to work on insurance relief for property owners, tax cuts, road improvements and pay raises for teachers, police and firefighters, Gov. Kathleen Blanco’s office said.

The agenda for the session beginning Dec. 8 will include a variety of money issues vaguely outlined in a statement from Blanco, including ways to spend an $827 million budget surplus from last year and any additional dollars recognized by a state revenue panel for the current year.

Lawmakers also will work to rebate insurance rate hikes caused by the state-run insurer of last resort, called the Louisiana Citizens Property Insurance Corp., according to Blanco’s statement.

The governor, who had been pressured by lawmakers and other state officials to call the legislative session, said the special session will last no longer than 10 days, ending by Dec. 17. Blanco chose the dates after meeting with her top legislative allies Nov. 17.

On the list of proposed spending were the raises, road repairs, incentives to attract new businesses to Louisiana, retirement system debt payments and repairs to state buildings, particularly on college campuses around Louisiana.

With the unspent money, Blanco said, “First, I insist on tax cuts for families and businesses. This is a must.”

It wasn’t immediately clear what kind of tax breaks Blanco wanted or how much she was seeking in pay raises. The governor’s office said Blanco would give details about her legislative plans on Nov. 20, and her spokeswoman refused to elaborate.

The Blanco statement talked of pay raises for teachers, college faculty, school support workers, prison workers, probation and parole officers, state employees, police and firefighters.

“My goodness, Santa Claus has come to town. Who did we leave out here?” said Rep. Jim Tucker, R-Terrytown, head of the House Republican Caucus, as he read through the list of potential pay raise recipients.

Tucker said the governor’s statement seemed to include more spending than the state would have money and strayed too far from what he said should be paramount: insurance, transportation and a revamp of Blanco’s Louisiana Recovery Authority, which wasn’t mentioned in Blanco’s list.

“This is a trial balloon to see which ones people feel we really need to do,” Tucker said.

Top on Blanco’s list was insurance relief involving Citizens.

Citizens was financially strapped after last year’s hurricanes and borrowed $1 billion to pay off claims related to hurricanes Katrina and Rita.

To repay that debt, Citizens – established in 2003 by the state to offer property insurance to those who can’t get it on the open market – assesses fees on private insurance companies that are passed along to homeowners around the state, even those who aren’t Citizens customers.

Blanco and lawmakers want to cover the costs of much of that debt and refund to homeowners any dollars they spent on insurance rate hikes caused by Citizens.

The number of Citizens policyholders has swelled since Katrina and Rita, as other firms stopped writing policies and individuals needing coverage were left with few options. That puts a greater burden on the state-run insurance company, which is seeking rate hikes that could more than double some homeowner policy costs.

Blanco is looking at ways to overhaul Citizens entirely and attract and keep other insurers to Louisiana to spread the risks and keep costs from rising even higher, but that appeared to be delayed until the regular legislative session.

The special session will be held later than Republican lawmakers wanted. They tried to get lawmakers to call themselves into session, circulating a petition that would have done so, but the GOP legislators couldn’t get enough members to agree to sidestep Blanco and hold a special session on their own in November. Blanco’s allies helped squelch the petition.

The governor can call a special session at any time, but for lawmakers to call themselves into session, they need a majority of lawmakers in both the House and Senate to agree.

The session, however, falls earlier than many lawmakers sought. House Speaker Joe Salter, D-Florien, a top Blanco ally, said many legislators preferred to hold a special session in January to avoid conflicts with the holidays.

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