The state received an $800 million sales tax windfall from hurricane reconstruction last year, but Florida Gov. Jeb Bush said Tuesday that he’s against using any public dollars to bail out the state-created insurer of last resort.
Citizens Property Insurance Corp., instead, assessed all homeowners, including those covered by other companies, 6.8 percent of their premiums this year to cover a loss of more than $500 million from the four hurricanes that struck Florida in 2004.
Another assessment, probably larger, is expected in 2006 due to more losses from this year’s storms, but the figures have not yet been calculated.
Chief Financial Officer Tom Gallagher, also a candidate for the Republican gubernatorial nomination in 2006, wants to use part of the hurricane-related tax revenue to cover Citizens’ losses.
“It’s money that wasn’t expected to come in,” Gallagher said. “It’s certainly a burden I believe we should lift from the people.”
Bush, who is forbidden by the Florida Constitution from seeking a third term, disagreed during a news conference after signing a lobbyist gift ban into law.
“I think that then puts the state on the front line directly responsible for insurance losses,” Bush said. “That’s what the insurance companies want. They’d love to be the agents where they just make commissions, process the paperwork and provide customer service.”
The state has plenty of cash to cover such a bailout. It has a $4.6 billion reserve fund, and a new estimate last month projected $3.2 billion in revenue growth over previous predictions for the current and next budget years, partly due to more hurricane reconstruction.
Bush said he did not consider the Citizens assessment to be a tax and that he is afraid the quasi-governmental company is expanding beyond its intended last-resort role because private insurers are shunning Florida.
He said the Legislature should pass reforms to strengthen the state’s insurance market.
“The worst thing to do would be to write a check from general revenue without any reform,” Bush said. “The policymakers need to take this seriously or it’s going to have a dramatic, not only impact on Floridians’ ability to make ends meet, but it’s going to have a dramatic impact on our economic development efforts as well.”
Topics Profit Loss Florida Hurricane
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