Oklahoma's CompSource, a nonprofit insurer that receives heavy state and federal tax breaks based upon its status as a unit of the state, insures over 26,000 policyholders -- most of them engaged in dangerous industries such as oil, natural gas and construction. The Forbes article says that CompSource "specializes in small firms or those who workers have dangerous jobs in fields...which private insurers won!
't take because the chance of paying claims is too high."
However, also according to the article, CompSource "has been criticized over the years by those who believe its status as a state agency gives it an economic advantage over private insurers and that the state should not be in the business of writing insurance."
Skeptics of the sale of CompSource say that it will be a difficult process because the agency has a loss rate of nearly 100 percent, meaning there will be few buyers of a business that generates no profit.
It is not unusual for skeptics of private competition to tout "market failure" or "thin markets" or "public good" as a reason to forgo turning state assets or programs over to for-profit entities that might be able to squeeze some benefit out of the operation. The fear is often that a for-profit business will not act in the public good and will cut services or raise rates to squeeze out the m!
But these fears are unfounded and econo!
mic reality belies their fears if there is a competitive marketplace, and it appears that Oklahoma benefits from multiple industrial insurance providers. Competitive pressure forces firms to offer better products at lower prices and keeps runaway costs in check because otherwise the companies offering the industrial insurance services will not make money.
The problem with rationalizing that government gains nothing by running an industrial insurance agency, as opposed to a for-profit entity, is that government does in fact benefit. Government, like any non-profit or for-profit business, is always interested in growing in size and influence or by generating surplus revenue to subsidize other state operations.
Case-in-point: if CompSource really is a 100 percent loss agency, that means it must rely on subsidies from other Oklahoma state agencies to make up losses in order to provide the policies. Private sector businesses, non-or-for-profit, cannot do that and m!
ust look for efficiencies or other ways to remain solvent. The benefit to taxpayers is that they are not subsidizing other workers' industrial insurance.
The state Sunshine Committee this morning unanimously adopted a recommendation that any new exemptions from public disclosure undergo a sunset review. Here is the recommendation as adopted by the Committee:
The Committee makes the following recommendations for new legislation:
1. The Legislature incorporate all existing and further exemptions into the Public Records Act by express reference.
2. The Legislature limit all future exemptions to a term of five years and be that such exemptions be examined by JLARC (Joint Legislative Audit Review Committee), the Sunshine Committee, or other competent body, a year prior to their expiration on a case by case basis to determine if they merit reauthorization or should be eliminated or revised.
Be it Resolved that it is the sense of this committee that all
exemptions to the Public Records Act and any statutory basis to
withhold information or records be eliminated after two years unless
specifically reauthorized by the Legislature with the exception of
those ten included in the original legislation; and that the
Legislature examine all of the eliminated exemptions individually, and
Further, that all future exemptions be limited to a term of two years
and be examined by the Legislature upon their expiration on a case by
case basis to determine if they merit reauthorization or should be
eliminated or revised.
Sound area vanpools served four times more passengers for one-seventh the cost
of Sound Transit’s Sounder Commuter Rail. King County's vanpool program alone carries more riders than Sound Transit's entire commuter rail, and for $1 billion less.
a global recession and unemployment rates doubling to nearly 10 percent the
following year, passenger demand in the first quarter of 2009 grew to about 1.5
million trips, a 16 percent increase from the first quarter of 2008.
The Congressional Budget Office (CBO) scored the Senate Financial Committee health care reform bill this week. Never mind the fact the bill is only a summary and is not in legislative language, which made the CBO disclaim the cost of an actual final bill.
Total cost is reported at $829 billion with $81 billion in savings over the first ten years. Unfortunately, as published in a Micheal Cannon report for CATO, the cost would be closer to $2 trillion over the first ten years. So why the difference?
First, the CBO omitted $75 billion in new federal spending and $33 billion in unfunded mandates on state governments. Second, the nonpartisan CBO assumed Congress would allow the "sustainable growth rate" cuts in Medicare provider reimbursement starting in 2012. Congress has never let this happen. And finally, the CBO omitted the cost of the individual and employer mandates which represent 60% of the cost of Massachusetts' health care reform.
Therefore, to do the math: $829b + $75b + $33b = $937 billion (which is 40% of some number).
40% x N = $937 billion N = $937 billion divided by 0.4 = $2.34 trillion.
So the Baucus bill is not budget neutral, let alone a deficit reducer. Instead, it is a colossal budget breaker that has the potential of bankrupting this country in just the first decade of application.
Tim Eyman's initiative that would limit government spending could hurt Washington's credit rating, which would cost the state tens of millions of dollars, state Treasurer James McIntire says . . . McIntire said credit ratings consider numerous factors, including initiatives like Eyman's.
"They want to know how your economy is doing, they want to how your revenues are doing, they want to know what your balance sheet looks like...and they ask about things like initiatives," he said in an interview. "Any!
thing that restricts taxes or spending, that's going to have a long-term structural impact to come to resolution about financial management, is something that they worry about."
Credit raters like Moody's say "Voter initiative activity adds element of fiscal uncertainty,” and is a challenge for the state, but the adoption of a tax or spending restriction did not make Moody's list of things that would reduce the state's credit rating. According to Moody's July 10 report on Washington's credit outlook:
What would change the rating - UP
Sustained trend of structural budget balance, plus restoration and maintenance of strong reserve levels.
Economic expansion and improved industry diversification.
Reduction of debt ratios to levels closer to Moody's 50-state medians.
What could change the rating - DOWN
Deeper and longer recession that restrains consumer confidence, leading to prolonged revenue weakness and employment erosion.
Protracted structural budget imbalance.
Increased reliance on one-time budget solutions.
Cash flow narrowing, leading to strained liquidity.
Failure to adopt plan to cover expenditures once federal fiscal stimulus monies are no longer available.
Perhaps the reason adoption of a tax or spending restriction didn't make the list is the fact Washington already has both. In fact, the state's credit rating didn't drop after passage of I-601 (tax and spending restriction) in 1993 or I-960 (tax restriction) in 2007.
Based on the criteria described by Moody's, it looks like the biggest devil for the state’s credit rating will be whether or not the state lays out a plan for balancing the budget once the federal bailout funds are gone and stops resorting to one-time fixes.
average vanpool passenger traveling between Tacoma and Seattle would save about
28 percent in annual commuting costs compared to taking a bus, 45 percent compared
to taking Sounder Commuter Rail and 61 percent compared to driving a car.