Red Clay Citizen

Tony Rand -- Champion of the Free Market?

Earlier today, the General Assembly's Joint Study Committee on Automobile Insurance Modernization met to consider a proposal to change the way every North Carolinian purchases auto insurance.  Currently, those of us who have clean driving records pay a surcharge of 2.7% to fund a risk pool of those who make insurance claims.  Thus, us safe drivers are subsidizing bad drivers to the tune of $139 million this year.  (In some years, it's more, some years it's less).

Sen. Tony Rand as chairman of the committee asked if that was fair for safe drivers to pay higher rates for auto insurance and shouldn't we just let everyone be judged on their relative risk?  "Everybody should pay their own way. I should pay mine and not subsidize everybody else.  We should have some relative expectation that you (bad drivers) pay some fair share of the pool." 
Basically, his proposal would take one giant step towards deregulating and dramatically increasing competition in the auto insurance market.  (Some government insurance actuary stood up and argued that increased competition would increase rates -- I haven't figured that one out yet.)

Naturally, Insurance Commissioner Jim Long was opposed to the proposal. 

Will this proposal have legs when the General Assembly reconvenes in a few weeks?  I don't know, but it's one we'll sure be watching. 

And if we can apply free market economics to auto insurance, can't we also apply it to other insurance markets -- health, homeowners, etc.?

Taxpayer-Funded Lobbying for New Taxes?

AFP is pretty upset, as they should be.

Reverse supplanting of funds?

The more you read these budget bills, the more little golden nuggets you can find.

Included in the Senate budget is $37.5 million in recurring funds for "class size reduction" to maintain the 18:1 student/teacher ratio in grades K-3.

But wait, I thought the North Carolina "Education" Lottery was supposed to cover that cost.  Apparently, since all of us didn't buy enough lottery tickets, the Senate decided we should be on the hook for the money anyway.

Now, we can debate studies about whether class size reduction has any effect on student performance, (I tend to think it is more of a jobs program for the Teachers' Union), but everyone should be in agreement now that the lottery funding formula absolutely must be changed.

This is what happens when the lottery - a non-recurring, variable source of income - is used to pay for recurring expenses (teachers' salaries and students).  When too few people play the lottery, the rest of us get stuck with the bill.