As a reformist Republican, I wish I could support Florida Governor Charlie Crist in his campaign for United States Senate. On the surface, he shares my values. After all, he has a measure of genuine concern about the environment, seems willing to deemphasize polarizing go-nowhere social issues (despite his own basically conservative views on them), and, faced with a decline in state revenues, made some difficult cuts in his state’s budget. A close look at his record, however, reveals something a little more important: he’s a terrible governor given to populist excess.
Crist’s failures all stem to what’s certainly his most important legislative accomplishment; a massive property insurance reform that he rammed through the legislature soon after taking office. The reform, passed just days after his oath of office, attempted to keep prices lower for hurricane-prone Florida homeowners through a system of subsidies for individuals and businesses. Under Crist’s original plan, homeowners unable to find “affordable” property insurance in the private market could buy coverage from a state agency called the Florida Citizens Property Insurance Corporation, insurers received government subsidized reinsurance (insurance for insurance companies) to keep them in the market, and poorer residents living in coastal areas got modest help to retrofit their homes.
The plan hasn’t worked. On one hand, Florida residents still pay over $1,500 a year on average for property insurance while the promised retrofitting help for lower-income residents (the most sensible part of the program) was eliminated at the first sign of a budget shortfall. Large household name insurers have essentially stopped trying to do new business in Florida while many small upstarts with shaky finances have moved in. On the other hand, the state has taken on massive contingent liabilities. The Hurricane Catastrophe Fund that subsidizes insurance companies has about $4 billion in hard assets to pay claims that could easily top $25 billion in a bad storm season.
Because of Crist’s other major policy achievement, furthermore, the state would have no way to pay these if a storm hits. Shortly after he took office as governor, Crist convinced voters to approve a series of revisions to the state’s property tax capping scheme. Most importantly, the revisions made existing property tax caps “portable” so that individuals with capped taxes who moved within the state would continue to pay taxes at a lower rate. This portability along with a number of other changes to the system both makes the overall system deeply unfair–wealthy senior citizens in big houses can pay less in taxes than single-parent families in small ones in the same neighborhood–and make localities more reliant on state revenue to fund public schools and core services. In addition, it almost insures that future governments will have to hike other taxes (sales taxes in particular) and perhaps even convince voters to approve the income tax that Florida currently lacks. By sharply limiting the states’ biggest source of revenue, the new tax caps might require Florida to seek some type of bankruptcy-like protection following a major storm.
Together, these two measures—property insurance socialism combined with tax caps—reveal a split-personality populist governing style. Crist has literally mortgaged his state with two short-sighted measures that have nothing in common besides their ability to attract votes. It’s not a good record to run on. Charlie Crist simply isn’t fit to serve in the Senate.