Keller's office has been working with the Office of the Superintendent
But Insurance Superintendent
The state levies a 3 percent tax on insurance premiums collected by companies that cover everything from home and property insurance to title policies and health. More than half of the
Lawmakers met in a special session this fall to cut spending by about 5 percent throughout state government, including public education. Revenues are off again for the current budget year, with estimates showing the general fund will fall short by another
Reserve funds are largely depleted, and a major bond-rating agency has already put the state on a credit watch, which will increase borrowing costs.
Collecting the back tax money has been a priority for lawmakers and state economists. Keller said Wednesday his office has authorized the special audit and will work with the insurance office to develop procedures.
He also asked that the
A nominating committee, a majority of which has ties to the insurance industry, appointed the insurance superintendent to a five-year term. Lawmakers have questioned whether Franchini can properly police tax collections if he is hired and fired by insurance executives.
Franchini claims that is not a factor in this dispute. He said he has been working to collect what is owed to taxpayers. But lawmakers questioned that claim after he wrote a letter to Attorney General
At a hearing last week, some lawmakers wondered if that letter would make collection of unpaid taxes more difficult. Franchini has since withdrawn that letter and said he is committed to working with Keller and the
"My office remains committed to improving the agency and all of its procedures," he said in a statement.
While lawmakers hoped to use some of the back taxes to fend off the prospect of more spending cuts in January, the disagreement makes it unlikely that any of the money would be paid to the state before summer.
"We're trying to come up with a process that minimizes the risk of litigation with respect to collection," Keller said. "If we have a sound rationale, I'm hoping this can be wrapped up by the summer."
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