Jim Beam column: Is insurance our No. 1 problem?

Gov. Jeff Landry and the Republican-dominated state Legislature have taken the first steps to do away with state income taxes, which they say will bring new industry, businesses and people to Louisiana. Unfortunately, there is a monumental property insurance problem that is driving people out of the state.

Marilyn Landiak of New Orleans in a Dec. 2 letter to The Advocate said, "People are leaving Louisiana because sky-high homeowners and flood insurance rates make mortgages and rents unaffordable."

Landiak listed some other reasons why people are leaving the state, but state income taxes didn't make her list. In fact, she said they aren't a major problem.

Census data, she said, shows only 15 states have a lower total tax burden than Louisiana, when property, sales, consumer, corporate and other taxes are tabulated. She added that four of the six states, including Texas, without an income tax have a higher per capita total tax burden than Louisiana.

As she said, the high cost of property insurance could be the No. 1 reason people are leaving Louisiana.

Sam Karlin, a reporter for The Times-Picayune | The Advocate, in a series of detailed stories on the insurance problem said there are some solutions, but there are problems there as well.

"The bad news is that many of these (solutions) are also expensive, and current levels of investment don't match the scale of the crisis," Karlin said. "Some help will come too late for the coastal residents who are already barely hanging on. More structural reforms, like federal disaster insurance changes, could help but are politically difficult."

Tim Temple, the state's commissioner of insurance, has been trying since he took office earlier this year to get the governor and Legislature to call a special session on insurance, but it hasn't happened.

My home and flood insurance premiums have gone up, but that hasn't been a major problem for me. However, let's look at some of the people Karlin interviewed for his series.

Tamika Jackson, a former New Orleans resident now living in Atlanta, moved to New Orleans from New York City a decade ago. She loved living in New Orleans but insurance costs helped drive her away.

Karlin said Jackson faced a home insurance bill that rose from $3,000 a year to $10,000. He added that dozens of residents in hurricane-and-flood-prone south Louisiana said in interviews that climate change and insurance costs have them worried about the long-term sustainability of staying.

Dan Stein, the longtime owner of Stein's Deli in New Orleans, told Karlin rent for the deli rose 30% this year, in large part because insurance costs hammered the landlord.

Stein's mortgage payment for his house rose by $1,400 a month for the same reason. His employees say rents are rising, so their wages don't go as far. Stein also sees other businesses closing "at a greater clip."

The state has devoted $45 million to help people put fortified roofs on their homes, but Stein said commercial businesses don't get assistance.

Dawn Voisin bought and renovated a small shopping center in Houma hit by Hurricane Ida and she said she faced an insurance bill that was more than her business makes in a year.

A parish planner in Houma is on a quest to build hurricane-proof homes using stronger steel beams for foundations. LSU researchers are studying new ways to fight wind and flood risk.

The U.S. Army Corps of Engineers is elevating homes in Calcasieu, Cameron and Vermilion parishes. Setting and enforcing stronger building codes also keeps homeowners safer from storms.

Despite all of those things, Karlin said the cost and complexity of potential solutions make solving the insurance crisis a difficult riddle. With one exception, he said local and national political leaders have been largely unwilling to tell constituents in the riskiest areas of the state that they need to move.

Premiums for flood insurance are out of sight and Congress is reluctant to do anything about that. Climate change is also making hurricanes more intense, flooding more severe and causing insurers to pull back from areas like south Louisiana.

Karlin said Louisiana may be the most vulnerable state in America. And he added that so far, state officials haven't dedicated the kind of funding needed to fortify a critical mass of homes.

Jim Beam, the retired editor of the American Press, has covered people and politics for more than six decades. Contact him at 337-515-8871 or jim.beam.press@gmail.com.

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