Crist's Fiscal Mess? That's Understated

Sentinel columnist Mike Thomas's assertion on Sunday that Gov. Charlie Crist is leaving a fiscal mess for the next governor is an understatement. The examples he cites illustrate the dire straits the state is in — except, the it's worse.

Thomas omitted that Crist's insurance policies have placed the state one storm away from fiscal calamity.

Should Florida be hit by the right hurricane in the right place, residents will look upon today's economic hardships as "the good old days."

The Florida Hurricane Catastrophe Fund — a state agency — has assumed tremendous amounts of risk to keep insurance rates artificially low in high-risk coastal areas. Crist's 2007 insurance reforms required property insurers to purchase a certain amount of reinsurance (insurance for insurance companies) from the CAT Fund.

Unlike private reinsurers, the CAT Fund is not required to have the reserves necessary to pay claims. Instead, it relies on its ability to raise the money by selling bonds after a storm. If the CAT Fund finds itself broke after a storm and unable to sell enough bonds to cover claims, Florida would face an unprecedented situation where thousands of claims go unpaid, leaving hundreds of thousands of Floridians unable to rebuild their homes and businesses.

Expect a mass exodus from the state. The tax revenue loss would be incalculable, not to mention the emotional toll.

Luckily for Crist, he won't be governor.

Christian R. Cámara Director of Florida Insurance Project, The Heartland Institute