Transcript of "Ron Whitlock Reports" for April 26, 2009 from ronwhitlock.com Copyright © 2009 The Shepherd Group. * * * * >>Ron: HI. I'M YOUR HOST, RON WHITLOCK. WELCOME TO THE PROGRAM. A REPUBLICAN TEXAS STATE REPRESENTATIVE, JOHN SMITHEE, WHO LIVES IN AMARILLO, THERE IN THE CENTER OF THE HIGH PLAINS AGRIBUSINESS IN THE TEXAS PANHANDLE, HAS TAKEN ON A FRESHMAN DEMOCRAT TEXAS STATE REPRESENTATIVE, NAMED DOCTOR TARA RIOS YBARRA, WHO'S FROM SOUTH PADRE ISLAND, WHICH IS, BY THE WAY, THE FOURTH MOST POPULAR TOURIST DESTINATION IN THE ENTIRE LONE STAR STATE. NOW, WHY DOES THEIR SQUABBLE, BETWEEN THESE TWO STATE REPs, MATTER TO YOU REGARDLESS OF WHERE YOU MIGHT LIVE IN TEXAS? WELL, IT MATTERS BECAUSE JOHN SMITHEE IS A DRIVING FORCE AND IS DRIVING THE INSURANCE LEGISLATION NOW GOING THROUGH THE TEXAS LEGISLATURE WHICH COULD COST YOU YOUR JOB. YEP. COULD COST YOU YOUR JOB IN EITHER HIS FARMING AND RANCHING-DOMINATED DISTRICT, OR COULD COST YOU YOUR JOB ALONG THE TEXAS COAST, FROM BROWNSVILLE-SOUTH PADRE ISLAND NORTH TO THE LOUISIANA BORDER. NOW, WE HAVE IN THE STUDIO TO TRY TO MAKE A LITTLE BIT OF SENSE OF ALL THIS, TWO EXPERTS IN THE MATTER, ON THE MATTER. BOB SHEPARD. WELCOME BACK TO THE PROGRAM, BOB. BEEN A LONG TIME. >>Bob Shepard: THANK YOU. >>Ron: CHAIRMAN OF THE WINDSTORM TASK FORCE FOR THE INDEPENDENT INSURANCE AGENTS OF TEXAS. AND, COURTNEY HAYDEN. COURTNEY, WELCOME. >>Courtney Hayden: THANK YOU. >>Ron: ALDERMAN FOR SOUTH PADRE ISLAND'S TOWNSHIP. NOW, BOB, TRYING TO MAKE A LITTLE BIT OF SENSE TO THE AUDIENCE, WHO ARE THINKING, "HOW-, UH, WAIT A MINUTE. I'M LIVING IN THE PANHANDLE, AND WHAT DOES MY JOB IN THE PANHANDLE HAVE TO DO WITH MY JOB, OR MY BROTHER OR SISTER'S JOB, ALONG THE GULF COAST OF TEXAS? AND, HOW'S THAT INVOLVED WITH MY INSURANCE PREMIUMS AND HURRICANES?" >>Bob Shepard: RON, THE REASON THAT JOHN SMITHEE MATTERS IN THIS IS HE IS CHAIRMAN OF THE HOUSE INSURANCE COMMITTEE. HE'S BEEN THERE FOR MANY, MANY YEARS. >>Ron: NO SLOUCH. POWERFUL. >>Bob: UH, NO S-, NO SLOUCH AT ALL. UH, AND WHEN, EVEN WHEN WE HAD A NEW SPEAKER COME IN THIS LAST SESSION, UH, CHAIRMAN SMITHEE WAS REAPPOINTED CHAIR OF HOUSE INSURANCE. SO, THAT'S WHERE YOU HAVE TO START WITH. HE COULD BE FROM ANYWHERE, ALTHOUGH HE HAPPENS TO BE FROM AMARILLO, TEXAS, WHICH IS JUST ABOUT AS FAR AWAY FROM THE TEXAS GULF COAST AS YOU COULD POSSIBLY GET AND STILL RESIDE IN THE STATE OF TEXAS. >>Ron: HAVE TO BE POWERFUL, 'CAUSE HE WENT FROM ONE SPEAKER TO ANOTHER SPEAKER, AND THAT'S GOT TO SAY SOMETHING ABOUT HIS INFLUENCE. >>Bob: WELL, I THINK THAT'S PART OF IT. THE OTHER PART OF IT IS THE SUBJECT MATTER THAT YOU'RE DEALING WITH. UH, YOU KNOW, VERY CANDIDLY, THERE'RE NOT A WHOLE LOT OF PEOPLE AROUND THAT UNDERSTAND, UH, INSURANCE ISSUES. >>Ron: SO, WITH HIM BEING THE SPONSOR OF THE BILL, THAT MAKES IT EVEN MORE DANGEROUS FOR THOSE WHO ARE CONCERNED, THAT BEING THE COASTAL, UH, RESIDENTS, AND THOSE WHO LIVE LI-, LIKE YOU DO, COURTNEY, ON THE TEXAS GULF COAST, UH, WHERE THESE PREMIUMS COULD ESCALATE AS HIGH AS 60 PERCENT. AND, THAT CAN IMPACT ON YOU IF YOU HAVE A P-, A PIECE OF PROPERTY, UH, ON THE COAST, IF YOU GO TO THE COAST, YOU RENT PROPERTY AT THE COAST, ALL THOSE THINGS, YOUR BILLS ARE GONNA GO UP A L-, COMMENSURATE WITH THAT, UH, BY VIRTUE OF THE FACT THAT IF THIS PARTICULAR SMITHEE BILL GOES THROUGH AS HAS BEEN PROPOSED AT THE TEXAS LEGISLATURE, PREDOMINANTLY TO TRY AND GET MONEY BACK IN THE WINDSTORM FUND WHICH WAS DEPLETED DURING HURRICANE DOLLY AND HURRICANE IKE'S VISIT TO THE TEXAS COAST, AND THAT'S THE PRIMARY BO-, BOTTOM LINE PROBLEM. RIGHT, BOB? >>Bob: YES, THAT'S RIGHT. WHAT THEY'RE TRYING TO DO CURRENTLY IS RECHARGE, IF YOU WILL, THE RESERVE FUND, OK. IT HAS BEEN TOTALLY DEPLETED, AS YOU HAD MENTIONED, BY HURRICANE DOLLY AND HURRICANE IKE. SO, CHAIRMAN SMITHEE'S BILL, WHICH HE'S THE AUTHOR OF, BY THE WAY, HE FILED IT, UM, HI-, HIS IDEA IS, HERE IS, HE WANTS ALL OF THE COASTAL FOLKS THAT LIVE ON THE COAST TO RECHARGE THAT, UH, FUND. AND, SO, THAT'S WHERE YOU HEAR NUMBERS LIKE 20 PERCENT AND 40 PERCENT, UH, THAT OBVIOUSLY WOULD BE PRETTY ONEROUS ON THE BACKS OF, UH, OUR POLICYHOLDERS ALL IN ONE FELL SWOOP. >>Ron: NOW, COURTNEY, AS AN ALDER-, ALDERMAN FROM THE ISLAND OF SOUTH PADRE ISLAND, AND THAT TOWNSHIP, I MUST TELL YOU, I DIDN'T REALIZE WHEN I WAS GOING THROUGH THE EYE OF HURRICANE DOLLY AT THE BAHIA MAR, AND THROUGH THE EYE OF HURRICANE IKE IN GALVESTON, THAT AGAIN WE WERE GONNA BE TALKING ABOUT THESE TWO HURRICANES, THAT WE'RE GONNA CONTINUE TALKING ABOUT WHAT THESE HURRICANES DID TO TEXAS AND THE ECONOMY. DID YOU? >>Courtney Hayden: WELL, I CERTAINLY DIDN'T.. >>Ron: YOU THOUGHT GOING THROUGH ONE HURRICANE WOULD BE ENOUGH. >>Courtney: THAT'S RIGHT, AND WE ARE IN THE MIDDLE OF ANOTHER HURRICANE RIGHT NOW OF A TOTALLY DIFFERENT SORT. UH, THE TYPES OF INCREASES IN RATES THAT ARE BEING PROPOSED HAVE TREMENDOUS INCREASES IN RATES AND ALSO IN SURCHARGES. AND, ONE, I-, I AM, OF COURSE, VERY CONCERNED ABOUT EVERYBODY THAT LIVES ALONG THE COAST ANYWHERE IN TEXAS, HOW THEY ARE GONNA BE ABLE TO MANAGE THOSE RATES. I AM PARTICULARLY CONCERNED ABOUT THE SMALL BUSINESSES WHO WERE DEVASTATED LAST YEAR. WE LOST THE LAST PART OF OUR RESORT SEASON AND IT TOOK A LONG TIME FOR PEOPLE TO START COMING BACK. >>Ron: SO, YOU'RE CONCERNED IF THE LEGISLATURE DOES DO WHAT IT COULD BE DOING AT THIS PARTICULAR MOMENT, AND THAT IS RAISING EVERYONE'S INSURANCE RATES FOR THE WINDSTORM POOL, UH, TO THE NUMBERS OF UP TO 60 PERCENT OVER TIME, THAT THOSE BUSINESSES WHO WERE TRYING TO RECAPTURE AND REGENERATE, UH, AND TO TRY TO STAY IN BUSINESS ARE GONNA BE GOING OUT OF BUSINESS, AND, SO, SOUTH PADRE ISLAND AND OTHER COASTAL COMMUNITIES COULD BECOME GHOST TOWNS? >>Courtney: THAT'S EXACTLY RIGHT. AND, YOU KNOW, IT, IT GOES EVEN FARTHER THAN JUST THE SMALL BUSINESSES, CERTAINLY. BECAUSE, IF WE'RE LOOKING AT, IF WE HAVE TO LOOK AT INSURANCE RATES THAT GO UP 40 PERCENT OR MORE, THERE ARE GOING TO BE PEOPLE THAT JUST SIMPLY WILL NOT PAY THOSE RATES, OR CANNOT PAY THOSE RATES, WHICH WILL CAUSE THEM TO PUT THEIR HOMES ON THE MARKET, WHICH WILL CAUSE PROPERTY VALUES TO DECREASE BECAUSE WE'VE ALREADY GOT A PRETTY GOOD INVENTORY. WE HAVE AN ECONOMIC PROBLEM NAT-, NATIONWIDE, AND THIS WILL REALLY EXACERBATE THE PROBLEM ALONG THE COAST. >>Ron: SO, WE NOW WANT TO BRING YOU INTO WHAT WE DID A C-, A FEW-, A FEW DAYS BACK AT THE STATE CAPITOL WITH THOSE WHO ARE REALLY IN THE MIDDLE OF THIS FIGHT BETWEEN THE TWO STATE REPs, ONE FROM AMARILLO, ONE FROM SOUTH PADRE ISLAND. KEEP IN MIND, NOW, THAT ABOUT 40 PERCENT OF TEXAS JOBS ARE DIRECTLY TIED TO THE PRODUCTION CATEGORIES OF THOSE INDUSTRIES, PETROCHEMICAL AND OTHERS, ALONG THE GULF COAST OF TEXAS. NOW WE'RE GONNA GO TO THOSE INTERVIEWS AT THE STATE CAPITOL. >>Solomon Ortiz, Jr.: THIS IS ONE OF, UH, OUR MOST CRITICAL, UH, ISSUES FOR COASTAL RESIDENTS THIS SESSION. UH, YOU'RE GONNA SEE THIS DEBATE, UH, GET PRETTY HEATED AS THE WEEKS COME. IT IS NO SURPRISE, ESPECIALLY TO COASTAL RESIDENTS, THAT WE NEED AND MUST HAVE WINDSTORM INSURANCE REFORMS, TO MAKE SURE THAT WE COME UP WITH SOLUTIONS THAT ARE IN THE BEST INTERESTS, NOT ONLY OF OUR COASTAL RESIDENTS, BUT IN THE STATE AS A WHOLE. AND, THIS IS NOT JUST AN ISSUE, UH, FOR COASTAL HOMEOWNERS. THIS IS A STATEWIDE ECONOMIC ISSUE THAT WE, WE NEED TO MAKE SURE THOSE INDIVIDUALS REALIZE THAT IF SOME OF THE CHANGES THEY ARE PROPOSING GO INTO EFFECT, YOU'RE ESSENTIALLY, WILL KILL THE COAST ECONOMICALLY. >>Todd Hunter: THERE-, THERE'S NO DOUBT WE GOT TO DO SOMETHING TO BRING THE PRIVATE INSURANCE COMPANIES BACK, BECAUSE YOU'RE EXACTLY RIGHT, FLORIDA, TEXAS, WE'RE NOT GETTING ANY, UH, INSURANCE ON THE COASTLINE. SO, WE GOTTA DO SOMETHING. AND, ONE THING THAT WOULD BE GOOD IS, ONE, NOT ONLY IS THERE A DISINCENTIVE FOR NOT WRITING IN TEXAS, ARE THERE INCENTIVES TO KEEP 'EM IN OUR AREA? SO, YOU'RE ABSOLUTELY RIGHT. ONE IS, WHAT ARE THE INCENTIVES AND DISINCENTIVES FOR CARRIERS TO WRITE? BUT, THE OTHER THING IS, IS WHATEVER LAW IS PASSED, IT CANNOT PUNISH THE COAST IN SOUTH TEXAS. SOME OF THESE BILLS THAT ARE COMING OUT ARE SAYING THAT YOU CAN'T HAVE COVERAGE ABOVE A CERTAIN AMOUNT OF DOLLARS ON YOUR HOME, OR YOU CAN'T HAVE INSURANCE COVERAGE ABOVE A CERTAIN AMOUNT OF DOLLARS FOR YOUR BUILDINGS. WELL, THAT'S GEOGRAPHIC DISCRIMINATION, AND THAT'S SUCH TERRIBLE PUBLIC POLICY FOR THE STATE OF TEXAS, THAT YOU CAN PICK ON CERTAIN AREAS OF THE STATE AND NOT OTHERS. WE'RE ONE STATE. THE RISK SHOULD BE PLACED ON THE WHOLE STATE. UP TILL NOW, SOUTH TEXAS AND THE COASTLINE HAS NEVER ASKED FOR REPAYMENT, OR THAT THE OTHER AREAS OF THE STATE PAY THEM BACK FOR ALL THE DAMAGE THAT HAS OCCURRED OVER THE LAST MANY, MANY YEARS UP THERE. AND, YET, NOW THERE'S A TURNABOUT? YOU HAD SOME TOR-, YOU HAD SOME HURRICANES. NOW WE'RE SUPPOSED TO BEAR THE BRUNT? WE'RE SUPPOSED TO PAY THE FEE? IT SEEMS TO BE UNEQUAL. IT ALSO DOESN'T SEEM TO BE RIGHT. SO, MY VIEW IS, RATHER THAN TAKING A SHOT AT OTHER AREAS OF THE STATE, THE MESSAGE NEEDS TO BE SENT, YOU NEED OUR AREA. BUT WE NEVER COMPLAINED WHEN THEY HAD A RASH OF HAIL STORMS AND A RASH OF TORNADOES. >>Lloyd Neal: THE THING THAT WE'RE MOST CONCERNED ABOUT IS ANY ATTEMPT TO LAY THE BURDEN OF PAYING FOR ALL OF THIS EXPOSURE ON THE BACKS OF THE TEXAS SEA COAST CO-, RESIDENTS. WE DON'T THINK THAT'S FAIR. UH, WE'RE ASKING THE SENATE AND THE HOUSE HERE IN AUSTIN TO CONSIDER SOME FORMULA THAT SPREADS THIS COST ACROSS THE STATE OF TEXAS, BECAUSE EVERYONE BENEFITS FROM THE STATE OF TEXAS, IN THE STATE OF TEXAS, FROM OUR COASTAL INDUSTRY AND OUR COASTAL RESIDENTS. YOU CAN'T RUN FROM THE WEATHER IN TEXAS. WEATHER AFFECTS EVERY PART OF THIS STATE. IT'S TOO BIG. SO, WHEN YOU START TRYING TO PLACE AN UNREASONABLE FINANCIAL BURDEN ON A SMALL PART OF THE STATE, AND THAT, THAT BURDEN BECOMES UNMANAGEABLE, THEN YOU'RE PENALIZING NOT JUST THOSE WHO LIVE ON THE TEXAS COAST, BUT YOU'RE PENALIZING ALL OF US WHO HAVE INVESTMENTS AND OTHER THINGS ALL THE WAY UP AND DOWN TEXAS. AND, WE CAN'T STAND FOR THAT. >>Leon Loeb: WE'RE THE THIRD LARGEST INSURANCE MARKET IN THE NATION. AND, TO SAY THAT, UH, THE INSURANCE MARKET CAN'T HANDLE THE STORM RISK ALONG THE COAST WITHOUT, UH, COMPARTMENTALIZING THE STATE INTO, INTO TWO AREAS, UH, WITH TWO COMPLETELY DIFFERENT INSURANCE SCHEMES, IS JUST SILLY. UH, IT'S A RUSE BY THE INSURANCE COMPANIES TO TRY TO COLLECT MORE PREMIUM, AS IT, AS IT ALWAYS SEEMS TO BE WHEN INSURANCE BECOMES AN ISSUE IN THE LEGISLATURE. THIS DRAMATICALLY AFFECTS THE MOST OF US WHO DON'T LIVE IN MILLION DOLLAR WATERFRONT HOMES, UH, AS MOST OF THE POPULATION ON THE COAST DOESN'T. AND, YOU TAKE AWAY THEIR INCOME, YOU TAKE AWAY THE VALUE OF THEIR HOMES, PROPERTY BECOMES WORTH LESS IF PEOPLE DON'T HAVE AS MANY DOLLARS IN THEIR POCKET TO PAY PRINCIPAL AND INTEREST ON THEIR MORTGAGES, TAX REVENUES GO TO HELL, AND IT'S A CATASTROPHE. INSTEAD OF HAVING A CATASTROPHE ONCE IN A LIFETIME WITH A HURRICANE, WE CAN HAVE A CATASTROPHE EVERY YEAR WITH WINDSTORM RATES. >>Ron: OK. WE HEARD THAT SOLOMON ORTIZ SAYS IT COULD KILL THE COASTAL ECONOMY. RIGHT OR WRONG? >>Courtney Hayden: ABSOLUTELY. I-.. >>Ron: TOO STRONG? BOB? YOU'RE IN THE INSURANCE BUSINESS. >>Bob Shepard: WELL, THOSE ARE PRETTY STRONG WORDS, RON. I MEAN, IT-, IT CERTAINLY HAS THE ABILITY TO IMPACT IT GREATLY. UH, TEXAS IS A PRETTY STRONG STATE, SO I'M NOT WILLING TO SAY IT'S GONNA ABSOLUTELY KILL THE ECONOMY, BUT IT CERTAINLY HAS THE ABILITY TO CRIPPLE IT. >>Courtney Hayden: I CAN LIVE WITH THE WORD "CRIPPLE." UH, AND I CE-, I CERTAINLY SEE THAT HAPPENING IN THE RESORT AREAS ALL UP AND DOWN THE COAST. AFTER ALL, OUR BEACHES ARE THE PLAYGROUNDS FOR THE ENTIRE STATE OF TEXAS, AND WE HAVE PEOPLE OF ALL INCOME LEVELS WHO COME EVERY YEAR TO ENJOY THOSE BEACHES. AND, A-, AS I SAID BEFORE, ALL BUSINESSES ALONG THE COAST, CERTAINLY THOSE THAT ARE RELATED TO THE RESORT INDUSTRY, ARE STRUGGLING. >>Ron: AND, ESPECIALLY THOSE WHO DID HAVE THE EFFECTS OF DOLLY IN THE SOUTHERN END OF SOUTH PADRE ISLAND, THOSE THAT DID HAVE THE EFFECTS OF IKE TOWARD THE NORTHERN END TOWARD THE LOUISIANA BORDER, THOSE ARE MAYBE MARGINAL ALREADY. NOW, ON THE OTHER SIDE, IF YOU'RE LOOKING AT A, AT A REFINERY, AT THOSE, THEY'RE NOT GONNA NECESSARILY BE AS VULNERABLE TO ECONOMIC OBSOLESCENCE AS THE ONES YOU'RE TALKING ABOUT. WE'LL GET MORE INTO IT AS WE COME BACK. STAY TUNED. --------------------------------------------------------------------------- >>Ron: THANK YOU FOR STICKING WITH US. WHEN WE WENT TO A BREAK, WE HAD A LITTLE BIT OF AN ARGUMENT GOING ON BETWEEN OUR TWO GUESTS, BOB SHEPARD, CHAIRMAN OF THE WINDSTORM TASK FORCE FOR THE INDEPENDENT INSURANCE AGENTS OF TEXAS, AND COURTNEY HAYDEN, WHO'S AN ALDERMAN FROM THE SOUTH PADRE ISLAND TOWNSHIP OF SOUTH PADRE ISLAND, TEXAS. THE POINT OF DISCUSSION WAS, BOB, YOU WEREN'T WILLING TO SAY THAT THE, UH, WINDSTORM PROBLEM, IF THE, UH, INCREASED RATES FOR INSURANCE PREMIUMS GOT TO HIGHER LEVELS, IT WOULD BE, UH, DEVASTATING, OR KILL THE TEXAS COAST ECONOMY. COURTNEY WAS OF THE OPINION MAY-, OPINION THAT MAYBE IT WOULD, BUT ONLY IN CERTAIN PARTICULAR AREAS. NOW, AS WE LOOK AT HOW IMPORTANT THE TEXAS COAST IS TO THE OVERALL STATE ECONOMY, YOUR OWN AGENCY, THE INDEPENDENT INSURANCE AGENTS OF TEXAS, HAVE A GREAT EXECUTIVE SUMMARY, WHICH YOU CAN GET IT AT THEIR WEBSITE AND REFER TO, 40 PERCENT OF ALL TEXAS JOBS ACROSS THE ENTIRE STATE ARE TIED IN ONE WAY OR THE OTHER TO WHAT HAPPENS AT THE TEXAS COAST. IS THIS JUST AN, AN INDICATION OF WHAT'S HAPPENED TO OUR STATE AS WE HAVE MOVED THROUGH THE 50's AND 60's WHEN WE WERE TOTALLY AG ORIENTED AND NOW WE HAVE BECOME A 21st CENTURY WORLD SUPERPOWER AND WE HAVE ALL OF THIS INDUSTRY AT THE COAST? >>Bob Shepard: WELL, I THINK THAT'S PART OF IT, RON. >>Ron: IS THAT AN OVERSIMPLIFICATION? >>Bob: WELL, UH-, NO, I DON'T THINK IT'S AN OVERSIMPLIFICATION. UM, YOU KNOW, YOU, THE PETROCHEMICAL INDUSTRY IS VITALLY IMPORTANT NOT ONLY TO TEXAS, BUT TO THE UNITED STATES AND, AND TO THE WORLD. THE POINT HERE THAT I THINK NEEDS TO, TO BE MADE, THOSE OF US THAT LIVE ON THE COAST, OK, THIS IS NOT JUST A COASTAL ISSUE. YOU KNOW, WHY SHOULD IT-, IT, UH, MATTER TO SOMEBODY IN AMARILLO, TEXAS THAT WE SOLVE THIS PROBLEM? AND, THE REASON IT SHOULD MATTER IS THE FACT THAT WE DO PRODUCE AN INORDINATE AMOUNT OF THE G.N.P. OF THE STATE OF TEXAS ON F-, IN 14 COUNTIES. THE FIRST TIER IS WHAT WE'RE TALKING ABOUT HERE, OK. AND, IF WE SHOULD HAVE A DEVASTATING STORM, UH, THAT REALLY CRIPPLES US EVEN WORSE THAN, THAN DOLLY AND THAN IKE, YOU'RE GONNA SEE SALES TAX REVENUES GO DOWN, YOU'RE GONNA SEE THE GENERAL COFFERS OF THE STATE OF TEXAS BE DEPLETED. IF YOU LOOK AT IT, YOU'D GO FROM THE SOUTH, WHICH IS CAMERON COUNTY, ALL THE WAY UP TO THE BEAUMONT AREA, AND THERE'RE FOUR.. >>Ron: AND, YOU'VE GOT ALL THOSE SIX PORTS, ALL THOSE SIX MAJOR PORTS. >>Bob: YOU HAVE YOUR MAJOR PORTS IN, IN TEXAS THAT, THAT ARE ALL THERE. BUT, THE, BUT THE POINT THERE, RON, IS, HERE AGAIN I GO BACK TO WHY SHOULD IT MATTER TO PEOPLE IN AMARILLO AND WEST TEXAS AND CENTRAL TEXAS? I'LL GIVE YOU AN EXAMPLE. WE DON'T BUILD OUR UNIVERSITIES ON A REGIONAL BASIS, OK. WE DON'T BUILD OUR MEDICAL SCHOOLS ON A REGIONAL BASIS. WE DO THAT ON A STATE- WIDE BASIS, OK. IT SHOULD BE JUST IMPORTANT TO ANYBODY ELSE THAT LIVES OFF THE COAST TO HELP US SOLVE THIS PROBLEM BECAUSE IT TRULY IS PART OF THEIR PROBLEM. WHEN YOU START TALKING ABOUT THE DISTRIBUTION MODEL, AND GETTING THOSE PETROCHEMICAL DOLLARS AND PRODUCT, OK, THEY DON'T JUST GO TO HOUSTON, TEXAS.. [Laughs] ..THEY GO TO AUSTIN, THEY GO TO HORSESHOE BAY, THEY GO TO AMARILLO AS WELL, OK. >>Ron: AND, ALL THE ENERGY PRODUCED IN THE PANHANDLE, ALL THE CATTLE PRODUCED IN THE PANHANDLE WHICH MAY HAVE GONE UP THE CHISHOLM TRAIL CENTURIES AGO, NOW COMES TO THE TEXAS COAST AND GOES OUT ONE OF THE SIX PORTS. >>Bob: THAT'S EXACTLY RIGHT. >>Ron: COURTNEY, WHAT ABOUT YOU? >>Courtney Hayden: WELL, IF I COULD BE A LITTLE PROSAIC, TEXAS IS A PROUD STATE THAT'S ALWAYS TAKEN CARE OF IT'S OWN. AND, UNFORTUNATELY, WE'RE IN A SITUATION RIGHT NOW WHERE THERE SEEM TO BE AT LEAST A FEW PEOPLE IN AUSTIN WHO FEEL THAT WE SHOULD BE PUNISHED FOR HAVING CHOSEN TO LIVE ON THE COAST, TO WORK ON THE COAST, AND TO ALLOW HURRICANES TO HAPPEN TO US. AT A TIME THAT WE ARE THE MOST VULNERABLE, THAT WE HAVE HAD THE BIGGEST PROBLEMS THAT MOST OF US HAVE FINANCIALLY SEEN IN MANY, MANY YEARS AS A RESULT OF THOSE HURRICANES, NOW WE'RE FACED WITH DEVASTATINGLY HIGH INCREASES IN OUR WINDSTORM INSURANCE. YOU CAN'T HAVE A HOUSE WITHOUT WINDSTORM INSURANCE, A-, ASSUMING YOU HAVE A MORTGAGE. YOUR MORTGAGE COMPANY'S NOT GONNA LET YOU HAVE A HOUSE WITHOUT WINDSTORM INSURANCE. AND, YOU KNOW, ONE OTHER THING, UH, THERE IS A PROPOSAL IN AT LEAST ONE OF THESE BILLS FOR AN ADDITIONAL 20 PERCENT SURCHARGE OVER THE NEXT TWO YEARS FOR SECOND HOMES. IF YOU LIVE SOMEWHERE ELSE IN TEXAS, IF YOU LIVE SOMEWHERE ELSE IN THE WORLD, BUT IF YOU LIVE SOMEWHERE ELSE IN TEXAS AND YOU OWN PROPERTY ON THE COAST AS A VACATION HOME.. >>Ron: AMARILLO, FOR EXAMPLE. >>Courtney: ..FOR EXAMPLE, YOU ARE GOING TO BE ASKED, POSSIBLY, SHOULD THESE BILLS PASS, YOU WOULD BE ASKED TO PAY A 20 PERCENT SURCHARGE THAT WE'RE ALL GOING TO BE ASKED TO PAY, PLUS ANOTHER 20 PERCENT SURCHARGE BECAUSE THIS IS YOUR SECOND HOME. AND, THAT SURCHARGE WOULD LAST FOR AT LEAST TWO YEARS. NOW, ALL OF THAT IS ON TOP OF INCREASED RATES. NOW, YOU KNOW, ONE THING THAT MIGHT HAPPEN, AND I HATE TO EVEN PUT THIS IDEA IN PEOPLE'S HEADS, BUT, IF I WERE LOOKING AT THIS HUGE INCREASE ON MY SECOND HOME, ALL OF A SUDDEN I MIGHT DECIDE TO DECLARE THAT MY SECOND HOME ON THE COAST IS MY HOMESTEAD, WHICH WOULD MAKE IT MY PRIMARY RESIDENCE, AND GO BACK AND CALL MY VACATION HOME THE ONE THAT'S BACK.. >>Ron & Courtney: IN AMARILLO. >>Courtney: EXACTLY. AND, THAT'S NOT GOING TO BE GOOD FOR THE COAST EITHER, BECAUSE WE ALL KNOW THERE ARE EXEMPTIONS ON PROPERTY TAXES ON YOUR HOMESTEAD. THERE'S A PERCENTAGE OF PROPERTY TAX THAT'S, THAT, UH, YOU DON'T HAVE TO PAY IF IT'S YOUR HOMESTEAD. SO, THIS IS JUST, BESIDES BUSINESSES PERHAPS NOT COLLECTING THE SALES TAX THEY'VE BEEN HISTORICALLY COLLECTING AND SENDING IN TO THE STATE FOR EVERYONE'S BENEFIT, UH, WE COULD HAVE A REAL PROBLEM LOCALLY WITH OUR PROPERTY TAX. >>Ron: IT'S INTERESTING WHEN YOU GET INTO THIS IS GONNA HAPPEN TO ME, WHAT'S GONNA HAPPEN TO YOU? AND, IT'S, IT'S NOT, IT'S NO LONGER, "WE, TEXANS," IT'S Y'ALL IN, IN THE PANHANDLE AND WE AT THE COAST, OR WE AT THE COAST AND Y'ALL AT THE PANHANDLE. AND, THAT'S WHAT, BASICALLY WHAT TODD HUNTER WAS REFERRING TO IN WE'RE CREATING A, A DISPARITY, A DISCRIMINATION BETWEEN ONE STATE OVER THE OTHER. WE'LL BE BACK IN A MOMENT. DON'T TOUCH THAT DIAL. STAY TUNED. --------------------------------------------------------------------------- >>Ron: THANK YOU FOR STICKING WITH US. YOUR HOST, RON WHITLOCK. IN THE STUDIO WITH US, BOB SHEPARD, CHAIRMAN OF THE WINDSTORM TASK FORCE FOR THE INDEPENDENT INSURANCE AGENTS OF TEXAS, AND COURTNEY HAYDEN, WHO'S AN ALDERPERSON, ALDERMAN WITH THE SOUTH PADRE ISLAND, TEXAS TOWNSHIP. FORTY- FOUR PERCENT OF THE STATE OF TEXAS' TOTAL INCOME IS LINKED TO KEY GULF COAST SECTORS. YOU HEARD IT. IF YOU HAVE A JOB IN TEXAS, 44 PERCENT OF THE INCOME FOR THAT JOB IS DERIVED SOME WAY OR ANOTHER BECAUSE THE GULF COAST EXISTS IN ITS CURRENT ECONOMIC CONFIGURATION. THAT BY VIRTUE OF PETROCHEMICAL, THEN DIESEL FUEL THAT GOES OUT TO THE HIGH PLAINS AGRIBUSINESS, JET FUEL TO DALLAS-BASED AIRLINES, UH, TOURISM THAT COMES IN. IF PEOPLE WERE COMING TO THE LONE STAR STATE, THEY'RE GONNA WANT TO GO, BY VIRTUE OF THE NUMBERS, TO THE ALAMO, TO THE RIVER WALK, NUMBER FOUR ON THAT FOUR-LEGGED STOOL, SOUTH PADRE ISLAND, TEXAS. YOU KNOCK OUT THAT FOURTH LEG OF THAT FOUR-LEGGED STOOL, SOUTH PADRE ISLAND, THE WHOLE STATE TOURISM ECONOMY, 62 BILLION DOLLARS, IS GOING TO BE ECONOMICALLY ADVERSELY IMPACTED. WE TALKED TO AN ECONOMIST IN THAT PARTICULAR REGARD, MOSTAFA MALKI, U.T.B., UH, ECONOMIST. HERE'S WHAT HE HAD TO SAY ABOUT IT. >> PROFESSOR MALKI, YOU UNDERSTAND A LITTLE BIT ABOUT THE WINDSTORM PROBLEM AND THE WINDSTORM POOL. WHAT KIND OF PROBLEMS COULD THIS PROVIDE TO THE ECONOMY OF THE COASTAL AREA OF TEXAS? >>Mostafa Malki: WHEN YOU LOOK AT THE BILL, AND HOW THEY WANT TO TAKE SOME MONEY THAT'S GOING INTO INSURING, YOU KNOW, COASTAL PROPERTIES, TH-, THEY ARE, THEY ARE LOOKING AT, UH, JUST-, UH-, PART OF THE PICTURE. BECAUSE, YOU HAVE A-, A MULTIPLIER EFFECT. YOU ONLY SEE WHAT'S VISIBLE, THE DIRECT IMPACT. YOU DON'T SEE THE, THE CONTRIBUTION THAT THIS SIDE OF THE, UH, OF THE STATE IS CONTRIBUTING TO THE WHOLE ECONOMY. SO, IF YOU ARE SAVING A DOLLAR HERE, YOU MAY BE LOSING $1.50 SOMEWHERE ELSE. THAT'S DIRECTLY, UH, YOU KNOW, BEING IMPACTED. SO, SOMETHING THAT SOUNDS LIKE A GOODIA, IDEA AT FIRST, NEEDS TO BE STUDIED FURTHER TO SEE, YOU KNOW, WHAT IMPACT IT WOULD HAVE. ALOT OF THINGS THAT SOUND GOOD ON PAPER, ONCE YOU ANALYZE THEM, YOU REALIZE THAT THEY'RE NOT THAT GOOD OF A, OF A DEAL FOR, FOR THE STATE OVERALL. >>Ron: SO, WE HAVE AN ECONOMIST EXPLAIN THAT IT'S LIKE A RIPPLE EFFECT. >>Courtney Hayden: MM HM. >>Ron: YOU MESS WITH THE GULF COAST ECONOMY, ALL THE WAY FROM BROWNSVILLE- SOUTH PADRE ISLAND TO THE LOUISIANA BORDER, GOLDEN TRIANGLE, THAT'S GONNA AFFECT THE ENTIRE STATE ECONOMY FROM ONE END TO THE OTHER. >>Courtney: ALL OF THOSE FOLKS THAT YOU WERE, ALL THOSE BUSINESSES YOU WERE TALKING ABOUT, WITH THE REFINERIES, AND THE PORTS THEMSELVES, HAVE PEOPLE WHO WORK IN THEM. AND, NOT ALL OF THOSE PEOPLE ARE PARTICULARLY WEALTHY PEOPLE. AND, TO STRAIN THEIR BUDGETS TO THE TUNE OF 40 PERCENT HIGHER INSURANCE RATES, WHICH, ACTUALLY, IS 40 PERCENT HIGHER ON THEIR WINDSTORM RATE, PLUS, WE DON'T KNOW EXACTLY HOW MUCH, THREE PERCENT ON ALL OF THEIR OTHER PROPERTY AND CASUALTY RATES, WHICH I WOULD LET BOB TALK ABOUT.. >>Bob Shepard: [Laughs] >>Courtney Hayden: ..BECAUSE HE'S THE THE INSURANCE GUY. BUT, WE'RE, WE'RE TALKING ABOUT JUST A HUGE, HUGE ECONOMIC IMPACT. >>Ron: HERE AT A TIME WHERE WE'RE IN A RECESSION NATIONALLY, TEXAS IS NOT AS IMPACTED ON AS THE REST OF THE, OF THE NATION, BUT IT COULD BE JUST WITH A PURE, SIMPLE INSURANCE BILL. WHAT'S THE SOLUTION, BOB? >>Bob Shepard: WELL, I THINK THERE ARE SOME SOLUTIONS OUT THERE, RON. THE INDEPENDENT INSURANCE AGENTS OF, OF TEXAS HAVE, FOR QUITE SOME TIME, HAVE WORKED BEHIND THE SCENES TO TRY TO HELP RESOLVE AN, AN ISSUE. IF YOU TAKE A NORMAL YEAR, LIKE WE'VE HAD FOR MANY, MANY YEARS, LAST YEAR WAS THE EXCEPTION, IS, UH, YOU CAN PAY FOR RE-INSURANCE OUT OF WHAT THE TWIA POLICYHOLDERS ALREADY PAY IN CURRENTLY TODAY. >>Ron: TEXAS WINDSTORM. >>Bob: AND, THAT'S THE TEXAS WINDSTORM INSURANCE ASSOCIATION. THAT'S WHERE PEOPLE HAVE TO GO TO BUY THEIR WIND-, WINDSTORM INSURANCE COVERAGE, UH, TODAY. SO, IF WE GET BY WITH THAT, YOU DON'T NEED TO HAVE A BIG SURCHARGE RIGHT NOW. UH, BECAUSE, YOU KNOW, THIS IS ANOTHER FORM OF TAX, IF, IF YOU LOOK AT IT. YOU, YOU MIGHT THINK IT SOUNDS CRAZY COMING FROM SOMEBODY THAT SELLS INSURANCE, AND SAY, "WELL, DON'T YOU WANT TO SEE, YOU KNOW, YOUR REVENUE GO UP?" MY ARGUMENT IS TOTALLY DIFFERENT. I WANT TO SEE THE ECONOMY EXPAND, OK, AND THEN ALL INSURANCE AGENTS WILL GET THEIR FAIR SHARE OF IT, OK. YOU, YOU DON'T WANT TO LOOK AT IT FROM A BA-, BIGGER PIECE OF A SMALLER PIE. I DON'T BELIEVE THEY NEED, AT THIS POINT IN TIME, TO COLLECT THAT MINIMUM PREMIUM, WHICH IS NOT MINIMUM TO THOSE OF US WHO LIVE ON THE COAST, IT'S ABOUT 150 MILLION DOLLARS. UH, IF, IF THEY WILL, IN EFFECT, NOT DO THAT, GET ABOUT 250 MILLION FROM THE COMPANIES, OK, AND THEN THEY CAN GET SOME BONDS AND BUY RE-INSURANCE, I THINK WE'LL BE ON OUR WAY TO SOLVING THIS PROBLEM. >>Ron: WE'LL BE BACK WITH A WRAP-UP IN A MOMENT. --------------------------------------------------------------------------- >>Ron: WELCOME BACK TO OUR WRAP-UP SEGMENT. WE'RE NOW GONNA GO TO COURTNEY HAYDEN, ALDERMAN, SOUTH PADRE ISLAND TOWNSHIP. SHE'S GOT ONE LAST THING SHE'D LIKE YOU TO CONSIDER AND CONTEMPLATE AS YOU THINK ABOUT WHAT WE'VE TOLD YOU HERE ON THE PROGRAM TODAY. >>Courtney Hayden: I JUST WANT TO BE SURE THAT EVERYBODY DOES REALIZE THAT THIS IS EXTREMELY IMPORTANT TO ALL OF US. AND, IF YOU OWN PROPERTY ON THE COAST, OR YOU KNOW SOMEONE FROM ANOTHER PART OF THE STATE WHO OWNS PROPERTY ON THE COAST, NOW IS THE TIME TO ASK THEM, FOR YOU YOURSELF TO TAKE ACTION, AND FOR YOU TO ASK YOUR FRIENDS TO CONTACT OTHER REPRESENTATIVES AND SENATORS IN AUSTIN TO TELL THEM ABOUT YOUR CONCERNS. OUR COASTAL REPRESENTATIVES ARE DOING ALL THEY CAN FOR US. SO, WE APPRECIATE THEIR WORK. BUT, WE NEED TO LET FOLKS KNOW ALL OVER THE STATE THAT THIS IS A HUGE PROBLEM FOR THE ENTIRE STATE. >>Bob Shepard: I'VE BEEN INVOLVED IN, UH, ISSUES LIKE THIS F-, SINCE THE, UH, 70's, AND I'VE NEVER SEEN AN ISSUE BOIL TO THE FOREFRONT LIKE I HAVE THE WINDSTORM BILL. SO, I THINK THAT'S A GOOD THING. PEOPLE ARE BECOMING INFORMED ABOUT THE ISSUE. UH, THEY ARE GOING TO AUSTIN ALL UP AND DOWN THE STATE. YOU'VE GOT TO STAY ENGAGED IN THE PROCESS. THIS THING DOESN'T END UNTIL JUNE. IT'S NOT OVER, OVER TILL IT'S OVER. SO, MAKE YOUR VOICE HEARD. >>Ron: IN PARTICULAR, STATE SENATOR EDDIE LUCIO, JUNIOR SAYS, IN REGARDS TO SENATE BILL NUMBER 14, HE SAYS, "QUITE FRANKLY, THIS BILL PITS ONE AREA OF THE STATE AGAINST ANOTHER." AND, THAT, IN PARTICULAR, "THIS BILL USES LARGE SURCHARGES TO SHIFT THE MAJORITY OF THE BURDEN OF PAYMENT FROM THE WINDSTORM INSURANCE FUND FROM A STATEWIDE POLICY TO COASTAL AREA POLICYHOLDERS." AND, THAT'S NOT FAIR. THAT'S ACCORDING TO SENATOR EDDIE LUCIO. THANK YOU FOR JOINING US. TO FOLLOW UP ON THIS AND STAY, UH, IN VERSE OF IT, GO TO WWW.RONWHITLOCK.COM TO WATCH THIS PROGRAM 24/7, OR ANY OTHER UPDATES THAT WE THINK YOU MIGHT NEED TO BE AWARE OF. TILL NEXT TIME. ADIOS.