The result: more than 10% of Texas drivers now have outstanding warrants, and the number of drivers without licenses has climbed continuously since the law's passage. The Houston Chronicle had a story yesterday ("Texas drivers aren't paying violation surcharges," Sept. 3) which revealed that unpaid surcharges from the program more than double the amount of revenue generated:
• Revenue billed: $887.8 millionHow's that for government efficiency? The vast majority of offenders assessed the surcharge (>1.6 million) committed the offense of driving without insurance, usually because they could not afford it. So how does charging them $250 extra for the next three years, on top of the cost of the ticket, make it possible to afford insurance in the future?
• Revenue collected: $288.5 million
• Unpaid surcharges: $599.3 million
To me, that's the obvious reason for failure of the program: We're punishing what's often a crime of poverty - failure to purchase car insurance - with substantial fines that make purchasing insurance in the future less likely. How much are we talking about per driver? Including the surcharges, reported the Chron, "Driving without insurance could cost $1,303 over three years. A DWI conviction with surcharges could cost up to $6,603."
So let's say you're a newly hired Texas prison guard with a starting salary of $22,000 per year, or a little over $1,800 per month - how in the world could you afford this extra hit on top of the cost of the ticket?
What a terrible public policy: The Driver Responsibility surcharge increases the number of uninsured drivers, unlicensed drivers, and the number of Texans with arrest warrants. House Law Enforcement Chairman Joe Driver sees these outcomes as evidence the law should be "tweaked," but if you ask me the results show why the program should be scrapped.
The only benefit to the state from the fee is to generate revenue from a source that politicians can say didn't come from taxes (the money divides equally between hospital trauma care and paying for the Trans-Texas Corridor). But a 30% collection rate makes the program look like a joke - the public perception created by hundreds of thousands of people flouting the law discredits the government more than the extra money bolsters it.
The Chron piece promoted Tamara Shippy's online petition against the surcharge, quoting the college junior from Friendswood declaring, "It's unreasonable ... It's unfair. It's just mind-boggling. It seems too cruel to actually exist."
Shippy has spoken out boldly against the Driver Responsibility program in recent weeks and has already signed up nearly 400 people who oppose the surcharge. No organization in the state that I know of has mobilized to oppose the law, so I'm glad to see her step up to take leadership. Grits encourages readers to sign her petition, if you haven't already, forward the link to your friends, and also contact your state representative and senator to tell them the surcharge should be repealed.
The reason the law requires car insurance is because the insurance racket lobbied the law into being, not because the public wanted it.
ReplyDeleteBanks lobbied to get laws to make homebuyers carry insurance -- in order to reduce the risks to the banks carrying mortgages.
Other than those two, no other activity by law requires insurance.
The right way to go here is to stop making the people subsidize the insurance racket. Make car insurance wholly voluntary, so those who can afford it can afford it, and those who can't can't. The market will determine the eventual prices, and who will buy what products. People would be better off saving for a rainy day, so to speak, then being compelled to give their money away to the insurance company.
It would also help if the courts began regarding insurance policies as contracts, so that a company refusing to pay a valid claim would see fines and imprisonment -- which would hugely sober the insurance racket.
Whether it be infant car seats, motorcycle helmets, or liability car insurance, there is no doubt that if you want to inflate the price of something to the point of being ridiculous, then just pass a law requiring it. What's even more ridiculous regarding liability car insurance is that even though the law requires it, only about one out of six Texas driver's actually has it. So, guess who gets to foot the bill for all those accident prone people driving without insurance?
ReplyDeleteSteve, I agree with your overall economic point about price gouging on govt-required products, but what's your source for saying only 1 in 6 drivers have insurance? According to this source, only 15-20% of TX drivers are uninsured, though that's still a huge portion in a state with 23 million people. best,
ReplyDeleteAnd the penalty for truancy is expulsion.
ReplyDeleteI noticed your source (the Chronicle) was referring to "vehicles" not being insured. Mine were based upon unoffical numbers regarding uninsured "drivers." However, my numbers are from insurance companies, and are at least 10 years old, so mine might not be that reliable. Who knows, maybe liability insurance enforcement is really working. However, my next question would be whether or not these sources also take into consideration the number of uninsured illegal aliens behind the wheel in this state. How do you count those drivers?
ReplyDeleteWell, a one in five no insurance rate isn't exactly "working" - that's probably like 2-3 million uninsured drivers, and I'm pretty sure those numbers include undocumented immigrants - they're just comparing the number or registered cars to the number of insured ones, I think. best,
ReplyDeleteWell, I agree that even one in five having no liability insurance isn't working, either. However, I think there would be a large difference between the number of insured vehicles vs the number of insured drivers. And, if I am thinking correctly, it's not a requirement of the law to carry liability insurance on the "vehicle." Rather, it's a requirement for the driver to have liability insurance. Although my vehicles are listed on my family policy, my personal auto insurance is in my name, and it doesn't matter whose car I drive (even a rent car) my insurance is still in force.
ReplyDeleteAnd, I do think the number of illegal immigrants who drive would be extremely hard to count with any accuracy because a great many of them are "invisible" for lack of a better term, and they drive around with stolen, fake, or no drivers licenses whatsoever. How do you count people that you can't identify? As such, I would think few, if any, of these people are insured.
Hmmm.. Maybe I should call my insurance carrier and pose these questions to them. I bet their response would be interesting.
Until later,
Can you say "another poor penalty"? Yes, poor people pay more for basic necessities than the wealthy in all but the small number of items subsidized by our "social welfare state". When you add in late fees and bank surcharges it can be astronomical. Then there is interest on credit cards that don't get paid off each month. It really adds up. It costs you extra to not have money in this society. And every tax break designed for working people - unlike those for the wealthy - are NOT indexed for inflation. The same working couple gets the same child care credit that was enacted in 1986.
ReplyDeleteLee's not forget that if you have DL and don't possess a car, you are still responsible for maintaining car insurance. This proof must be presented upon DL renewal. Also, according to Fox 4 in DFW, Texas is "close" to completing the new insurance registry that will allow the police to have "up to the minute" insurance verification for Texas drivers. I believe they estimate next year as a implemntation time.
ReplyDeleteI can only imagine what that will be like...a lazy data clerk or clumbsy insurance agent "forgets" or "accidentally" mis-keys your policy number or payment. Then, I'm sure the cite and summons will be out the window and paying customers may land in jail due to a "clerical error." I just can't wait for this one. I am going to carry my payment receipt along with my proof of insurance...maybe that will help!
The fines imposed by the TX DRP are excessive and the legislative intent is corrupt. The DRP was designed to make up for the leg. lack of funds for the Trans TX corridor/NAFTA projects.
ReplyDeleteAlso, they told everyone voting that the funds were going to the Trauma care centers. Then they make it nearly impossible for these facilities to meet eligibility requirements to receive any of the money, and cut the funds in half so that they can put $ in the General Revenue Fund. From there, it goes to the Transportation fund, which funds the TTC. Other legislation states that all of our resources go to assisting (in whatever way) and contributing to the progression of NAFTA projects, including the TTC.
Also, there are many other underlying issue that are responsible for increasing costs in Trauma centers. Not to mention the fact that they already said Tort reform legislation (which was passed) would help with medical costs.
Basically, they exploited recent statistics (Tx high number of alcohol related traffic incidents) so that they could sell their agenda to create funds for the TTC/Tolls/Transportation Dep.
The law also stated that it was aimed at habitual violators. If you are a habitually drinking and driving, then you are most likely an Alcoholic. Devastating them (or any one for that matter) financially so that they may even lose their job, will not help with their drinking. If the state was really concerned they would call for more rehabilitation requirements, or breathalyser ignitions requirements.
Also, facts such as the size of Texas and the amount of rural areas (esp. without city lighting), as well as the lack of mass transit systems within Tx as a whole or it's cities, all contribute to our states figures regarding alcohol and driving.
Studies show that suspending otherwise law abiding citizens from driving, negatively impacts the economy as well.
I do believe that if information such as where to locate someone is not available within various departments, it could potentially enable those wishing to harm our nation by assisting them in evading our security systems and knowledge.
If you live in NY or Chicago, you could actually survive/thrive and not drive. You would also not have to pay for car insurance. I think that it's a shame that in Texas, you really do not have that option. Metro doesn't go beyond city limits, and the costs of Taxis are outrageous.
What's more is there is a severe lack of sidewalks in and around Houston. Sidewalks are a part of our basic infrastructure and surprisingly there are very few that even lead from neighborhoods to the closest shopping/working areas.
http://www.youtube.com/watch?v=XnWo2Wwn50s
Perhaps the unprecedented, excessive fines that the DRP imposes, or the fact that you are manipulated into paying an arm and a leg to drive, would be less of an issue if you really could use alternative means to travel.
~Tamara
Years ago, I was a traffic officer who wrote tickets for things like speeding in a school zone, running red lights, running stop signs, accidents, speeding, no TDL, and no proof of financial liability (you aren't required to have "insurance", just the means to pay for an accident that gives a wide range of items that'll work). The idea of the surcharges was to shift from using taxes to fines for funding certain things; largely because people are upset at paying too much in taxes.
ReplyDeleteIf someone doesn't have a TDL and got caught, they'd have the further burden of paying the surcharge in order to get one just as those charged with failure to maintain financial responsibility would be tagged for that. I've studied the issue and surrounding issues a bit over the years and have come to the conclusion that if insurance was voluntary, those of us paying for it would be paying a LOT more for uninsured/under insured coverage (as well as other forms of financial protection). It stands to reason that as fewer people assume greater financial risk, the net effect is the costs go up.
Granted, there are social equity issues at stake here too but everyone in Texas without a license is arguably unable to buy insurance (try buying insurance from a reputable company without a license and see what they say). If you don't maintain insurance or other form of coverage, you won't be able to keep a car registered, a TDL, or get your car inspected either; the lack of valid stickers inviting officers to crash your party every time you hit the streets.
Keep in mind that to get the insurance law passed, the companies were forced to submit to the additional scrutiny of state regulation where the commissioners tell the companies how much they can make; not an ideal situation for a business that faces huge cyclical losses as well as shareholders demanding a ROI. The trauma center funding aspect is a plus considering how many millions of dollars go to medical care for the indigent already, the taxpayer always being the one picking up the tab for the care. If you don't mind subsidizing every jerk on the road that would rather buy the latest movie, have nicer clothing, drink his extra money away (look at the number of liquor stores in poor areas before telling me that "they can't afford it since they're too poor"), and all the other niceties of life; so be it. In the bigger picture, not buying insurance or a TDL is just another choice that people make that impacts the rest of us.
I'm not saying the surcharge is necessarily the best way to go with the idea but the law isn't making people break the law or go without a TDL/Ins; that's what got them into trouble. They could get work or live on a bus line like many other hard working Texans, cut their other expenses, set up a payment program, or figure another way out of their troubles like the rest of us do but they fall back on option #1 first; not paying and not obtaining what the rest of us get.
Oh, and for the record, Steve's numbers might be from way before the State required ins/PFR because those numbers are not my experience and I saw a whole lot of people in my time serving the public. Still, it's a good discussion to have even though I think the general idea of "blame the big bad government or insurance companies" is a mistake. :)
Many people who fall into the DRP are law abiding citizens who do pay their insurance or have maintained an updated license before. They are not habitual offenders. They are hardworking citizens who use their income strictly to pay for rent, electricity, water, health insurance, car insurance, home insurance, flood insurance, medical bills, gas, car maintenance/repair, food/groceries, school supplies, etc. If they fall behind on a payment for car insurance and then face a surcharge that is non-disputable, then the situation snowballs.
ReplyDeleteAlso, in TEXAS, relying on public transportation is extremely unrealistic.
If the Government isn't going to enforce the border then none of this house of cards is going to stand. The whole system needs to be simplified back to basics: DL with minimal requirments, no insurance.
ReplyDeleteThey've sold the idea that driving is a privilege, not a right. They are wrong.