La. Governor Waiting on Special Session for Insurance Relief

Louisiana Gov. Kathleen Blanco said she has delayed calling a special legislative session on insurance relief because she is waiting to hear if the state will attract the major manufacturers it is courting, in deals that also would require legislative action.

Blanco said Oct. 17 that she intends to call the Louisiana Legislature into a special session, likely before the end of the year, but she said any of the manufacturing deals also would require infrastructure dollars that would need to be addressed in a special session.

“What I’ve been trying to avoid is having two special sessions,” Blanco said when questioned by reporters.

Republican lawmakers are circulating a petition for the Legislature to call itself into a 15-day session beginning Nov. 8. They want the session to include a bailout for the state-run property insurance company, the Louisiana Citizens Property Insurance Corp., which is financially strapped after last year’s hurricanes, and a restructuring of the state’s hurricane recovery authority and reconstruction plans.

The governor can call a special session at any time, but for lawmakers to call themselves into session, they need a majority of lawmakers in both the House and Senate to agree.

Blanco said she will call a special session to deal with the Citizens problem, but that an early November session would be too soon to find out if the state will land any of the five “megaprojects” it is seeking and what type of economic development incentives would be required.

A “megaproject” is a large plant or facility that brings in a significant number of jobs. The governor said her administration is working on deals to attract several such large manufacturers – deals that she said could bring new companies to an area along Interstate 20 in north Louisiana and to the parishes along the Mississippi River in south Louisiana.

The governor wouldn’t provide details on the companies with which the state is negotiating, but she said she hopes one or two of the manufacturing deals will be complete this year. She said arrangements to provide road improvements and other infrastructure items as part of any deals would be included in the special session she will call.

“I’m convinced if we have a special session early, we’ll have to have another one before the year is out,” she said.

Weeks ago, Blanco had said a special session wouldn’t necessarily be needed to cope with Citizens, but that was before continued pressure from other state officials and from legislators to help Citizens pay down $1 billion in borrowing it did to pay off claims after the hurricanes.

The company, which was established by the state to offer property insurance to those who can’t get it on the open market, is assessing private insurance companies a regular fee they can pass onto all Louisiana property insurance holders to pay off Citizens’ borrowing. If Citizens’ debt is paid down, homeowners and businesses would face smaller insurance hikes.

The Blanco administration and her top legislative allies, Senate President Don Hines and House Speaker Joe Salter, also have continued to say a special session shouldn’t be called until the state’s money picture – specifically the size of a state surplus – becomes more clear. Estimates of the surplus from state economists are expected this week, and a revenue estimating panel is expected to formally recognize the money for spending by early December.

Republicans say they will know enough about the expectations of the surplus by the time a November special session would begin and that the state’s property owners need insurance relief quickly.

The GOP petition drive will be tough, however. Blanco is working to squash the Republican efforts, and Republicans are in the minority in both chambers, making it difficult to get the votes needed.