Residents of the coast are celebrating the passage of a bill that undoes much of the damage of the Biggert-Waters Act.

But the celebration should be modest. This was a victory in a political tug of war. No one has found a solution to the problems facing the National Flood Insurance Program.

Anyone who lives on the coast knows The Biggert-Waters Act, the Flood Insurance Reform Act of 2012, is devastating. The act was designed to get the federal flood insurance program, which is about $25 billion in debt, close to paying for itself. That meant catastrophically higher rates, which meant trouble for real estate markets all along the coast.

There’s some irony in any pursuit of fiscal responsibility that requires Congress to lay waste to the most productive economic regions of the country.

The U.S. House of Representatives responded with legislation that would undo most of the harm. The House took that action despite a lot of talk about the importance of letting the market prevail and getting the government out of the insurance business.

The bill that passed the House on Tuesday night would eliminate provisions to raise premiums to the full risk level when a property is sold. It also would eliminate some provisions that would raise premiums dramatically in four to five years. It would not, however, do much about that $24 billion problem, which is a lot of pain to spread around.

For coastal dwellers, the problem with flood insurance is much like the problem with windstorm insurance.

People in other parts of the state want coastal residents to pay more of the cost of coverage, overlooking the fact that the state’s petrochemical industry — and the statewide economy that is based on it — is concentrated on the coast, largely because oil tankers cannot possibly visit places like West Texas and the Panhandle.

There are higher costs of doing business on the coast, and representatives of inland communities have done a good job of making the case that those costs should be paid by people on the coast.

However, when it comes time to enjoy the revenue spun off from those coastal industries, tax revenue leaves those coastal communities and is spread around the state. As an example, just look at the millions of dollars the Texas City school district bails up each year and sends off through the state’s Robin Hood system for financing public schools.

It’s a neat trick, that argument that the expenses should be contained on the coast while revenue should be shared.

What the Texas Coast is missing is a delegation that can make those points in finding a reasonable compromise to the real problems with the National Flood Insurance Program. The arguments about subsidies and free markets don’t get us close.

 • Heber Taylor

(3) comments

Steve Fouga

Hands-down my favorite Heber Taylor editorial ever.

Great job of summing up the situation, Mr Taylor!

Miceal O'Laochdha

Good grief, I am in full concert with Mr. Taylor's views. A Red Letter Day!

One thought to follow on one of Heber's points about the provincialism of those residing in other parts of Texas. It is not entirely true that oil and chemical tankers cannot call at Amarillo or Van Horn. If the folks in the distant parts of our good state would not mind paying the costs out of their local pockets for building ship channels to their parts of the state, and compensating product and ship owners for the differential of lost time on 10 day transits to their new ports, then I think when that is completed, and the new petrochemical complexes are built and operational, then we should consider paying higher property insurance costs here on the coast.

Which State (or even US) Representative or Senator from Dallas will be first to propose this solution to high cost of coastal insurance?

GW Cornelius


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