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SmarterSafer letter on federal flood standards

April 23, 2015, 7:00 AM

To Whom It May Concern:

SmarterSafer, a coalition of environmental organizations, taxpayer advocates, insurance representatives, housing and mitigation groups is pleased to submit comments on the Federal Flood Risk Management Standards. SmarterSafer supports the adoption of standards designed to protect taxpayer investments when federal funds are used in flood hazard areas and looks forward to working with the Administration as the standards are implemented.

Natural disasters wreak havoc on communities and their residents. The scale and cost of natural disasters has been on the rise; so too has the federal share of disaster costs and the amount the federal government spends to clean up and rebuild after a disaster strikes. Unfortunately, while the federal spending post-disaster has dramatically increased over the last few decades, spending on proven, pre-disaster planning and mitigation still falls woefully short of what is needed to better protect people and their property. We know that mitigation, and smarter safer building protects facilities and people and their property. For every one dollar spent on disaster mitigation, four dollars are saved on post-disaster recovery and rebuilding. Investing in strengthening communities today is cost-effective and proven to reduce damage and resulting costs post-disaster.

The Federal Flood Risk Management Standards seek to better protect people from harmful flooding in areas that face flood risks. By establishing standards that incorporate the best science on flooding, and requiring federal funds only be used to build at safe elevations, not only are people and property better protected, but federal investments are protected for the long-run. When federal funds are being used to build or rebuild structures or to subsidize structures, the government should ensure the taxpayer investments are being made in safe, resilient ways.

The Federal Flood Risk Management Standards, coupled with a renewed focus on mitigation, including nature-based approaches, could help protect taxpayers’ investments from having to be spent to repair that facility again in the next event. SmarterSafer, supports the adoption of these standards, however, we urge you consider flexibility in application of the standard to ensure that communities can best prepare for changing requirements. In addition, it is critical that implementation take into account the increased cost on low-income communities and low-income families, if these standards are applied to affordable housing programs and funding.

Thank you for considering our comments,

SmarterSafer

MEMBERS

Environmental Organizations

American Rivers
Center for Climate and Energy Solutions (C2ES)
Ceres
ConservAmerica
Defenders of Wildlife
Natural Resources Defense Council
National Wildlife Federation
Sierra Club
The Nature Conservancy

Consumer and Taxpayer Advocates
Coalition to Reduce Spending
R Street
National Taxpayers Union
Taxpayers for Common Sense
Taxpayers Protection Alliance

Insurer Interests
Allianz of America
Association of Bermuda Insurers and Reinsurers
The Chubb Corporation
Liberty Mutual Group
National Association of Mutual Insurance Companies (NAMIC)
National Flood Determination Association
Reinsurance Association of America
SwissRe
USAA

Mitigation Interests
Natural Hazard Mitigation Association
National Fire Protection Association

Housing
National Housing Conference
National Leased Housing Association

ALLIED ORGANIZATIONS
American Consumer Institute
Association of State Floodplain Managers
Center for Clean Air Policy
Friends of the Earth
Institute for Liberty
Property Casualty Insurers Association of America
Union of Concerned Scientists
Zurich

Whether they like it or hate it, conservatives must look to California

April 22, 2015, 2:11 PM

The State of California is fun to mock, easy to condemn and, particularly for many conservatives and libertarians, simple to write off. A little perspective from outside the state is an excellent reminder of just how far off it has been written.

Last week, on a flight to Arkansas from Los Angeles, I was seated next to a young woman with a southern-fried accent as thick as the region’s famously stifling midsummer humidity. She was pleasant to chat with. However, her regional charm faltered when I asked her what she thought of her time in the Golden State.

Rolling her eyes and assuming a sober expression, she quickly ran through this list: “It’s too expensive, needlessly thirsty, often broke and always preachy.”  

Her critical evaluation of California, amusing at the time for the intensity of its delivery, neatly summarized the case against the prevailing statist governing philosophy in Sacramento. Sadly, she was correct.

The high cost of living; the increasingly desperate water situation; the state’s mercurial budget; and its ever-present sense of a social mission are all products of that portion of the California electorate that pines to impose fairness and give order to the world, from the top down.

Unsurprisingly, no conservative red-stater and certainly no conservative southerner, wants any part of the California experiment. In fact, there is always glee when California’s shortcomings and problems make news. And yet, California should not be abandoned by conservatives from other parts of the country.

While the state is rife with the fringy left, more conservatives live in California than in any other state. While that’s a largely pointless statistic from a local political perspective, it underscores the larger idea that the national voice of conservatism is incomplete without California conservatives.

That voice will be significant because, though California conservatives long have been politically marginalized within their own state, they are better-positioned than any other subset of the movement to develop a policy-driven vision for a sustainable national right-wing coalition. For example, how better to deal with national issues regarding water diversion, high-speed rail and carbon taxes than by seeking the counsel of California conservatives?

What’s more, California is coping with an increasingly strained infrastructure brought about by years of political shifting of dedicated funds and unmanageable obligations to public employees with outsized political clout. This fate awaits the rest of the nation, and given its unfortunate precociousness, California may be where conservatives will write their policy playbook for the next 20 years.

In short, while California conservatives are outnumbered, don’t think that they are naïve or unproductive.

Toward the end of my flight, I asked the woman if she would ever willingly come back to California.

Of course,” she said. “I live in San Jose.”

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Why disaster policy matters

April 22, 2015, 12:09 PM

A major plot point of the most recent season of Netflix’s House of Cards saw fictional President Frank Underwood try to exploit the Stafford Act’s vague definition of a “disaster” to divert the Federal Emergency Management Agency’s entire budget toward an equally ill-defined job-placement and wage-support program called “America Works.”

This being Hollywood, the plan was, of course, absolutely ridiculous and would spark congressional lawsuits – if not, indeed, impeachment proceedings – should any real-life president ever attempt something similar. But kudos to the show’s producers for shining a light on the little-known Stafford Act. America Works would be a terrible idea, but the notion that American disaster-response policy needs a major overhaul is not.

Originally passed in 1974 to provide a rational process for appropriating federal disaster-response funds, replacing the largely ad hoc responses that previously had been the norm, use of the Stafford Act has exploded in recent years. The number of federal disaster declarations spiked from 16 in 1988 to 242 in 2011. Moreover, as a new report from the SmarterSafer Coalition shows, with each new catastrophe, the proportion of the cost of recovery borne by federal taxpayers continues to grow.

This is not a coincidence. The more the federal government spends on cleaning up disasters after the fact, the more businesses and individuals are encouraged to build in, and move to, disaster-prone areas. The vicious cycle continues as more and more risk is transferred from the private sector onto the backs of taxpayers.

The facts are incontrovertible. Research by Erwann Michel-Kerjan at the Wharton School’s Risk Management and Decision Processes Center shows pretty definitively that federal disaster assistance crowds out private insurance coverage. In an April 2014 paper, Michel-Kerjan estimates that residents in zip codes that receive significant disaster aid subsequently reduce their insurance coverage by an average of $17,000. Individuals who receive direct assistance from the federal government drop about $6,400 in coverage for every $1,000 in aid they receive.

The Stafford Act, which leaves the federal government on the hook for 75 percent of the cost of post-disaster aid, isn’t the only problem. The U.S. Forest Service has seen the percentage of its budget devoted to managing fires shoot up from 13 percent in 1991 to 40 percent in 2012, as the overall federal bill for wildfire maintenance has grown from $440 million in 1985 to $1.7 billion in 2013. The National Flood Insurance Program, which makes use of outdated flood maps and charges inappropriately low rates for older and frequently flooded properties, is now $23 billion in debt to federal taxpayers, with virtually no prospect to ever pay off that debt.

Even leaving aside the potential impacts of climate change, current disaster policy undoubtedly has contributed to what was already a massive shift in settlement patterns toward disaster-prone areas. The 1990s and 2000s saw 2.2 million new housing units built in coastal regions, with roughly a third of the U.S. population now living in low-lying, flood-prone areas along the coast. In the West, housing units in “wild-and-urban” interface regions have grown 52 percent since 1970, with 1.2 million of those homes at high risk of wildfires.

Clearly, these trends are unsustainable. At the current rate of growth, federal disaster spending through programs like the NFIP and Federal Crop Insurance Corp. is expected to grow by between 54 and 110 percent by the end of the century. The U.S. Department of Agriculture projects the number of acres burned by wildfires each year to double by 2050. Taking into account both current spending and settlement patterns, and rising sea levels, by 2100, areas deemed to lie in floodplains could grow by 45 percent for rivers and 55 percent for coastal areas; flood damages could reach $360 billion and hurricane damages could reach $422 billion.

These aren’t just the paranoid Chicken Little fantasies of the environmental left. They are the hard-nosed, dollars-and-cents calculations of the global insurance industry, which as of 2012 found itself on the hook for $10.6 trillion of U.S. coastal property, up 20 percent from $8.9 trillion just five years earlier. And with a huge and growing portion of these costs actually borne by taxpayers, they should be a serious concern to anyone who considers himself or herself a fiscal conservative.

It is that overlap of concerns, from elements that might ordinarily be considered “strange bedfellows,” that explains the genesis of SmarterSafer, of which R Street (originally in our previous incarnation as the Heartland Institute’s Center on Finance, Insurance and Real Estate) is a founding member. Our new report, “Bracing for the Storm,” represents the final product of nearly a year of deliberations and debate among our 30 very disparate members – everyone from environmental organizations like American Rivers and the National Wildlife Federation to budget watchdogs like Taxpayers for Common Sense and the National Taxpayers Union to major insurers and reinsurers like Allianz, Chubb, Liberty Mutual, Swiss Re and USAA.

The report contains a number of detailed recommendations, but they all come down to the two basic themes of removing federal subsidies for risk-taking and shifting federal investments to mitigating the risk of disasters before they happen, rather than merely responding to them after they occur. As the following chart makes clear, this is the precise opposite of federal spending priorities today.

Beyond that general focus, the report also calls for three crucial reforms:

  1. Tie the federal share of disaster-response spending to concrete mitigation and preparedness benchmarks, so that communities that better prepare receive more post-disaster aid and communities that don’t receive less.
  2. Shift more flood risk back to the private insurance market, phasing in accurate rates for the National Flood Insurance Program and reserving subsidies solely for those who can’t afford insurance premiums.
  3. Create a central, high-level federal office dedicated to coordinating among multiple levels of government resources that go toward disaster preparedness, rather than simply disaster response.

One hopes that’s an agenda that proves much more palatable to our real-life lawmakers than America Works did in Frank Underwood’s fictional Washington.

This work is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

Patent coalition says TROL Act doesn’t go far enough

April 22, 2015, 8:51 AM

Dear Chairmen and Ranking Members:

We, the co-chairs of United for Patent Reform, on behalf of the coalition members represented below, acknowledge and appreciate the efforts of the Energy and Commerce Committee to mitigate the devastating impact that patent trolls – and specifically demand letters – cause the American economy.

Unfortunately, the discussion draft of the Targeting Rogue and Opaque Letters Act (“TROL Act”) falls short of addressing the urgent need for strengthened enforcement of demand letter abuse. We support the goal of reducing the number of bad faith demand letters that our businesses receive, but this bill falls short.

The drain on commerce and innovation that vague, misleading or deceptive letters have on businesses across many sectors of the economy is well understood, and we have encouraged the subcommittee to make changes to the draft legislation that would help alleviate the problem.

Regrettably, none of the changes many of us sought to the 2014 draft have been adopted. We once again encourage the committee to make the following changes.

  1. Remove the requirement of a “pattern of practice of sending” demand letters. The pattern of practice language creates unnecessary ambiguity about the number of letters that constitute a pattern of practice.
  2. Remove the definition of “bad faith.”  Regardless of the intention of the sender, misrepresentations or omissions can be harmful to consumers.
  3. Remove separate “bad faith” requirement from listed factors. Requiring a demonstration of bad faith could nullify the act’s provisions.
  4. Separate third-party licensees and prior knowledge of infringement from factor 1, which requires a separate showing that assertions were made without a reasonable basis in fact or law.
  5. All demand letters should identify the allegedly infringed claims. Failure to include such information is evidence that the assertion is objectively baseless and thus made in bad faith.
  6. Remove affirmative defense.

We acknowledge and appreciate the attempts of Chairman Upton, Chairman Burgess and all the subcommittee members to address the devastating impact that patent trolls and specifically demand letter abuse cause the economy, but regret that the current legislative product does not alleviate those concerns.

We hope that the subcommittee will revise the draft legislation and see fit to address our concerns, but as currently written, we must oppose the TROL Act.

Is Alabama broke or just stupid?

April 22, 2015, 8:17 AM

This may be difficult, but let’s start with the facts about Alabama’s current budget crisis before we start talking about our feelings on things like taxes, gambling and expanding Medicaid.

In March, the Legislative Fiscal Office briefed the Alabama Legislature on the state’s fiscal situation. The major takeaway was that the state’s General Fund faced a $290 million projected shortfall and the state’s Education Trust Fund anticipated a $287 million surplus.

In short, if we did not have two separate major budgets, we would not have a budget crisis. We would be able to simultaneously fund education in Alabama and our other government obligations.

That means we’re not broke.

If you want to argue about the funding level for education being insufficient, feel free. That’s not the issue we’re talking about. On a purely budgetary level, we should have the money we need.

We have known all along that our state budget structure is causing the vast majority of our budgetary issues. Almost all of the taxes that recover with the economy are earmarked for the ETF. That leaves the General Fund threadbare, while trying to deal with prison infrastructure issues and Medicaid.

It is not a secret, yet most of our political leaders are not even trying to solve the structural problem they all see. To Gov. Robert Bentley’s credit, he has tried to move growth revenues into the General Fund, but he has done little to promote that effort.

The truth is that the state’s politicians are scared to death of being accused of taking money from students and teachers.

It is a silly political game that was perfected by the Alabama Education Association (AEA) under Paul Hubbert’s reign. Any politician even suggesting that we should consolidate our budgets and remove earmarks faced the wrath of the state’s most powerful political machine.

To Hubbert’s credit, he was so effective that many of Alabama’s more senior legislators have a version of Stockholm syndrome, where those past political realities still hold sway.

The funny thing about it is that education spending isn’t really tied to the budget structure. We can spend the same, more or less on education within a consolidated budget. The argument that combining the budgets necessarily means less money for education simply doesn’t hold water. Voters would still be able to hold legislators accountable for their education-spending choices.

But that doesn’t seem to matter to Alabama’s political leaders.

Rather than repairing the actual problem, Alabama’s legislators are likely going to give the people a choice between some combination of tax increases, significant government cuts or legalizing gambling in the state. That will only put a short-term bandage on the General Fund until the next time we run short on funds because of our goofy budget structure.

No, we’re not broke; we’re just either too stupid or too unwilling to solve the real problems we face.

Coalition tells Congress to let the Export-Import Bank expire

April 22, 2015, 7:49 AM

Dear Members of Congress:

On behalf of our groups and organizations, together representing millions of Americans, we urge you to oppose the reauthorization of the Export-Import Bank. It unfairly hurts domestic companies and risks billions of taxpayer dollars.

By paying foreign companies to buy American exports, the Export-Import Bank tilts the playing field away from mid-sized and small businesses in favor of large, politically connected corporations. The Airlines for America, for example, estimates that the bank’s recent loans to foreign airlines have killed as many as 7,500 jobs for domestic airlines in the United States. Eliminating the Export-Import Bank would level the playing field and allow U.S. companies to compete for business on their merits rather than the strength of their political ties to the bank.

Not only does the Export-Import bank interfere with the free market, it also jeopardizes billions of taxpayer dollars. According to a 2014 report from the Congressional Budget Office the bank will costs taxpayers $2 billion over the next decade despite claims that it pays for itself. This discrepancy is because the bank does not use fair-value accounting, a method widely used by private finance organizations. These risky loans and poor accounting practices are harmful to taxpayers, who are left footing the bill.

America deserves an international trade policy that is based on free-market mechanisms, not paying foreign companies to buy exports from large corporations with political connections. We, the undersigned organizations, urge you to oppose reauthorizing the Export-Import Bank.

Sincerely,

Brent Gardner, Vice President of Government Affairs
Americans for Prosperity

Marc Short, President
Freedom Partners

Jim Martin, Chairman
60 Plus Association

Susan A. Carleson, Chairman/CEO
American Civil Rights Union

Phil Kerpen, President
American Commitment

Dan Schneider, Executive Director
American Conservative Union

Sean Noble, President
American Encore

Thomas J. Pyle, President
American Energy Alliance

Coley Jackson, President
Americans for Competitive Enterprise

Peter J. Thomas, Chairman
Americans for Constitutional Liberty

Richard Manning, President
Americans for Limited Government

Grover Norquist, President
Americans for Tax Reform

Scot Mussi, President
Arizona Free Enterprise Club

John Tate, President
Campaign For Liberty

Kristin Fecteau, Co-Founder
Campaign to Free America

Tina Pisenti, Executive VP and COO
Cascade Policy Institute

David McIntosh, President
Club for Growth

Tom Brinkman Jr., Chairman
Coalition Opposed to Additional Spending and Taxes (COAST)

Lawson Bader, President
Competitive Enterprise Institute

Pete Hegseth, CEO
Concerned Veterans for America

Chris Prandoni, Interim Executive Director
Cost of Government Center

Thomas A. Schatz, President
Council for Citizens Against Government Waste

L. Brent Bozell III, Chairman
ForAmerica

Matt Kibbe, President and Founder
FreedomWorks

Evan Feinberg, President
Generation Opportunity

Michael Scupin, Vice President
Georgia Grassroots Coalition

Michael A. Needham, Chief Executive Officer
Heritage Action for America

Mario H. Lopez, President
Hispanic Leadership Fund

Kimberly Fletcher, President & Founder
HomeMakers for America Inc.

Carrie Lukas, Managing Director
Independent Women’s Forum

Heather Higgens, President and CEO
Independent Women’s Voice

Andrew Langer, President
Institute for Liberty

Seton Motley, President
Less Government

Colin A. Hanna, President
Let Freedom Ring

Dee Hodges, President
Maryland Taxpayers Association

Amy Ridenour, Chairman
National Center for Public Policy Research

Lew Uhler, President
National Tax Limitation Committee

Pete Sepp, President
National Taxpayers Union

Gov. Gary Johnson, Honorary Chairman
Our America Initiative

Kimberly Wold, Executive Director
Prosper

Andrew Moylan, Executive Director and Senior Fellow
R Street Institute

Mike Stenhouse, CEO
Rhode Island Center for Freedom and Prosperity

Paul Gessing, President
Rio Grande Foundation

William Whipple III, President
Secure America’s Future Economy

Teri Christoph, Director of Digital Media
Tami Nantz, Co-founder
Smart Girl Politics

Stephen Ellis, Vice President
Taxpayers for Common Sense

David Williams, President
Taxpayers Protection Alliance

Judson Phillips, Founder
Tea Party Nation

Brett Healy, President
The John K. MacIver Institute for Public Policy

Daniel Garza, Executive Director
The LIBRE Initiative

Morton Blackwell, Chairman
The Weyrich Lunch

Carl Bearden, Executive Director
United for Missouri

Rose Bogaert, Chair
Wayne County Taxpayers Association

Bracing for the storm

April 21, 2015, 4:19 PM

The attached report was co-authored jointly by members of the SmarterSafer Coalition.

Hurricanes, floods, fires, and heat waves resulting in millions of dollars of damage are no longer unusual events. They are now a fact of life, posing increased risk to life and property while driving up the costs of recovery. Both catastrophic and smaller-scale floods have been on the rise in communities throughout the country. The Western wildfire season has grown longer as warmer temperatures and longer periods of drought have become more common, and tropical storms and hurricanes have brought catastrophic damage to the U.S. over the past two decades. Disasters with a price tag exceeding $1 billion, previously limited to one or two per year, now occur at least five to 10 times per year. Recent payouts for events like Superstorm Sandy have shattered previous records, taking a toll both on the federal budget and on the National Flood Insurance Program, which is now more than $23 billion in debt.

As the frequency, severity, and cost of these disasters grows and federal spending on recovery rises, individuals, communities, and state and local governments must do everything possible to ensure they can withstand the next storm.

Our current natural disaster policy framework focuses heavily on responding to disasters, rather than putting protective measures in place to reduce our vulnerability and limit a disaster’s impact. This needlessly exposes Americans to greater risks to life and property and results in much higher costs to the federal government.

Over the past few decades, the financial burden of disaster response has fallen increasingly on the federal government. Federal funds are provided post-disaster, with few standards to define the parameters for federal intervention or rules to ensure funds are used in an efficient way. The problem is also evident in the chaotic passage of aid following a disaster, which often results in significant new outlays that have little to do with emergency relief.

Neither the states nor the federal government devote sufficient resources to preparing communities and citizens for these growing risks. The ready availability of government aid after a disaster actually reduces individual and community incentives to invest in mitigation and makes it less likely homeowners and businesses will insure their property for disaster.

These problems are also embedded in the National Flood Insurance Program, which has long used federal insurance subsidies to mask the true risks of flooding. This federal program now faces a multibillion-dollar debt to US taxpayers as a result of increasingly powerful storms and hurricanes.

Moreover, there is little coordination between federal, state, and local governments and agencies, as well as private businesses and industry groups, when it comes to preparing for and mitigating before a storm or other disaster.

Rather than continuing on this course, the federal government must begin overhauling current disaster policies.

This report identifies several reforms that could move the policy framework in a more sustainable direction.

Encourage Planning and Mitigation:

  • Shift some federal resources to pre-disaster preparation to help communities plan for and mitigate risk.
  • Provide disaster assistance on a sliding scale to incentivize communities to ramp up pre-disaster preparation, particularly through the use of natural infrastructure and smarter safer building.
  • Ensure disaster spending is linked to concrete results, smarter safer building, and the mitigation of long term risks.
  • Encourage the use of natural infrastructure such as marshes and dunes wherever possible to absorb storm surges and riverine flooding, and lessen the impact of waves.
  • Explore the use of public-private finance options to pay for disaster mitigation.
  • Ensure FEMA’s limited hazard mitigation funds are being spent on mitigation efforts that truly reduce disaster losses rather than expensive floodwalls, levees, and other so-called “grey infrastructure” that is within the purview of other agencies with larger budgets.

Fortify Infrastructure:

  • Protect federal infrastructure with the development and enforcement of smarter and safer mitigation standards, including adoption of recently updated federal flood risk management standards.
  • Require communities that access pre- and post disaster funds to have plans in place to rebuild or repair public infrastructure in smarter safer ways.
  • Explore the use of private-sector financial tools such as insurance and catastrophe bonds to shield publicly owned infrastructure from catastrophic, taxpayer-funded liabilities in case of disaster.

Reform Flood Insurance:

  • Phase in National Flood Insurance Program premiums to risk based rates and ensure flood maps are accurate and informed by the best available science.
  • Provide subsidies only for those who truly cannot afford risk-based rates through a means tested, time-limited and transparent system outside of the rate structure.
  • Encourage mitigation by expanding the Community Rating System and increasing the number of enrolled communities.
  • Ensure that private sector insurance can compete to cover a greater share of risks in disaster-prone communities.

Ensure Equity:

  • Mitigate the cost of flood insurance rate hikes with targeted, means-tested, temporary, and paid-for assistance that is outside the rate structure.
  • Ensure low-income communities and households are able to fully participate in federal mitigation efforts and implement a clear plan to help lower-income communities bear the cost of planning, preparedness, and mitigation and make sure disaster relief flows to areas of greatest need.

Improve Coordination:

  • Establish a central, high-level federal office to better coordinate emergency response and preparedness.
  • Set clear roles for federal government, state and local governments, community organizations, and individuals when it comes to disaster activities ranging from planning to mitigation, response and recovery.
  • Better bridge silos among advocates working in water quality, climate change, and floodplain management.

This report lays out a roadmap to a more rational approach to federal disaster policies that will save taxpayer dollars, protect the environment, and better prepare all Americans for the risks they face. With all signs pointing to a more dangerous, disaster-prone future, it is vital that the federal government starts preparing for these changes immediately.

Coalition letter on NSA surveillance reform

April 21, 2015, 2:44 PM

Dear Chairman Goodlatte, Ranking Member Conyers, Chairman Grassley, and Ranking Member Leahy:

We urge you to end mass surveillance of Americans. Among us are civil liberties organizations from across the political spectrum that speak for millions of people, businesses, whistleblowers and experts. The impending expiration of three USA PATRIOT Act provisions on June 1 is a golden opportunity to end mass surveillance and enact additional reforms.

Current surveillance practices are virtually limitless. They are unnecessary, counterproductive and costly. They undermine our economy and the public’s trust in government. And they undercut the proper functioning of government.

Meaningful surveillance reform entails congressional repeal of laws and protocols the executive secretly interprets to permit current mass-surveillance practices. Additionally, it requires Congress to appreciably increase transparency, oversight and accountability of intelligence agencies, especially those that have acted unconstitutionally.

A majority of the House of Representatives already has voted against mass surveillance. The Massie-Lofgren amendment to the National Defense Authorization Act garnered 293 votes in support of defunding “backdoor searches.” Unfortunately, that amendment was not included in the “CRomnibus” despite overwhelming support. We urge you to act once again to vindicate our fundamental liberties.

End the NSA’s bulk collection of telephone information under the USA PATRIOT Act.

Mass surveillance conducted under Section 215 of the USA PATRIOT Act is antithetical to Americans’ exercise of their civil liberties. Section 215 has been interpreted by the executive branch as providing for the collection of virtually unlimited personal information, from gun records and financial records to our physical locations and with whom we talk. All the worse, this intrusive collection is not only unconstitutional; it is unnecessary. The president’s Privacy and Civil Liberties Oversight Board concluded that not a single instance exists “involving a threat to the United States in which the telephone records program made a concrete difference in the outcome of a counterterrorism investigation.” Others have reached similar conclusions. Even the NSA considered ending the program because “the costs outweighed the meager counterterrorism benefits.” Additional provisions that may be interpreted to allow bulk collection—whether under Section 214, via National Security Letters, or elsewhere—must also be addressed.

End the FISA Amendments Act and Executive Order 12333 mass surveillance programs.

Congress must end mass surveillance programs purportedly authorized under the FISA Amendments Act and Executive Order 12333. These programs are incredibly broad. For example, they include the acquisition of vast amounts of information sent privately over the Internet (e.g., “upstream collection” under Section 702 of the FISA Amendments Act of 2008). They also include any information or communication, by foreigners and Americans, that is ever transmitted outside the physical boundaries of the United States (e.g., as authorized by Executive Order 12333). Section 702 results in the unnecessary collection of innocent Americans’ domestic communications, and EO 12333 raises troubling concerns about the scope of “authorized” collections.

Restore accountability for bad actors in the intelligence community.

Accountability starts with truth. Members of Congress, both on the left and the right, must have access to documents necessary to know the full story. They must be able to trust those they oversee. When they are misled, as occurred in statements by Director of National Intelligence James Clapper and CIA Director John Brennan, there must be consequences. In addition, the intelligence committees and members of Congress must have the staff, resources, clearance and cooperation necessary to provide vigorous oversight. A special committee should investigate and publicly report on intelligence community transgressions since Sept. 11.

Mass surveillance is counterproductive.

The evidence shows mass surveillance costs outweigh any tangible benefits. Furthermore, the misdirection of resources undermines support for the analysts who must connect the dots.

Mass surveillance harms our economy.

Mass surveillance will cost the digital economy up to $180 billion in lost revenue by 2016. Law enforcement efforts to subvert the integrity of technology—in particular by attacking privacy and security mechanisms built into technology—threaten the profitability of American manufacturers, entrepreneurs and software companies. Already, 30 percent of all American adults report changing their online behavior in response to surveillance fears.

Americans want mass surveillance to stop.

Americans oppose domestic mass surveillance. 57 percent of American adults deem it unacceptable for government to monitor communications of U.S. citizens, according to a 2015 Pew survey. 61 percent of Americans are losing confidence that surveillance efforts serve the public interest.

Mass surveillance is a red herring for effective anti-terrorism policies.

America can lead the world in civil liberties. But to do that, we must:

  • Ensure a probable cause-based warrant requirement for acquiring and searching the communications of U.S. persons;
  • End bulk and “bulky” (i.e., broadly defined, e.g. by location) information collection;
  • Inform the public about the scope of surveillance by requiring each intelligence collection agency—and allowing companies—to release granular information about collections;
  • Prohibit the government from weakening security and privacy technology;
  • Provide pathways for and protect whistleblowers who report problems;
  • Slim down the role of the FISC, which has expanded from its original mandate;
  • Publish “secret law,” including documents that interpret the law on matters of national security, except to the extent it contains facts that risk the viability of investigations;
  • Require independent audits of intelligence agencies’ compliance with the law;
  • Strengthen and empower congressional oversight;
  • Legislatively address and limit the state secrets privilege; and
  • Conduct a full accounting of post-Sept. 11 intelligence community activities with substantial public reporting.

For more information, please contact Josh Withrow, legislative affairs manager at FreedomWorks at 202.783.3870 or jwithrow@freedomworks.org; Daniel Schuman, policy director at Demand Progress at 202.577.6100 or daniel@demandprogress.org; or Sascha Meinrath, director of X-Lab, at sascha@thexlab.org.

Sincerely yours,

American-Arab Anti-Discrimination Committee (ADC)
Amicus
Appar
Arab American Institute
Augur
Automattic
Badger Maps, Inc.
Bill Binney
Bill of Rights Defense Committee
Boing Boing
Constitutional Alliance
Contextly
CREDO
Dan Ellsberg
Data Foundry
Defending Dissent Foundation
Demand Progress
Diane Roark
Distinc.tt
DuckDuckGo
Earbits, Inc.
Ed Loomis
Fight for the Future
Foundry Group
Freedom of the Press Foundation
FreedomWorks
Friends Committee on National Legislation
GitHub, Inc.
Golden Frog
Government Accountability Project
Grid
InXile
J. Kirk Weibe
John Tate, President, Campaign for Liberty
Law Office of Elaine Mittleman
LawGives
Liberty Coalition
Linknovate
Media Alliance
National Security Counselors
OpenTheGovernement.org
PadMapper
Participatory Politics Foundation
Project On Government Oversight (POGO)
R Street Institute
Recrout
Restore The Fourth
Reylabs, Inc.
Rhode Island Coalition to Defend Human and Civil
Rights
RootsAction.org
Sonic
Statwing
Student Net Alliance
Sunlight Foundation
TechFreedom
TheNextWeb.com
Thomas Drake
ThoughtWorks
TouchCast
X-Lab

E-cigarette taxes aren’t the answer to Louisiana’s budget woes

April 21, 2015, 1:24 PM

Louisiana is facing a $1.6 billion deficit, according to the most recent estimates, and state lawmakers are looking at various ways to close the deficit.

One popular option among state legislators is to increase tobacco taxes. But disturbingly, some are looking to expand those taxes to include e-cigarettes.

Currently, e-cigarettes are subjected the 4 percent sales tax, plus whatever local rate is charged. If H.B. 515 – sponsored by state Rep. Harold Ritchie, D-Bogalusa – were to become law, e-cigarettes would be charged an additional excise tax of 5 cents per milliliter of liquid nicotine solution. It also provides for taxing vapor products, but it’s unclear if they’ll be subjected to excise taxes or merely charged state and local sales taxes.

While Louisiana is constitutionally obligated, like most states, to have a balanced budget at the end of its legislative session, this is a poor plan to close that deficit. It would take a valuable “stop smoking” aid out of the hands of poorer Louisianians and harm the state’s health.

One of the reasons Ritchie says he is pushing numerous tobacco tax increases is to help people, including himself, to quit smoking

He authored House Bill 119. It would take the current 36-cent cigarette tax and raise it an additional $1.18,

bringing the state’s tax to $1.54. That is said to be current national average per pack.

‘As most of you know, I’m a smoker,’ said Ritchie. ‘Started when I was a teenager.’

Ritchie said he hopes a higher tax would help him quit smoking.

He says the increase would generate $223 million in annual state revenue. Supporters of Ritchie’s bill say an increase would also mean fewer smoking related deaths.

I don’t doubt Ritchie’s sincerity in wanting to reduce tobacco-related deaths. He has watched family members die due to smoking-related illnesses. Ritchie also runs a funeral home, so I’m sure he’s overseen the funerals of many others who have died because of smoking.

I, too, have watched firsthand the carnage that tobacco-related illnesses cause. My father lost his leg due to a condition that was aggravated by tobacco use. My mother suffers from COPD and heart disease that was caused by smoking for more than 30 years. I can sympathize with the goal to reduce tobacco deaths and illnesses, but Ritchie’s tax increases on e-cigarettes is not the way.

E-cigarettes reduce the harm caused by tobacco use. When someone “vapes,” they take in nicotine without nearly as much of the carcinogens and other chemicals that cause health problems. E-cigarettes also do not produce the toxic smoke that tobacco smoke does, putting bystanders at risk. The FDA has told Congress that e-cigarettes are less harmful than smoking, so it does not make sense to tax them punitively under the excise tax structure.

If the goal is to reduce tobacco-related deaths, Ritchie and the Louisiana legislature should embrace e-cigarettes. Studies have shown that e-cigarettes have helped people quit smoking. A British study found that people who use e-cigarettes were 60 percent more likely to quit than by using nicotine patches or gum.

E-cigarettes have been found to be used primarily by smokers looking for a lower-risk alternative to get their nicotine fix. There is literally no evidence that young people use it as a gateway to smoking.

Earlier this year, New Orleans has already made a wrong-headed decision on e-cigarettes by including them in their public smoking ban. This was despite the fact that e-cigarettes do not pose the health risk to non-smokers that tobacco smoke does. The State of Louisiana should not follow in the city’s footsteps.

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TPA: Trading up for a better deal

April 21, 2015, 11:20 AM

I have the National Football League draft, set to start April 30, on my mind this week. As fellow Philadelphia Eagles fans know, there is major speculation about whether head coach Chip Kelly will trade up for a chance to land Heisman Trophy winner Marcus Mariota.

Against that background, it is fitting that Congress is set to address the question of international trade agreements. After years of negotiation, congressional leaders have finally introduced trade promotion authority legislation to establish a workable game plan for imminent trade deals, including the Trans Pacific Partnerhip and the Transatlantic Trade and Investment Partnership.

A bicameral bill called the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 looks to set down congressional objectives that current and future administrations must follow when entering into and managing trade talks with foreign countries. This blueprint also requires increased transparency, granting Congress access to important information about the deals. Within the guidelines, the legislation would once again enable this and future presidents to “fast track” trade negotiations and submit proposed trade deals to Congress for an up-or-down vote.

While opposition to trade liberalization was always expected from certain elements of the political left, surprisingly, some on the right have voiced opposition suggesting that TPA is simply a “power grab” by President Barack Obama.

The claims of executive overreach couldn’t be farther from reality. The fact is that the TPA proposal would re-establish the same sort of trade negotiation framework that was in place from 1974 to 1994, and then again from 2002 to 2007, enabling both the legislative and executive branches to work together to develop trade policies that are consistent with the Constitution. As Cato Institute scholar Daniel Ikenson explains:

Congress does not relinquish its authority. It reiterates its authority by setting boundaries for the president.

This is not to say that the proposed TPA is perfect. While the blueprint has its merits, such as provisions to limit restrictions on the flow of data, it unfortunately also pushes forward a less-than-ideal approach to intellectual property. In an effort to establish stringent intellectual property protection and enforcement, the proposal does not offer a balance to reflect other parts of U.S. copyright law upon which the Internet sector depends.

R Street’s Mike Godwin summed up the concern, explaining:

Our government’s TPA and its treaty negotiations need to reflect the needs of all stakeholders, including technology companies and ordinary users. The current language seems to suggest that only copyright holders’ interests matter.

This is the benefit of the TPA legislation, giving Congress an opportunity to openly debate its trade priorities. While I hope legislators will look to amend their approach on intellectual property, it is essential that Congress moves forward on a free-trade, free-market framework.

The United States is still trying to move on from the Great Recession. Efforts to remove trade restrictions should be moved forward to expand economic opportunity. Far too often, Congress has punted on policy. Here is an opportunity for our elected legislators to push for more than a few yards and a cloud of dust.

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R Street praises Gov. Brownback for vetoing damaging ridesharing bill

April 20, 2015, 5:38 PM

TOPEKA, Kan. (April 20, 2015) – The R Street Institute praised Kansas Gov. Sam Brownback for heeding consumer concerns and vetoing S.B.117, a bill that would have placed burdensome restrictions on ridesharing companies and may have forced them to cease operations in the state.

Recognizing the need for innovation to spur economic growth, Gov. Brownback said in his veto statement that placing these burdens on an emerging industry would invite more problems, not less.

“While we applaud the Kansas Legislature’s initiative to advance full legalization of transportation network companies operating in Kansas, this effort must be undertaken in a manner that promotes competition and innovation, rather than impeding it,” said R Street President Eli Lehrer. “While well-intentioned, the restrictions in the bill would have limit innovations that could help significantly reduce costs.”

Many of the nation’s leading insurance trade associations, along with transportation network companies, have reached an accord about what exactly constitutes a comprehensive, yet flexible insurance framework for ridesharing.

“We encourage the Legislature to start from scratch and craft legislation that follows the compromise model that is already under consideration in numerous states across the country,” said Lehrer.

 

Copyright could be stumbling block in trade bill

April 20, 2015, 4:09 PM

From The Hill:

Woodworth’s sentiment was echoed by advocacy groups including the Center for Democracy and Technology, R Street and the American Library Association.

“Ensuring our Internet platforms are successful both at home and abroad is integral to growing the global economy, which is why exceptions and limitations consistent with U.S. law should be included in trade agreements,” they said in a joint statement.

What’s really in the new Trade Promotion Authority bill?

April 20, 2015, 3:56 PM

From Cato at Liberty:

On fair use, this statement from R Street on TPA’s IP objectives is informative:

‘Although R Street supports TPA legislation in principle, we’re strongly concerned about how it may affect digital copyright in practice, and whether it will affect how ordinary citizens lawfully use copyrighted works,’ said Mike Godwin, general counsel and director of innovation policy at R Street. ‘Current TPA language stresses ‘strong’ enforcement measures, but doesn’t mention important exceptions and limitations that apply under our copyright laws.’

R Street expresses concerns about TPA bills

April 20, 2015, 10:56 AM

WASHINGTON (April 20, 2015) – The R Street Institute expressed reservations today about H.R. 1890, better known as the “Trade Promotion Authority” bill, introduced April 17 by House Ways and Means Committee Chairman Paul Ryan, R-Wis.

Companion legislation, S. 995, also has been introduced in the U.S. Senate by Sens. Orrin Hatch, R-Utah, and Ron Wyden, D-Ore., the chairman and ranking member, respectively, of the Senate Finance Committee. The bills mirror legislation introduced last year by Hatch and former Sen. Baucus, D-Mont.

As written, the TPA proposal – which would grant the executive branch the right to “fast track” trade negotiations – requires stringent intellectual property protection and enforcement, but does not offer balance to reflect other parts of U.S. copyright law upon which the Internet sector depends.

“Although R Street supports TPA legislation in principle, we’re strongly concerned about how it may affect digital copyright in practice, and whether it will affect how ordinary citizens lawfully use copyrighted works,” said Mike Godwin, general counsel and director of innovation policy at R Street. “Current TPA language stresses ‘strong’ enforcement measures, but doesn’t mention important exceptions and limitations that apply under our copyright laws.”

Such exceptions could include access for the blind and disabled, fair use or temporary copies as required by computers, cloud services and other lawful digital uses. While TPA legislation should not go further than current U.S. copyright law, any such legislation that fails to export all of these other aspects of U.S. law internationally would be incomplete.

“Our government’s TPA and its treaty negotiations need to reflect the needs of all stakeholders, including technology companies and ordinary users,” Godwin said. “The current language seems to suggest that only copyright holders’ interests matter.”

Testimony on Texas auto franchise rules

April 20, 2015, 9:39 AM

Chairman Smith, members, my name is Josiah Neeley and I am Texas director of the R Street Institute. R Street is a nonprofit, free-market think tank headquartered in Washington, though I am based in Austin. I’m here today to speak in favor of H.B. 1653.

Texas’ current blanket prohibition on direct sales of automobiles by manufacturers hurts Texas consumers. An analysis by Goldman Sachs found that alternative automobile-distribution systems could save consumers 8.6 percent on the cost of a vehicle. Innovative models that allow greater consumer choice and lower overhead are prohibited by the current franchise system.

H.B. 1653 is not an anti-dealership bill. It simply creates a minor exception to the current auto dealer franchise laws that would allow manufacturers to sell directly to the consumer in certain cases. Whether direct sales are superior to sales through dealerships is something that should be left to the market. While the bill is more limited than we believe is justified, it is a step in the right direction.

Some have suggested this bill raises equal-protection concerns, because it establishes two different systems for auto sales. As an attorney who has specialized in constitutional law, I can assure you these concerns are without merit. Heightened scrutiny under the Equal Protection Clause applies only to laws impinging on fundamental rights (such as the free exercise of religion) or that involve certain protected classifications (such as race). Auto dealers are not such a class. Therefore, laws governing dealer franchises are subject to rational basis review, a very minimal standard that is easily met here.

I would be happy to answer any questions.

R Street urges Texas to restore local control of pension plans  

April 20, 2015, 9:25 AM

AUSTIN, Tex. (April 20, 2015) - The R Street Institute expressed strong support for H.B. 2608, under consideration today by the Texas state House Pension Committee.

Sponsored by Rep. Jim Murphy, R-Houston, the legislation would restore local control of retirement systems currently under state governance.

“Local governments need to have control over their pension systems if they are to govern effectively,” said Josiah Neeley, R Street’s Texas director. “This bill will restore local control over public retirement systems and end the growing practice of making plans difficult to change by enshrining them in state law.”

Currently, more than a dozen municipal retirement systems have their pension plans in state statute, placing yet another layer of government bureaucracy between plans and community stakeholders. H.B. 2608 seeks to eliminate that layer by granting municipalities the ability to administer their own pension systems.

“It’s important for stakeholders in the community to have a seat at the table when it comes to their own employee retirement plans,” said Neeley.

 

The question of raising taxes

April 20, 2015, 8:42 AM

It was shrewd of The Sacramento Bee’s editorial board to choose its words carefully when it called for tax reform (“There’s no time like April to talk about tax reform”; Editorials, April 13).

As the editorial points out, Gov. Jerry Brown is not running for re-election and the Democrats have comfortable majorities in the Legislature. As such, the editorial board urges policymakers “to show the courage to tackle one of the state’s most vexing problems.”

California’s tax problems need to be addressed – though, we disagree about what makes them so vexing – and elected representatives are better-suited to the task than an initiative to the voters. But calling for action requiring political courage betrays the unlikelihood of any such outcome. Courageous decisions demand accountability, and that’s precisely the reason they are so rarely made.

Consider the approach by Assembly Speaker Toni Atkins, D-San Diego, to implement a new road fee. Her proposal is a tax reform that would replace revenue from the increasingly unreliable gas tax with a $52 annual fee on motorists to repair and maintain vital infrastructure.

Atkins’ desired policy outcome is laudable. But her bill is supposed to raise $1.8 billion annually. To realize her goal, Atkins is seeking to avoid the courageous and transparent route of charging the fee directly. Instead, she wants to tack the new levy on to drivers’ insurance bills, where it will be presented as an easier-to-swallow $4.33 monthly charge.

Asking private parties to act as the state’s revenue collectors is nothing new, but the practice is troubling because it disrupts the line of accountability between taxpayers and their representatives. Democratic societies depend upon transparency. Only by knowing what public officials are up to can they be answerable for their actions.

Atkins and the rest of our heavily Democratic state government should not be afraid of undertaking their tax reforms openly. Particularly when, as in the case of the road fee, tax reforms will lead to revenue increases.

In recent history, Californians have demonstrated they have a tolerance for tax increases. They voted for Proposition 30 in 2012. Arguably, California Democrats were placed in office to do what Republicans are refusing to do, which is to raise taxes.

For those reasons, tax reforms, which often involve new or raised taxes, should not be considered a courageous decision and certainly should not be obscured in any way. If the political cost for openly embarking on tax reform is losing elections, then perhaps the real question is whether some of the reforms should be contemplated at all.

The online sales tax cash grab

April 20, 2015, 8:30 AM

From Reason:

“Finally, someone in Congress has drafted an approach to the Internet sales tax issue that doesn’t empower bureaucrats to tax across state lines and saddle Web-based retailers with enormous complexity,” says Andrew Moylan, executive director of the pro-market R Street Institute. Moylan was alluding to the Marketplace Fairness Act, the states’ preferred alternative to Goodlatte’s bill. The act, which passed the Senate in 2013 but died in the House, would have allowed states to levy sales taxes based on buyers’ locations.

As Moylan notes, that “would force online sellers to comply with the tax rules of as many as 9,998 different taxing jurisdictions nationwide, imposing huge compliance burdens and opening them up to audits from all 46 states with statewide sales taxes.” It would also destroy tax competition by giving “state-level ‘IRS’ agents the unprecedented power to enforce their tax obligations on businesses all across the country even if [the businesses] lack a physical presence within [the agents’] jurisdiction.”

… Mitigating this problem from a customer’s point of view is that the incentive remains to buy from sellers in low-rate states. And as R Street’s Moylan notes, “cutting checks by formula” is one of the few things the government is good at.

The much bigger drawback is that Goodlatte’s bill would impose taxes on customers buying from businesses in states that do not have a sales tax at all, such as Delaware and Oregon. A business in any of those states would be required to collect taxes from out-of-state buyers using the lowest combined state and local rate in the country. (At the moment, Wyoming takes that prize with a combined sales tax rate of 5.49 percent.) This provision, which is likely intended to grab more revenue, defeats the point of having an origin-based tax, since it forces certain businesses to collect taxes when they otherwise would not have to.

“The proposal would be improved substantially,” Moylan says, “if it better protected sellers in non-sales-tax states (perhaps by allowing them to opt out of any collection scheme).” He also suggests other changes, such as passing legislation to impede the silly abuses allowed by affiliate nexus laws. But ultimately, Moylan thinks a version of Goodlatte’s proposal would be “an enormous victory for the cause of sanity in taxation. It would solve the Internet sales tax debacle without imposing a cure worse than the disease and it would help reestablish borders as limits to tax state tax power.”

Conservative case for surveillance reform Hill briefing

April 20, 2015, 7:00 AM

Two years ago, major revelations about the National Security Agency’s massive intrusion into the lives of all Americans kickstarted a national debate about the right to privacy and questions of government intrusion into our personal lives. With key sections of the Patriot Act set to expire in six weeks, Congress must address the constitutionality and effectiveness of the NSA’s mass-surveillance programs.

This panel set out to establish the “conservative case” for surveillance reform, demonstrating that preservation of individual liberty and privacy are necessary for a strong and vibrant economy.

Moderated by Nathan Leamer, outreach manager and policy analyst for the R Street Institute, panelists include:

  • Mike Godwin, director of innovation policy for the R Street Institute
  • Wayne Brough, chief economist and vice president of research at FreedomWorks
  • Patrick Eddington, policy analyst at the Cato Institute
  • Sunday Yokubaitis, president of Golden Frog

 

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R Street praises Michigan Senate for tackling reforms to the auto insurance system

April 17, 2015, 9:45 AM

LANSING, Mich. (April 17, 2015) – The R Street Institute welcomes last night’s 21 to 17 vote by the Michigan state Senate to adopt significant reforms that would curb costs and fraud in the state’s no-fault auto insurance system.

Under S.B. 248, sponsored by state Sen. Joe Hune, R-Hamburg, Michigan would create an insurance fraud authority, funded by the insurance industry, to serve as a central repository of suspicious claims data and to assist local law enforcement in prosecuting insurance fraud.The measure also would cap compensation for attendant care provided by family members and establish a fee schedule to bring reimbursement for medical procedures and products in line with rates paid by commercial health insurance carriers.Finally, the bill would restructure the Michigan Catastrophic Claims Association, a state-run reinsurance mechanism created to handle catastrophic claims made possible by a unique Michigan law requiring auto insurers to provide unlimited lifetime medical benefits. Under the bill the MCCA would be reinvented as a provider of excess coverage that will sell separate polices to drivers for claims that exceed $545,000.

“R Street has been advocating for a fraud bureau, cost containment and no fault reforms in Michigan since we first opened our doors,” R Street Midwest Director Alan Smith said. “We congratulate Sen. Hune and Senate leadership for their hard work on this measure. We think these are very welcome changes to mitigate the effects of abuse of the system which continues to be very popular with Michiganders overall, and we hope the state House agrees.”

Michigan consistently ranks among the top five states in the nation for high auto insurance, and in recent years the average price for car insurance in Michigan has remained more than $2,000 per year. The state scored a “D” in R Street’s 2014 report card on insurance regulation across the country.”Michigan regularly reports auto insurance loss ratios that not only are the highest in the country, but that are several standard deviations higher than the closest state,” said the report card’s author and R Street Senior Fellow R.J. Lehmann. “It also has performed poorly in our rankings in that, despite very high rates of suspicious claims, there is no dedicated staff to policing and investigating insurance fraud. These changes will, one suspects, improve the state’s assessment considerably in the years ahead.”