Are casinos the solution to TWIA’s woes?
When it comes to hurricane insurance, Texas is in trouble. The state-run Texas Windstorm Insurance Association has more than $77 billion in potential liabilities, but only a few hundred million in its catastrophe relief fund. The last time a big storm hit, the agency was driven to the brink of bankruptcy, and even with Texas’ recent hurricane dry spell, TWIA remains one big storm away from ruin.
There have been a number of solutions proposed to fix TWIA’s fiscal woes, but perhaps none are more inventive than legislation recently filed by state Rep. Joe Deshotel, D-Port Arthur:
The plan is fairly simple. Full Las Vegas-style casinos will be permitted within a first-tier coastal county or second-tier county or in a county where its county seat is within 100 miles from a first- or second-tier county.
Jefferson County is a first-tier, or coastal, county. Hardin County is a second tier county. Huntsville, for example, in Walker County, could be within 100 miles of Jefferson County.
Resulting net tax revenues would be earmarked for the Catastrophe Reserve Trust Fund in TWIA to keep it out of deficit. Funds in excess of the amount needed to erase the deficit would go to general revenue.
While this approach is certainly creative, it’s worth noting that Texas’ current plan for dealing with TWIA also involves gambling. The state is betting that it won’t face a serious storm in the near future, so that TWIA’s underfunding won’t matter. The main difference is that, with the current approach, it’s ratepayers and taxpayers throughout the state who may end up footing the bill.
