New York

Over the past several decades, there have been many proposals to build a crossing across Long Island Sound. Given that access to/from Long Island by road requires either passing through the traffic hell that is New York City or a ferry ride, a crossing seems like a good idea to many who live on Long Island or have business there….at least until the expense of building such a crossing (and the taxes or tolls necessary to support such a feat) is considered.

Via misc.transport.road, I came across a pointer to a WCBS-AM report that someone’s giving the concept serious thought again:

Developer Vincent Polimeni is heading consortium that is proposing the construction of a 16-mile-long tunnel under the Long Island Sound. The Cross Sound Link would go from Syosset to Rye.

A pdf file on the Cross Sound Link site goes into a few more details. The paragraph from the report that catches my eye:

No taxpayer dollars would be used to fund the $8 to $10 billion project. Tax-free bonds would be employed and investors around the world would have the option of purchasing
them, as they do for any significant infrastructure project. The bonds would be paid off by
the vehicular drivers who will pay as much as $30 to use the tunnel, but whose price would
rise or fall depending on congestion pricing strategies employed in concert with
transportation officials throughout the region.

Tolls of up to $30? Ouch!

I suppose it still beats the ferry fare (up to $61/car) and rush-hour traffic in the City….but that’s still enough pain to give serious consideration to the alternatives.

After having been soundly roasted over prayer services in Georgia, I’ll foolishly dare to broach another subject where I seem to have a knack for fueling a few flames: immigration.

In the past couple of days, a couple of news items caught my eye, as much for timing as for subject matter.

First, according to the San Francisco Chronicle, it seems that the Board of Supervisors are looking at adopting New Haven style municipal ID’s:

The Board of Supervisors voted Tuesday to issue municipal identification cards to city residents - regardless of whether they are in the country legally[...]

The legislation would require companies holding city contracts to accept the municipal card as a legitimate form of identification - except in cases where other state and federal laws require other forms of proof of age, name and residence.[...]

Ammiano said banking institutions in San Francisco have signaled their willingness to accept the municipal ID card for the purpose of setting up accounts. He noted that people without bank accounts are frequently more vulnerable to theft and robbery.

At around the same time, word comes from New York that Governor Spitzer is backing off his plan to permit a not-valid-for-federal-ID class of drivers licenses which wouldn’t require disclosure of immigration status. From the New York Times:

Gov. Eliot Spitzer is abandoning his plan to issue driver’s licenses to illegal immigrants, saying that opposition is just too overwhelming to move forward with such a policy.[...]

“I am not willing to fight to the bitter end on something that will not ultimately be implemented,” the governor said, “and we also have an enormous agenda on other issues of great importance to New York State that was being stymied by the constant and almost singular focus on this issue.”

Illegal immigration and id issues are topics that I tend to recreationally mull over and waffle around quite a bit on.

On the ID front, I can see the value of making sure that everyone participating in society is able to provide adequate identification…given that today’s society is hung up on identity issues.

(Personally, I’m a bit disappointed that we are so hung up on identity, and I think that if we are going to be this concerned we ought to go ahead and start tattooing barcodes and/or implanting RFID chips onto/into the backs of everyone’s hands or on/in everyone’s forehead….but that’s a discussion for another day.)

However, I am also aware of the fraud issues that arose when Tennessee and North Carolina sought to issue immigration-blind drivers licenses. If you are creating a legal/procedural process to grant some legitimacy to illegality, I can believe there’s an inherent incentive for some folks to abuse that process.

Stepping back and looking at this as part of the larger immigration debate…well, it’s a really difficult picture to gaze upon.

A good law-and-order argument can be made that it is completely unacceptable to in any way, shape, or form condone a systemic flaunting of our laws. If as a society we regard immigration law with contempt…or disregard it completely…aren’t we opening the door to ignoring other laws? If we’re going to have a law, it should either be enforced, or revised into something realistically enforceable.

However, I also see the sense in a realistic observation that there are millions of undocumented immigrants in the country…and many (most?) of them fill a useful role in today’s society. True, if the labor pool formed by undocumented immigrants suddenly disappeared, the economy would adapt, either by supporting higher pay that would attract workers with legal status, or by moving away from industries that exist due to the availability of cheap labor.

Also, we have that niggling detail about whether it’s realistic to seek to deport a few million folks.

If press and blog coverage on the debate surrounding immigration can be believed, it’s a rather polarized set of opinions. Many folks take the seemingly xenophobic stance that all illegal immigrants ought to be removed from the country, and borders be made perfectly secure….cost and damage to the economy be danged.

Other folks take a far more liberal stance of opening the borders and forgiving the folks already here…ignoring the potential instability in the economy a potential influx of people and drain on social services such a change would entail.

Meanwhile, I’m standing here somewhere in the middle, thinking that something ought to be done to instill some sense in immigration policy—that folks who want to come here to work ought to be able to do so, without too much hassle, and assuming that there is room for them in the workforce.

That doesn’t do anything about the status of the undocumented folks who are alredy here…but I’m not sure that’s a question that has an easy answer…especially when immigration law is messed-up and unenforced, providing almost no disincentive to keep folks from continuing to ignore it.

Just when I thought that RealID might collapse due to resistance from states not wanting to make DMV’s any more hellish than they already are… New York adopts an even more bureaucratic solution.  From an AP story:

Saturday’s agreement with the Homeland Security Department will create a three-tier license system in New York. It is the largest state to sign on so far to the government’s post-Sept. 11 effort to make identification cards more secure.[...]

Under the compromise, New York will produce an “enhanced driver’s license” that will be as secure as a passport. It is intended for people who soon will need to meet such ID requirements, even for a short drive to Canada.

A second version of the license will meet new federal standards of the Real ID Act. That law is designed to make it much harder for illegal immigrants or would-be terrorists to obtain licenses.

A third type of license will be available to undocumented immigrants. Spitzer has said this ID will make the state more secure by bringing those people “out of the shadows” and into American society, and will lower auto insurance rates.

I can’t help but wonder how few undocumented immigrants will actually go for the non-RealID drivers license, given that it would be a pretty blatant flag of their status.

Seen at Business Insurance:

Property insurers writing both commercial and personal lines policies in New York would be required to create a catastrophe reserve fund to help pay claims caused by hurricanes and other natural disasters under a new regulation proposed by the state’s insurance department, Superintendent Eric Dinallo announced Thursday.

“There are many proposals to have government take over or subsidize hurricane insurance, as it does with flood insurance,” Mr. Dinallo said in a statement. “I believe it is better to find a private-sector solution. That’s why we are proposing a new state regulation requiring insurance companies to set aside the portion of the premium they now collect for catastrophe protection. This reserve fund will help pay the claims if and when hurricanes and other disasters do hit.[...]

Mr. Dinallo said in his statement that he is “in favor of tax-deferred reserves for hurricanes, but the industry will only achieve that change if it acts first and gains credibility. Meanwhile, we need to start building protection against the potentially huge costs of hurricanes now.”

Bravo!

The idea of cat reserve funds is one that has been tossed around for many years. The basic concept is as follows:

• In today’s world, insurers load their rates to include a provision for catastrophe risk. If there are no cats, the load flows through to the bottom line as extra profit. If there is a cat…well, the insurer will still probably suffer a loss. The extra profit from non-cat years over the long term should be enough to compensate the folks providing the capital to underwrite the risk for the additional variability in returns.
• With a cat reserve, the insurer still loads the rates for cat risk, but the loss portion of that load is placed into essentially a piggy bank. When a catastrophe strikes, the insurer taps into the piggy bank to pay (or help pay) the losses. In non-cat years, apparent profit is reduced, since funds are flowing to the account rather than to the bottom line…but that should be OK given that the results should be more stable, and investors should accept lower returns given the reduced risk.

The catch to date, noted by Dinallo, is that the IRS takes a rather short-term view of the world. If funds are not being used to pay for actual, reported losses (or at least held in reserve for losses known or suspected to have occurred), they’re profit…even if they’re being segregated and restricted to pay for future losses. That creates an extra drag on the long-term financial performance of an insurer which doesn’t exist in the salad-year/lean-year setup without reserves.

I will admit that I very quickly get a headache when I think about the accounting and systems work that will be required to make such a setup work. I will also be very interested to see what the draft regulation ends up saying about how much of a catastrophe piggy bank will be acceptable…and what happens to any amounts in excess of a prescribed threshold.

I’m also intrigued by the potential “warm and fuzzy” aspects of the idea. If executed correctly, the use of cat reserve funds deflates consumer advocates’ claims of insurer profiteering on cat-exposed business. If we raise rates to cover cat risk, the additional revenue flows into a bank account, not to our profit figures. If insurers’ financials appear more stable, the pure profit provision in the rates can theoretically be relaxed, and perhaps cat exposed business doesn’t necessarily look quite as scary.

This is an idea that would be better done countrywide, and taxing the reserve does create an unnecessary drag on operations…but like Dinallo notes, someone has to start the process.

And, it is a far more sensible idea than (say) the state becoming a reinsurer without fully funding its activities in that regard.