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Have you ever heard of this? Do you think it is a good idea? I think it is crap and potentially serves as a barrier to people getting insurance, which ultimately will lead to higher costs for the state (and potentially higher premiums for those insured). It's like health care in a way. At any rate, the government should reward good behavior, to wit, the purchase of insurance, they shouldn't penalize it in the form of adding a tax to it. Crazy. Other thoughts?

Governor seeks insurance fee to help fund state police
Saturday, February 26, 2005

SALEM, OR -- With his "slots for cops" plan running into political trouble, Gov. Ted Kulongoski on Friday suggested the Legislature instead levy a surcharge on vehicle insurance to provide money for the Oregon State Police.

"I think it is a perfect fit," the governor told reporters Friday, "and I've urged the Legislature, both chambers, to look at that to move it forward."

Kulongoski had proposed in his budget that the Oregon Lottery introduce new electronic slots games, with $65 million of the additional revenue dedicated to the state police patrols. But the idea has run into heavy resistance from legislators who want to spend the lottery money on education.

The state police has been hit with repeated budget cuts over the past 25 years and has fewer troopers than it had two decades ago despite Oregon's growing population. The state police was once largely funded by the gas tax, but voters have rejected attempts to restore that source for police.

While Senate Democrats have urged the governor to move to an insurance surcharge, the idea drew immediate resistance from Republicans in the House.

"Anybody that is counting on that as new revenue ought to get a doctor," said House Revenue Chairman Tom Butler, R-Ontario. "I don't think it has a life."

No specific proposal has been made. But Sen. Rick Metsger, D-Welches, and then-Rep. Rob Patridge, R-Medford, introduced similar legislation in 2003 that Metsger said would have cost the average motorist about $36 a year.

The surcharge would be levied on the portion of the insurance policy above the state-mandated coverage limits. By state law, any fee levied on the mandatory portion would go to the highway fund.

Sen. Kurt Schrader, D-Canby, the Senate's budget chairman, has been pursuing the insurance idea for several weeks.

Schrader argued the insurance fee should be likened to President Bush raising the surcharge on airline tickets to pay for post-9/11 security improvements.

"It's obviously not a tax increase; George Bush wouldn't do that," Schrader said. "So why can't we have the opportunity to get a funding source for our security, which would be our state police."

Butler said he opposed the increase because Oregon is "already super high in fees" and that he did not want to add to the cost of vehicle insurance.

Krista Fischer of the Insurance Information Service of Oregon & Idaho, an industry-funded group, said insurers were troubled by the idea of a surcharge. She said the surcharge would be costly to administer and could lead some motorists to reduce their coverage limits, putting them at greater risk of financial loss in an accident.

Metsger, however, argued the surcharge could help drive down insurance costs by providing the money to put more troopers on the highways. He said that would reduce drunken driving and speeding, thereby cutting the number of accidents. He said state police also would have more ability to crack down on uninsured motorists, who raise costs for those who do have insurance polices.

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