The magazine of the North Carolina Center for Voter Education • Sunday February 05, 2012

'Voter-Owned Elections' Save Money

By Chase Foster
Published: Jul. 24, 2009

RALEIGH - Having an insurance commissioner who is willing to stand up to the insurance industry can save consumers tens of millions of dollars.

A settlement reached this week between the insurance industry and the Department of Insurance reverses a 9.4 percent rate increase, bans all further increases into 2011 and requires insurance companies to return $50 million to consumers with interest. That's $102 in the pocket of an average driver in Durham or $92 for an average driver in Raleigh, according to the department.

Simply put, North Carolinians would not be receiving these rebates if the commissioner of insurance had not been willing to spend months fighting the insurance industry's proposed rate increase in court. And if the commissioner of insurance was in the pocket of the insurance industry, we would certainly not have what the department calculates to be the fifth-lowest auto insurance rates in the country.

The fact that Commissioner of Insurance Wayne Goodwin ran under our state's Voter-Owned Elections program last year helps ensure that we have an insurance regulatory head who is willing to stand up to one of the most powerful industries in the state. The program allowed Goodwin and his Republican opponent John Odom to raise less than 5 percent of their total campaign money from the insurance and other department-regulated industries. Compare that with the 66 percent of campaign money former Commissioner of Insurance Jim Long received from the industry in 2004, according to a study done by N.C. Voters for Clean Elections.

So let's do the math. North Carolina consumers will save $50 million in insurance premiums this year, in part because we have a state insurance commissioner who is not dependent on campaign money from the insurance industry. The program that facilitates this independence costs the taxpayers less than $800,000 per election cycle or $200,000 a year over four years. That's a 25,000 percent return.  Not a bad payoff for a basic good-government reform.

Now you might question whether Voter-Owned Elections is really what made the difference. After all, maybe a candidate who had received two-thirds of their money from the insurance industry would still have challenged the proposed insurance hikes, as Jim Long did for many years.

Maybe so. There are many good elected officials within our current system who do their best to uphold the public interest. But no matter who they are and what they do, the perception of a conflict of interest will remain as long as special interests dominate the fundraising chase. We would wonder if the commissioner had fought as hard knowing that he was going to have to ask for money from these same people two years later. We would question whether he had the same tenacity at the bargaining table. And we'd have to accept the fact that even with the beset of intentions he was still likely being influenced in some way by the process of raising hundreds of thousands of dollars from special interests.

It's just human nature. Or a logistical/scheduling reality (how many hours do politicians spend fundraising at how many parties?). Raising that much money from a single industry would affect any of us, no matter how good our intentions.

And that's why Voter-Owned Elections is such a fantastic solution. In a single swoop it makes all of these questions about conflicts of interest and ambiguities about influence moot. By eliminating the fundraising reliance on the insurance industry, North Carolinians don't have to wonder if the industry is using donations to gain undue influence. By taking away the mere possibility that an elected official's conduct could be affected by campaign donations, we all can have more confidence in government.

Hopefully the General Assembly will take this lesson to heart and pass Senate Bill 966 ("Expanded Voter-Owned Elections") before it adjourns this year. The bill would expand the public financing option to five other Council of State races including attorney general, state treasurer, secretary of state, commissioner of labor and commissioner of agriculture.

Not only would it allow state residents to benefit from better government, but it might also save all of us some hard cash.