Two days before statewide elections, Louisiana Insurance Commissioner Jim Donelon, who refused to involve himself in the State Office of Group Benefits controversy because, he insisted, the state employee health insurance was not insurance, has suddenly become a consumer advocate over those delinquent fee letters sent out by the Office of Motor Vehicles (OMV) on Oct. 13.
Never mind that OGB provides health insurance to about 230,000 state employees, retirees and dependents and never mind that it was taken over by Blue Cross Blue Shield of Louisiana (a major contributor to Donelon’s campaigns).
Never mind that the Louisiana Department of Insurance approved the purchase of two insurance companies in 2013 by an individual who had little industry experience and never mind that both companies were seized by regulators within a year when it was learned that Alexander Chatfield Burns allegedly siphoned hundreds of millions of dollars in stocks and bonds off the company’s books, replacing them with worthless assets.
Never mind that in 2012 Donelon put former state legislator Noble Ellington on the payroll as a $150,000 per year as the department’s number-two man despite Ellington’s glaring lack of experience in insurance.
Never mind that Donelon did little to rein in auto insurance companies that were trying to steer auto repairs to favored body shops that were accused of doing unsafe work and providing after-market parts.
Never mind that Donelon has been the beneficiary of more than $4.5 million in campaign contributions from insurance companies and insurance defense attorneys since 2006.
That was then. This is now and now is only two days before Donelon is to face a challenge from three opponents in Saturday’s election. So of course, he wades into the controversy over those 1.2 million delinquent notices sent out to motorists that OMV claims owe fines for various offenses dating as far back as 1986 (29 years if you’re doing the math).
LouisianaVoice first wrote about this back on Sept. 29 when we observed that none of the $11 million earmarked to pay for state police pay raises through the “enhanced debt collection efforts” by OMV has been submitted to the state general fund.
That was first made known in a confidential report prepared for legislators obtained by LouisianaVoice.
House Bill 638 by State Rep. Barry Ivey (R-Baton Rouge) was enacted and signed into law by Bobby Jindal as Act 414. HB 638 provided that the Department of Public Safety (DPS) collect certain fees “associated with the suspension of an operator’s license” which were related to auto liability insurance requirements. The fees become delinquent after 60 days and are referred to the Office of Debt Recovery.
The bill earmarked $25 million from the Debt Recovery Fund for use by the Office of State Police. But none of that money has yet to go to the general fund, prompting concern by legislators and resulting in the report.
Legislative watchdog and resident curmudgeon C.B. Forgotston way back on Jan. 16 of this year questioned the constitutionality of an earlier bill by Ivey, HB 872, passed during the 2014 regular legislative session which added a $75 fee for the reinstatement of a driver’s lapsed auto liability insurance. HB 872 was to generate about $53 million per year with $42 million earmarked for the general operations of DPS, $7 million to housing parolees and $1 million to district attorneys.
Forgotston said HB 872 was called a “fee,” but in actuality, is an unconstitutionally-passed “tax.” The reason for its being unconstitutional is the Louisiana State Constitution of 1974 which says “No measure levying or authorizing a new tax by the state or by any statewide political subdivision whose boundaries are coterminous with the state; increasing an existing tax by the state or by any statewide political subdivision whose boundaries are coterminous with the state; or legislating with regard to tax exemptions, exclusions, deductions or credits shall be introduced or enacted during a regular session held in an even-numbered year.” http://senate.la.gov/Documents/Constitution/Article3.htm
But in the make-believe world of Jindal politics, the Office of Group Benefits is not insurance and a fee is not a tax. That ranks right up there with Bill Clinton’s “It depends on what your definition of is is.”
But back to HB 638 (ACT 414). Just in case you need a reminder just two days before the election, that bill passed unanimously in the House and with just one dissenting vote in the Senate (State Sen. Karen Carter Peterson voted no). Here are the links to the votes of the two chambers just in case you need a handy guide before casting your ballot on Saturday:
And now on the eve of many of those same legislators’ re-election efforts, the bill is creating pure havoc throughout the state.
Why?
Well, consider this. If you had a vehicle you purchased in 1976, say, and you traded it in in 1987. You would have cancelled your insurance and license plate on that vehicle and transferred everything to your new vehicle. But suppose by some clerical error, OMV did not get the word that you sold or traded that old vehicle and suddenly, on Oct. 13 of this year, a delinquent notice went out to you because you have not had insurance on your 1976 vehicle for 28 years. The onus is on you to prove that you had a legitimate reason for not insuring that vehicle or face a fine of $500—or more.
Donelon said, correctly, that the average citizen most likely does not have documentation to prove he or she had insurance because no one keeps proof of insurance from a decade or more ago.
So now you have your notice and you know it’s in error so naturally, you try to call OMV only to encounter what seems to be a permanent busy signal. And if you happen to get through, your call is dropped.
And let’s not forget that Jindal, in his maniacal obsession to privatize everything in state government, contracted out many of the OMV services and laid off scores of OMV employees, so good luck with trying to reach someone to help you.
Many of the 1.2 million who received the letters (at a cost to taxpayers of about $500,000) are claiming that they are accused of offenses that are nothing more than paperwork errors and State Police Superintendent Mike Edmonson is now saying OMV will not pursue any delinquent fines older than 2006 for which OMV does not have proper documentation.
We at LouisianaVoice are of the opinion that any violation allowed to lie dormant by OMV for more than one year with no effort to collect same should be dismissed. Certainly after three years. After all, in Louisiana, if you wait for more than 12 months after being wronged, your case has prescribed and you are unable to file a lawsuit.
That’s 20 years, or 69 percent right off the top of the anticipated $53 million in additional revenue the Jindal administration so desperately needed to patch over holes in the state budget. Edmonson also said the fact that $11 million of that $53 million was to fund pay increases for state troopers had nothing to do with the notices mailed out on Oct. 13.
Donelon, who regulates the insurance industry in Louisiana, OGB notwithstanding, suggested that drivers should not trust OMV records and should call the governor’s office with grievances.
Would that be the governor’s office have an Iowa area code, by any chance?
One reader had a slightly different experience. Here is her account as related to LouisianaVoice in a recent email:
My husband just recently retired 20 years of service in the Army, and we’ve been under contract to buy a home for the first time, in Sulphur. I’m a La native, so we’ve decided to settle here.
Today, we had to switch our insurance companies because the one we’ve had together since married in 2006, and he’s had for many years even before that, has decided in their policy that simply residing in Louisiana means that our insurance must be raised because I suppose something about this State is more risky than Texas, Kentucky, Alabama, or Georgia (all of the states we’ve resided in that our insurance remained unchanged).
Which brings me around to what I have to say. I’d like to explain how I turned a $200 oops into a $566 OMG today.
While attempting to change insurance companies, they ran my driver’s license. Standard.
My license came back as suspended. Later, at the DMV, I was informed not only was my license suspended, but there had been issued a bench warrant for my arrest.
It was a seat belt ticket I got four years ago, and speeding ticket I received one year ago. I forgot to pay it. Over my driving career (I’m 39 years old and I’ve owned 2 Corvettes), I’ve gotten more than one speeding ticket, and more than once, I’ve forgotten to pay it.
However, this was my first in the state of Louisiana, as I’ve lived in Texas for the majority of my adulthood, and the rest in the previous states mentioned. I never received a notice in the mail, warning me of an impending suspension of my license, nor did I receive any notice or warning that a warrant was being issued for my arrest. ALL of which I have received from Texas, giving me an opportunity to address it. I mentioned that fact to the lady at the DA’s office when I arrived to deal with it, and she informed me that “they don’t notify anyone for these things.” So, my license was suspended, and there was a warrant for my arrest, yet the State makes no effort prior to this result, as Texas does, to notify me? No.
They don’t.
I had a moment of terrible dread and relief at the same time. I found out because I was changing insurance companies and they told me.
I looked up the consequences for driving with a suspended license, had I found out by being pulled over, and they are very harsh. It carries a minimum fine of $300, up to $7500 and seven days jail time. All because I forgot to pay a speeding ticket.
After paying the ticket, I returned to the OMV, where I had to pay another $102 to “unsuspend” my license, because paying the ticket + late fine wasn’t enough for the State to teach me a lesson.
While I waited in line, it occurred to me the terrible impact this could have on so many Louisiana families and college students. It seems unrealistic that no one would ever forget to pay a ticket, or even that it would be rare. I wondered if something so simple could be common, but with such crazy, harsh financial consequences, especially if jailed. Suddenly, a DMV employee came out and made the announcement that they were severely understaffed—thanks to Bobby Jindal’s cutbacks (I had already been waiting almost 2 hours at this point) and began to group all of us based on our issues.
Needless to say, I wasn’t surprised that a great many of the people there ended up in the same group as me, dealing with the very same problem. A very expensive problem. A problem that likely could have been prevented for most if not all of us, with a simple notice in the mail.
For me, the total was over $500 to get my license reinstated and ticket paid. There were at least 20 people in line with me. I estimate the OMV likely collected a minimum of $10,000 in about three hours, just from my line. Nearly $30,000 in an average eight-hour work day in fines just from suspended licenses for the most undeserving of reasons from the most vulnerable class of people, yet still were “understaffed” to ridiculousness and a majority of the people I was in line with would probably love to have a job there. That’s $150,000 a week! $600,000 a month! $7.2 million a year!
I have no clue where all of this money goes, or what it pays for, since clearly it isn’t on staffing. The debit card reader wasn’t working so I was forced to an ATM and the clerk I was with struggled endlessly with her computer mouse and what I believed to be serious system lag, so equipment certainly isn’t eating funds.
Maybe this all seems trivial, but truly, it didn’t seem trivial to anyone I was in line with. There was sadness, fear, and dread on the faces of all of them. It was really heartbreaking, and worse, I feel like it likely could have all been prevented with a simple notice in the mail. People are given around 60 days to pay a ticket in Louisiana. It is as though the state counts on many of them being forgotten, and without notice, having their license suspended, and likely many of them discovering this and getting a memory jog by being pulled over for something insignificant, and being put in handcuffs, with a massive fine they can’t pay, and seven days in jail.
I am fortunate enough to be able to pay it and still eat, but I think the look on all of those people’s faces in line with me at the OMV will keep me up tonight. It’s already nearly 1 am, and I’m still bothered by it.
I can’t help but wonder how many people in Louisiana, living their lives, taking care of children, going to work, etc., forget to pay a speeding ticket, and it’s the one thing that knocks them into a hole they can’t get out of; but they check their mail every day.
I’ve been in a lot of places over the last 20 years. Texas to Wisconsin to Connecticut to Georgia to Louisiana. I see more people struggling here than anywhere else I’ve been in the U.S.
I can’t help but think this no-notice high penalty cost system is contributing to bleeding the average Louisianan driving to work and back, to death. Maybe it’s nothing. I think it’s something. Something that must effect the lives of a lot of people.
If a simple notice in the mail could save Louisiana citizens and families $7.2 million a year, I think a lot of people would like to know why it isn’t done.
Isn’t it funny how all of Jindal’s former cronies (Donelin, Angelle, etc) are now so quick to (rightfully) blame him for so many of the state’s problems now that he lives in Iowa?
Reverse Stelly Plan in action
Two things:
If you are a participant in OGB, you need to remember the Donelon facts when you enter the voting booth, particularly those that have directly impacted you..
The true-life story would indicate that OMV is now like banks – they like NSFs because they can stick their customers who often can least afford to pay them with big-time fees for each bounced check. On the other hand, people should neither write hot checks or, as the mayor of my little town told me when I complained about a speed trap, speed. They should also not “forget” to pay tickets when they get them and certainly not more than once.
Very helpful info 2 days before elections. Thank you. What if the GOP plan is to create such public outrage and anger directed at state government offices and the employees that the public embraces privatization? I believe the ultra conservatives are capable of anything.
Somehow, I have a hard time sympathizing with someone who owned two Corvettes, was issued several speeding tickets, forgot to pay them when she apparently could do so without a problem. Had she not violated the law with her speedy little Corvette she would have never faced the problem in the first place. Perhaps she deserved all the problems she had at the OMV.
I can readily understand your position on that but I believe the point the woman was trying to make was not an excuse for her speeding or for her forgetting the citations. Instead, I believe her beef was over the failure of the state to attempt to collect the fines in a timely fashion via notification as is done in other states.
To that end, she has a legitimate point—as 1.2 million others are now learning as they receive their delinquent notices, some as far back as 1986. For the state to wait that long and then out of the blue, attempt to collect exorbitant fines is unconscionable.
As she said, she has the ability to pay; many others do not and will now continue to drive without liability insurance or driver’s licenses because they cannot afford the gouging the state is attempting to impose.
Doesn’t a notice of a fine or fee that needs to be paid, fall somewhere under the definition of “due process?” The latest action by the OMV is further proof that the citizens of Louisiana aren’t necessarily allowed due process by their state laws. Who knew??
One of the most damaging crossings of that Rubicon (due process) occurred some decades back when the judiciary, in it’s infinite wisdom, decided that in misdemeanor cases where no incarceration was incurred, courts need not empanel a jury to hear the case which would then be decided by a judge. Supposedly because of the expense and inconvenience. This makes a mockery of the constitutional intent that a jury is to decide both the case and the law (a jury of your peers). Lest anyone think a jury’s right to decide the law doesn’t exist, it’s in the La. Criminal Code. It was the intent of the founders, by this trial by peers, that bad laws would not succeed. This existed nationwide. It’s one of the reasons that Prohibition had to be repealed; in far too many cases prosecutors were unable to get convictions due to juries deciding against the law.
Since then the legislature and courts have been free to abuse citizens with an increasing number of criminal laws, increasing criminality of the laws and increasing fines. Why? Not necessarily justice, but revenue. Once one abuse is gotten away with, others follow.
“…it’s in the La. Criminal Code.”
It could be in the La. Code of Criminal Procedure.
As a lawman in Louisiana for more than 20 years, I have literally witnessed 100s of letters from the OMV fall out of or been rifled through by law violating motorists as they attempted to find their insurance and registration. The OMV does send notice. The court sends notice. Coincidentally, 2 out of 10 folks stopped have the wrong address on their DL, registration or both. Maybe the State shouldn’t go back to 1986, but let’s remember this is the first honest attempt to collect debts owed. Sure, they’re going to be clerical errors. Let’s work through them and, hopefully, come out at the end with an effective, timely and efficient means of collecting unpaid fees. For every story of a clerical mistake, there are many more where in the violator you are bleeding for got away with a “no pay, no play” at fault crash. Wherein their only punishment comes from fines and fees, sticking the hardworking insured with a fight with their own insurance company to pay for damages and injury claim. I can go on and on, this issue is so much bigger and has so many more sides than “the man” vs. government.
I am as outraged as the other commenters about the OMV situation, but I have another take on some aspects of this matter. Many people feel that it’s ok to lay off state employees so that state dollars are not spent on their salaries. Then, when state offices are understaffed and service delivery is impaired, citizens complain. You can’t have it both ways, fewer employees and no loss of services. You get what you pay for.
So true. If you use the “strangle” budgeting method, government gradually becomes unable to do its job so the general public’s already negative perception is enhanced and it becomes easier to eliminate services or turn them over to private companies that can charge enough to turn a profit. Our naked emperor is a firm believer in this method.
Right on target as always.
The fact that ten years ago we had the most catastrophic storm in U.S. history devastate south Louisiana should automatically mean that anything before that date needs to be written off. Actually, I believe a year should be the limit, but even with the state playing hardball, stuff before Katrina needs to be dropped.
This is outrageous. I can understand the OMV’s need to collect fees, fines, etc, but that far back, is ridiculous….there should be a “statute of limitations”. Our state is in shambles….
I am confused. I thought it was the legislature that excluded OGB from being overseen by Donelon.
I am only responding about the lady who did not pay her fine in a timely manner. I am 65 years old and have received only one traffic violation ticket. Even though I was not familiar with the concerns at the OMV, I paid that fine right away. Makes you wonder, if she has so many unpaid traffic tickets, how many other bills are also left unpaid.
What can we do about this? My husband’s license was suspended over a vehicle we junked and didn’t turn the tag in…$525.
help!
“…a minimum fine of $300, up to $7500 and seven days jail time”
For an infraction of the traffic laws where no actual harm is done? Why would the ‘unusual’ in cruel and unusual not fit here? This is what happens when administrative execution of the law is allowed. They’re bent to other purposes, such as revenue production. Law becomes disconnected from safety and justice then attached to a business model for the production of cash flows. Your legislators as well as the state judiciary are complicit in this abuse of constitutional intent.
One of the more egregious and recent red flags giving notice the state was moving in unconstitutional directions was the statement from SPD that “driving is a privilege”, not a right. This gives rise to the question of where the state obtained the power to deny rights and assign privileges.
James Madison would be spinning in his grave.
[…] Hodge pointed to some commentary in Louisiana Voice: […]
When LSP proffered their pay raise to the Legislators in 2014, they had to provide a source of recurring revenue funding it. It was widely known and discussed that doubling administrative fines on insurance violations was overstated to look good on paper only. This gave the Legislature coverage to approve it even though it was highly questionable from a Constitutional perspective since just like the Edmonson Retirement Bill, they hijacked another bill to pass what amounts to a tax increase during a session when the Constitution prohibits it. When LSP went back this year it was akin to you projecting how much money you “plan” to make in a business asking an investor for funding. But of course, the Legislators passed it. Even if one-time collections paid this year, by approving the pay raise and it being implemented the state is now required to not only fund the raise, even if there is no revenue provided, but to also increase the retirement contributions. Their other choice is to lay off Troopers. Unfortunately, the way the system works, the most senior are the highest paid and most often promoted. It would take upwards of a 60% reduction in actual Troopers to make up the difference.
Edmonson is trying to rebuild his image and on his behalf the Louisiana Sheriffs’ Association is politicking for him to be reappointed by whoever the new Governor is. He still envisions a Lt. Governor run in the future so he can’t just use money originally destined for other agencies. He ensured his employees got what some indicate are up to 40% increases, some at the highest levels. Since other agencies employees saw no salary increases, causing them to reduce their budgets to pay for the raises at LSP probably isn’t very smart politically for Edmonson.
Jindal knew all this over a year ago. During his trip to the US Border in early August 2014 he reportedly told Edmonson in a discussion overheard by a high ranking LSP officer also there, Edmonson better hurry and implement the raises before everything started crashing and he would lose them.
We already see how the “Jindal Doctrine” impacted the Office of Group Benefits when they scrape for money because of self created crises. They have entirely privatized what once was a financially stable and productive operation. This was caused because Jindal raided the funds and when OGB and affected state employees and retirees complained, it disappeared. Now if you call for “Customer Service” you get a phone menu that does nothing but forward your call. There are no state employees you can reach. Every call goes to a private group, some who barely speak English. Who would you complain to if they were rude, unable to assist you, etc.? The only phone, email, contact information now is for media inquiries from a public affairs person. I guess you could leave a message for Jindal at the Des Moines, Iowa “Grub and Suds” but I hear he’s pretty busy trying to get rid of that pesky asterisk.
It is not out of the realm of possibility for OMV to begin operating this same way. Can you imagine the frustration of those who are receiving these letters having to resolve these within the same type system as the new OGB? “You’ve reached the Louisiana Office of Motor Vehicles. To pay an exorbitant fee whether you owe it or not press 1. To frustrate you until you press 1, press any other number. Your call is important to us. Your expected wait is 3 days.” At least the background song will be Edmonson’s favorite… “Take the Money and Run”.
Put nothing past Jindal, and Edmonson will do whatever the Louisiana Sheriffs Association tells him, and what helps him, even if it hurts LSP or our citizens.
Where are the Legislators who should be providing oversight? “You’ve reached the Louisiana Legislature. You’re call is very important to us. To hear a message from your Legislator telling you how great they are, press one.”
Thanks, jwpatrick1. The statute is the real culprit here. Please read the statute that provides for the assessment of these “fees”. You notice I said “fees”, not “fines”. The potential fees are assessed after your insurance company notifies OMV that your insurance has lapsed. This is not a “fine” for driving without insurance, which happens to be a traffic violation. This potential fee is based upon the presumption that you have not procured insurance, you still own the vehicle, and you are still driving the vehicle. In order to avoid the fees, you have to prove that you have timely procured insurance, sold or donated the car(and turned in the plate), or that you are not driving the car. Mind you, they have not proven that you still own the vehicle and are still driving the car, it’s just “presumed”.
Many of us law abiding citizens believe that this is the way to get the uninsured off the streets or to force them to get insurance. Actually, in many instances it causes an opposite affect. Many folks can’t afford the insurance and the reinstatement fees, so they do nothing and take their chances. Unless, they are pulled over for a suspected traffic violation, involved in an accident, or caught at an insurance checkpoint, they continue to drive.
Also, there is a deeper problem with the older violations, if the presumed violator still lives and drives in this state. Lets take a violation that happened six years ago and this person has gotten one of these letters and he has a valid driver’s license. Sometime within that six-year period he/she had to renew their license. Was not their license flagged for the violation?. So how did they renew without taking care of the other issue first? Just wondering. I am sure some of these people also registered new cars. Just asking.
I only used the term “fine” to note that fees would simply cover the actual cost of providing the service. The “fees” are punitive rather than service oriented. The reason they prefer “fees” is that you couldn’t charge someone twice. There is a cost for maintaining the system and the employees to perform the service but it is far less than projected revenue, thus the additional being used for salaries. Not only is it arguably a “tax” it was implemented during a session that prohibits tax legislation. That was the point I was making with it actually being a “fine”. Originally the intention was to provide OMV service but they have scaled that back to privatize it. Questions remain regarding relationships between DPS and those private companies. Did OMV reduce service so that after enough complaints they could privatize more of their operation to benefit the companies at the expense of the citizens? I don’t know.
Having worked for the legislature for 25+ years, I clearly agree with your reasoning. You are correct a fee is an assessment for a service provided. Once that fee amount drastically increases far and above the cost of providing the service, it becomes a tax. As you know the legislature did approve measures to allow public safety to contract with private entities to do license renewal and other functions performed by OMV. But, what is lost in all of that is, yes, you don’t have to stand in a long line, however, you have to pay an enormous “convenience” fee. That is the cost to the private entity to provide the service. Their profit. I have ran across a lot of people who prefer to stand in the long line, rather than paying that enormous fee on top cost of the service provided.
Also, had an interesting conversation with someone about HB638. The legislation defined these “fees” as a debt owed. But, if these assessments are fees, how can they be defined as a “debt”. A fee is an assessment for a service provided. No service has been provided under R.S. 32:863 or 863.1. So, how can you owe OMV anything, if they have not provided you with a service? Just asking?
I heard about this on Moon Griffon. My spouse and I returned back to LA from TX and we went to get our license at the DMV only to learn that my license was blocked. It showed that my insurance was cancelled on 6/6/12 on one of the vehicles. That was not true. They asked if I could present an insurance card for this date. I went to my vehicle and had cards from 2008 to present date but could not locate that particular time (6 month). As I told them why would I drive without insurance and TX give me a license? Excuse they gave me was TX will give license without insurance. Wrong!! I was told to have something faxed to the DMV by the insurance company. Went to the vehicle called and had them fax the exact information request and I found my insurance card from 4/2012 to 10/2012 coverage for 6/6/2012. Went back inside the DMV and was told the information faxed was not sufficient and my card was not acceptable. This is frustrating. They tell you what to give them and then it is not correct. I will not pay an $850 fine as I know I had coverage at this time. I had the DMV call the insurance company to tell them exactly what they need. Learned that State Farm sent out these letters to their customers. Loyal customers of 32 years and the state wants to continue to take individuals time and money away from the ones that do the right thing. It took half a day to work on this and will not be cleared up till next week according to the insurance underwriters who say that now they have people sending letters out daily to correct this 1.2 million letter error!!! Costly mistake.
My daughter was out of the country for two years at a sustanable farm in the jungle, dmv response,, forewarding address and check status on line. An address,,, third coconut tree from big rock! Guess she needed professor there to get internet with a flyswatter and a mango branch! I so hate this state, it is a dismel soul sucking vacuum
Be glad you are not in Missouri. An elderly lady there was handcuffed, taken to jail because of no insurance. State Farm was called and confirmed she had insurance. She was let out of jail.
If someone from Louisiana has to pay a fine for not having insurance since 1980, the 500$ fine is still less than the 35 years of insurance which could have cost tens of thousands.
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