Article from: www.thenewspaper.com/news/35/3563.asp
8/19/2011Tampa, Florida Incentive to Increase Automobile Insurance Rates
Tampa, Florida installs red light cameras as police pension contributions begin to sag.
The city council in Tampa, Florida this month began deciding how it would spend revenue from the red light camera program expected to go online next month. Officials calculated that the automated ticketing machines would bring in an extra $2 million a year, an important amount for a city facing a $34.5 million budget deficit.
Police Chief Jane Castor had proposed to the city in March that it sign a contract with American Traffic Solutions. Castor and members of her department personally profit from any ticketing system linked to an increase in automobile insurance rates. This is so because the state imposes a tax on car insurance that is deposited as a "state contribution" in each municipality's police pension fund. Based on city figures, the 0.85 percent tax pumped an extra $8,158,217 into Tampa police pensions from a total of $1 billion in added insurance costs paid by Tampa drivers between 1999, when the current system was imposed, and 2009.
The primary source of that premium increase has been the boost in the number of traffic tickets issued by Tampa police. In 1999, the city wrote 30,000 citations. Just four years later, there were 87,000 tickets -- and a 40.6 percent increase in insurance premiums. By 2005, the ticket total was a whopping 140,000.
The extra cash reduced the amount individual members had to contribute to the pension fund, leaving officers with more take-home pay. In 1999, officers paid 6.45 percent of their salary into the retirement fund -- about equal to the average rate paid over the past 27 years. Thanks to the influx of new cash, the rate dropped to 1.8 percent in 2002. In 2006 it was 1.18 percent. Stock market turmoil and investments turned sour, however, raised the contribution required significantly above the average in 2004, 2005 and 2011.
The Tampa Police Department has been sued over traffic ticket quotas and the mandatory practice of issuing a traffic ticket at the scene of any accident, even if the attending officer had no way to determine fault. By 2008, the lawsuit forced Tampa Police to change its ticketing policy and the insurance premium tax declined accordingly in 2008 and 2009.
Comprehensive, independent studies show red light cameras can cause a an increase in the total number of accidents at the intersections where they are installed (view studies). This would result in an increase in police pension funding, according to a 2008 red light camera study by the University of South Florida.
"Increases in crashes can raise the risk rating of drivers in a community, which can lead to disproportionately higher automobile insurance premiums, and, subsequently, rising profits for insurers," the researchers concluded (view study).