Snyder, Duggan working on Detroit auto insurance reform
Detroit — Gov. Rick Snyder said Thursday he's working with Mayor Mike Duggan on reforms to the state's auto insurance laws that would help lower the high costs of premiums for Detroiters.
"The mayor and I have had a lot of different discussions on insurance," Snyder said at a Pancakes & Politics breakfast forum at the Detroit Athletic Club. "We've got to do something to improve the cost of auto insurance, particularly in Detroit. It's tough, harder than anyone would like."
The governor later declined to detail any specific proposals he and Duggan are working on.
"That's still in the formulate stages," Snyder told reporters.
Duggan has said he wants to create a city government insurance company to offer lower-cost insurance than the plans sold by private insurance companies.
Snyder was cool to that idea.
"I think that's challenging to create your own insurance company versus saying are there ways to get insurers to be more proactive in Detroit," Snyder said.
Duggan spokesman John Roach said Thursday the mayor is "working closely" with the governor and lawmakers "to provide more affordable auto insurance rates to Detroit drivers," but declined further comment.
But the talks between Snyder and Duggan on tackling high auto insurance rates come as the Republican-controlled Senate is fast-tracking legislation that would reduce payments auto insurers make for medical expenses of injured drivers and create a new catastrophic claims fund.
Drivers in Detroit's 48227 ZIP code pay the highest auto insurance premiums in the country for a 2014 Honda Accord at $5,109 per year, 130 percent more than the statewide average for that particular vehicle, according to a January study of average rates by CarInsurance.com.
Snyder said he wants to incorporate Detroit auto insurance reforms with statewide relief for drivers in Michigan, who shoulder some of the highest rates in the country because of the state's limitless medical benefits for motor vehicle accident injuries.
"It shows there's a lot of interest in moving something on this topic, and I hope we can make some progress in terms of some relief for auto rates both for Detroit and for Michigan," Snyder said.
Snyder was the featured speaker Thursday at the Michigan Chronicle's second Pancakes & Politics forum of the year. He focused most of his remarks on urging attendees to vote "yes" on the Proposal 1 sales tax increase on the May 5 ballot.
If approved by voters, the sales tax would increase from 6 percent to 7 percent and the state's gas tax would be modified to guarantee all taxes on fuel are dedicated to roads, Snyder said.
"This is not a Democratic or Republican issue. This is an issue (of) do you want safer roads or not?" Snyder said.
The governor reiterated his contention that the Republican-controlled Legislature has no Plan B in the event voters reject Proposal 1.
"The other plan is doing nothing," Snyder said. "Doing nothing is dumb. So let's just get it done."
Lon Johnson, chairman of the Michigan Democratic Party, attended the breakfast event and said Snyder is doing a "horrible" job selling the tax increase.
The $1.8 billion tax cut Snyder gave businesses in 2011 and $1.5 billion increase in individual income tax bills through the elimination of popular tax credits and deductions may help sink Proposal 1, Johnson said.
"Voters are frustrated that they're increasingly seeing individuals bear a higher cost of operating our government while corporations are seeing their share decrease," Johnson told The Detroit News. "I think it's going to fail ... by a very wide margin."