So, remember when thousands of homes across the state lost all their value due to crumbling foundations? Of course you do. However, what you might not know is how our lawmakers plan on making things right again.
Want to guess how our state will pay to fix all those houses?
Fox 61 reports that the House passed a bill approving a $12 surcharge on all homeowners to pay for repairs. Actually, the original amount was $20. Lawmakers later dropped the amount to $10. But, surprising absolutely no one, they bumped it up to $12 before giving it the green light.
The bill passed 97-to-42 and now waits on the Senate.
Tim Heim, founder of The Connecticut Coalition against Crumbling Basements, expressed mixed feelings about the solution. Sure, he’s happy that the state finally acted on this. But, he thinks this lets insurance companies off the hook.
“Insurance companies need to be investigated and they also need to be mandated. If people aren’t happy with the $12 surcharge then what they need to do is call their state rep and call their senator and demand that they support that insurance companies be mandated to pay for this.”
Makes sense. Pretty smart of him to acknowledge that some people honestly won’t support the new fee. Especially since it’s not even the lawmakers’ fault that this happened.
The crumbling foundations problem first surfaced in the 90’s. Eventually, investigators traced the source of the issue to a Willington quarry. The quarry used pyrrhotite, an iron sulfide that dissolves when exposed to water.
Makes total sense to use it on a structure that’ll face rain and snow for roughly 30 percent of any given year.
Despite having proof that the quarry and concrete maker built homes using faulty material, insurance companies say they don’t have to cover the damage.
The issue is simple: Connecticut is the insurance capital of the world. Despite that, it turned its back on those in need and with little protest from legislators.
Instead, insurers said unless homeowners allow their houses to completely collapse they won’t cover the damage. Apparently, they said their policies clearly state that a house needs to abruptly fall down to qualify for coverage.
Excuse me, what? No wonder why these homeowners took those insurance companies to court.
Ryan Barry, a lawyer for the plaintiffs, expressed his dismay to Insurance Journal:
“These houses are all in state of collapse! You shouldn’t have to wait for the house to fall into rubble, to cave into itself, to qualify for coverage.”
Despite that, our politicians seemed noncommittal on the lawsuit. Instead, our representatives worked to find additional revenue to help the homeowners.
Governor Malloy famously pleaded with FEMA to assist the affected families. However, the feds shrugged and claimed that the foundations issue didn’t meet their definition of a disaster:
“The crumbling foundation conditions experienced by individuals does not appear to constitute an emergency or major disaster. Rather, this appears to be a consumer product or construction safety issue, something which FEMA has previously not treated as constituting an emergency or major disaster incident as contemplated by the Stafford Act.”
This makes absolutely no sense considering over 30,000 people now own worthless homes out of no fault of their own. In my eyes, this is a major disaster. They didn’t see this coming.
And, worse yet, the insurance companies to the quarry to the concrete maker washed their hands clean of this because our lawmakers, again, turned to the taxpayer.
So, should the senate pass this ruthless bill, each homeowner must pay $12 to fix these derelict foundations.
The law also leaves room for rate increases, which we all know will happen once implemented. Look at the gas and income tax if you need inspiration. Once we pay our $12, nothing will stop our lawmakers from raising the price each year.
With no cap, there’s no guarantee the surcharge won’t hit $50 per family down the road. The reason why people fear this is because all the money raised from the surcharge will be directed into an unprotected relief fund.
It’s no secret our state has a history of mismanaging money. Our lawmakers consistently approve raiding other funds to pay for unrelated projects.
On a related note, our lawmakers swept funds given by our federal government to help homeowners affected by the crumbling foundations. Our state received $1,000,000 and lawmakers swept $750,000 of it into another housing fund.
Our state has an extensive history of sweeping funds from other accounts to pay off other debts. There’s an explicit reason why our pension and transportation funds face insolvency.
The way our state spent the settlement money from the tobacco industry also demonstrates how our state mishandles money. After successfully suing Big Tobacco for smoking related health complications and death, the state received $2 billion over the course of 15 years.
But, instead of directing the money toward anti-smoking measures, which was what the money was intended for, the state used the cash to balance the budget.
So, that’s why a good amount of taxpayers oppose the surcharge. Looking at our history, they feel they cannot trust the legislature with the money.
And those worries have already been validated. Our lawmakers already confirmed they will direct 15 percent of the surcharge funds towards other housing issues.
For example: a portion of that surcharge money will go towards houses in need of remediation due to radon and lead paint. Also, the money will go towards sinking houses in New Haven.
Right off the bat, lawmakers began divvying up the surcharge meant for houses with crumbling foundations. It already begs to question how much more will they cut from the pie.
So, are taxpayers happy that they have to pay for these foundations? Absolutely not. While we express sympathy for the affected homeowners, we know the surcharge is only a band aid.
It’s not a fix.
A fix that will eventually become another fund ripe for raiding.
How should our lawmakers have handled this disaster? Is it right that homeowners should pay for the crumbling foundations? Or, should our representatives have fought harder to make the responsible parties pay up?