Economic Incentives to Florida Cities: Con ict of Interest and Needed Strategies in Reducing Florida’s High Crash and Fatality Rates

• Main Authors: Barbara Langland-Orban, Seena Salyani, Etienne E. Pracht
• Format: Article
• Language: English
• Published: University of North Florida 2005-07-01
• Series: Florida Public Health Review
• Online Access: https://digitalcommons.unf.edu/cgi/viewcontent.cgi?article=1017&context=fphr

Half of the ten metropolitan areas in the U.S. with the highest traffic fatality rates are in Florida. Crashes and fatalities are reduced through engineering, education and enforcement. Florida’s road infrastructure (engineering) requires a significant investment due to decades of population growth. This study analyzes the economic incentives given to police officers in Florida cities to use traffic citations (enforcement), in the absence of incentives for engineering or education to prevent crashes and injuries. Florida’s high traffic fatality cities and counties are analyzed to assess the impact of citations on traffic crashes and automobile insurance premiums. In Florida, police pensions in participating cities receive a premium tax on automobile insurance policies written within city limits. A 1999 amendment to Florida law requires that increased premium tax collections must fund “extra” police pension benefits. Consequently, city police officers financially benefit when automobile insurance premiums increase from increased crash and/or citation rates. The automobile insurance premium taxes disbursed to Florida city police pension funds increased from $42.1 million in 1999 to $61.5 million in 2003. A chi-square goodness of fit test indicates that the growth rate of the premium tax revenues increased significantly following the 1999 amendment (p < 0.001). Florida city residents paid 46 percent more ($2.3 billion) for automobile insurance in 2003 than 1999. Analysis of Florida’s high traffic fatality cities (Fort Lauderdale Jacksonville, Miami, Orlando, Tampa, and St. Petersburg) indicates that automobile insurance premiums per 1000 population substantially increased in each city after the “extra” benefits legislation was passed. Crash rates remained high from 1999 to 2003 and increased in three of the six cities. The relationship between traffic citations and crashes was analyzed for Florida’s high traffic fatality metropolitan counties (Broward, Duval, Hillsborough, Orange, Palm Beach, and Pinellas counties). From 1997 to 2003, traffic citations increased in five of these six high fatality counties. However, statistical analysis did not identify a relationship with crashes, such that changes in the number of citations written did not have a statistical relationship to changes in traffic crashes, i.e., traffic citations did not reduce crash rates. Thus, citations increase insurance rates in the absence of reducing crash rates. The amended Florida law creates a conflict of interest since police officers financially benefit from increased citations and crashes, and insurance companies benefit as well. The public choice theory of economics is used to explain why special interests can take precedence over public interests. Economic incentives should be realigned to eliminate perverse conflicts of interest and reward reductions in traffic crash, injury and fatality rates through effective prevention methods, which include roadway infrastructure improvements.