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March 31, 2009

Beshear Will Do Anything for Mongiardo

In our earlier musings about whether Beshear and Mongiardo really want anything to do with one another, we missed an important point. Fortunately Page One Kentucky is always there to find it.

Apparently Beshear is so in favor of Mongiardo's Senate campaign, he's willing to break the law to tell you about it. See/read it here.

Let's see if also-Senate-wannabe Jack Conway has the initiative to refer this one out for prosecution. His predecessor would probably recommend a grand jury.

Still Ignoring the Big Problem

As the media and General Assembly buzz about budget-related special sessions, there is still no discussion about the one issue that must be addressed for the state to improve its financial footing.

The state's pension system is still at least a $30 billion unfunded liability, and that liability was only worsened by legislative action in this session. If the paltry reforms of last year's special session was one small step forward, this session saw two steps back. The only discussion about the gross betrayal of the commitment made in ES08 HB 1 is how to abrogate it wholly.

The state pension system provides benefits to retirees that dwarf what can be found inthe private sector, and even Herald-Leader anti-business columnist Tom Eblen has noticed:

Public employees have been shielded from some of these market forces, but taxpayers are demanding that change. Generous government retirement plans are no longer affordable.

Part of the problem is that the system has allowed many state employees to retire at 50, as a childhood friend of mine did last year. During the special session, the full retirement age for newly hired employees was raised to 57.

State Sen. Charlie Borders, a Grayson Republican who frequently speaks about pension reform, thinks the full retirement age should be 62. "Life expectancy is increasing," he said. "For people age 50 and 55 to be able to retire, I just don't think that's acceptable."

Retirement at 50 or 55 might make sense for people in dangerous public safety jobs or those whose work involves strenuous manual labor. But for most state employees, who work in offices and use their brains more than their backs, it's hard to justify.

Eblen even points out that the state pension system is a contributor to Kentucky's low life expectancy:

A 2005 study of Shell Oil employees, published in the British Medical Journal, found those who retired at age 55 were 89 percent more likely to die within 10 years after retirement than those who retired at 65. The results didn't vary significantly by gender or socioeconomic status.

This really is just about the most pressing issue facing the commonwealth. It's the most irresponsible thing our leadership regularly practices, and it's apparently killing people. It's time to do something more than a feel-good special session that does little followed by a feel-good regular session that rips apart the paltry reforms enacted.

March 30, 2009

KyCFG PSA: Stock Up Before the Tax Hike

The taxes on alcohol and cigarettes go up on Wednesday, April 1st thanks to our legislators.

Shop today and tomorrow and then raise a toast Wednesday!

One Spending Reduction

We've written a few times about the 2009 session being, on the whole, a failure.

Governor Beshear has been putting out press releases about what he considers the legislature's accomplishments, and we've apparently overlooked one significant cost savings: letting parole violators out of jail as soon as possible.

From his press release:

Additionally, Gov. Beshear signed into law House Bill 372, which credits time on parole toward completion of an offender's sentence, unless he or she had been returned to prison for the conviction of a new felony or had absconded while on parole. This measure codifies language in the current biennial budget.

This provision is being applied to inmates who have served time on parole and are back behind bars due to a technical violation, and offenders who are currently on parole. Inmates who are classified as violent offenders or who must register as a sex offender are ineligible.

The measure will save an estimated $15.4 million by the end of this fiscal year, and is expected to save more than $16 million in Fiscal Year 2010.

Parole is no longer a probationary period that is earned. Now it's the exact same as serving your sentence, just not in jail.

The Problem With Tax Incentives

The abrupt ending of the session this year brought the pleasant death of two unwanted bills.

The first would have added a second driving tax to Kentuckians, adding tolls to tax drivers (HB 102) in addition to the gas tax hike (HB 374) the general assembly did pass.

The other was HB 229, a collection of tax incentives and credits for training and hiring workers, capital investment and reinvestment, agribusiness startups, technology industry headquarters location, locating in certain counties, partnership with state universities, prolonging existing credits that are set to expire, rehabilitation of historic structures, IT startups, lodging facilities, theme restaurants, and Hollywood films.

It's a ridiculous list, and its length points to the fundamental problems with tax credits:

  • They pick winners and losers. If you're on this list, Kentucky's tax code doesn't apply to you. If you're not on this list, you are at a disadvantage to anyone who is and is not burdened to support the ridiculous spending of our government.
  • This incredibly long list is a blatant admission that Kentucky's tax system is burdensome to job creation. If your legislators think such a long list of exemptions is necessary to attract businesses to Kentucky, they should also realize the corollary idea that Kentucky's tax system is currently unattractive to new business: if our tax system worked, they wouldn't be working so hard to change it for their favorites in the name of economic development.

The end result of passing such a bill is this: the legislature would be admitting the tax code is broken but only fixing it for those with good lobbyists.

Unfortunately, that's too often how Frankfort works.

March 28, 2009

Beshear Hides Endorsement of Dr. Dan

Yesterday there was big news in the commonwealth. We all knew it was coming. The Herald-Leader had a dedicated section up on their website by midday. ESPN's Pat Forde wrote about it Thursday night.

We weren't necessarily sure what the announcement was, but we knew that there would be an announcement about Kentucky's basketball coach.

And anyone who knows how news works around here knew it would take up every minute and column inch that didn't contain the weather or the result of Louisville's Sweet 16 game.

Now there's ample evidence that Mongiardo doesn't quite know how to run a campaign, but just about anyone would know that yesterday was about the worst possible day to have an important announcement.

We have no doubt that Beshear meant to bury his endorsement of Dan Mongiardo for US Senate. Not only did he bury it under the announcement of Billy G's firing, he sent it as a press release while he was out of town. We're not sure why the Governor would want to hide his allegiance to his Gov. Lt., but it is certainly interesting commentary.

UPDATE 3/30: PageOneKy puts forward a different perspective by looking at WHAS's latest poll showing Governor Beshear's dismal numbers in Eastern Kentucky. Maybe Beshear buried the endorsement as a favor to Mongiardo. Beshear certainly has a dismal record participating in elections other than his own.

Either way, that's a lot of work to put such distance between two people joined by a slate.

March 27, 2009

Conway Forecasts Throwing Hat

Speculation that Kentucky Attorney General Jack Conway will enter the race for a US Senate seat is high. Recently he told Pat Crowley quite simply:

"There's a good chance I'll run for the Senate."

With the Kentucky legislative session over, we would expect an announcement soon, before the Commonwealth's attention turns to the Kentucky Derby. Conway confirms:

"I've been saying all along I owe Kentucky voters my best effort at attorney general ... so I'm going to get through the (legislative) session. And I'll say something in the coming weeks."

Conway is in many ways a candidate like President Obama: his personal beliefs lean hard to the left, but he has very little record to pin him down with. He is likely to be able to say just about anything in the campaign without fear of losing his admirers on the left.

He will face tough competition from Gov. Lt. Dan Mongiardo, who may be a weaker candidate, but has run before, has better name ID and is said to be a harder worker.

Joe Gerth Needs Column Ideas

Courier-Journal columnist Joe Gerth's most recent offering is strange. Frankfort was winding down one of the worst sessions for taxpayers in recent memory, persistent problems like the state pension liability were worsened, the US Senate campaign is heating up, people rallied against government spending in Tea Parties around the state, yet Gerth found inspiration in none of this.

Instead, he wrote about a useless study that attempted to generalize about the importance of newspapers by analyzing a single election, a faulty bio someone wrote about someone else, and basketball brackets.

His editor was so underwhelmed the he even added an extra apostrophe for kicks:

(Editor's note: See the bracket's HERE)

Someone send this reporter/columnist some inspiration.

March 26, 2009

House Adjourns

Page One Kentucky reports that the House has adjourned, and includes this amusement:

UPDATE: We hear from Republicans that Larry Clark stood up during the leadership meeting with the Governor (after he said over and over how badly we needed the two bills he was pushing) and said:

"What about this do you not understand? We're adjourning!"

Cathy Flaig to Challenge for Boone County CJE

Pat Crowley has reported that Boone County Commissioner Cathy Flaig will challenge for Boone County CJE in 2010.

Many in Boone County have been disappointed in the current administration after a year of trying to raise property taxes and failing due to carelessness; and trying to impose a new parks tax and failing due to its overwhelming unpopularity.

This record will be difficult for current CJE Gary Moore to defend, especially against a strong fiscal conservative like Commissioner Flaig.

Local Democrats are apparently hoping for a fiercely contested primary, but the 67%-33% defeat of Moore's parks tax may suggest that voters already know which way they'll vote.

Whether to Uphold the Rules

In one hour, the House Democratic Caucus will meet and decide whether to break one more promise to themselves and Kentuckians before they end this session.

Earlier we noted that the House passed rules that declare the two day period at the end of session will only be used to consider vetos put forward by the governor, not any legislation that has not yet passed the legislature.

House Democrats are divided into two camps: those who want to stick to the rules they made for themselves, and those who think that they're paid to legislate and legislatin's what they should do.

Republicans don't count, according to Speaker Stumbo.

Here's how some of the opinions break down with 2008 rankings added.

From the Courier-Journal:

Rep. Tim Firkins (#95), of Louisville, said the rules were put in place earlier this year to prevent political games from being played in the final hours of a session.

"I support (Stumbo's) position that there probably wouldn't be any damage done to deal with the issues still hanging out there come January," he said.

But Rep. Tom Burch (#96), of Louisville, said legislators ought to continue doing the business voters sent them to Frankfort to do.

Rep. Robin Webb (#69), of Grayson, said it wouldn't matter to her either way, but she personally plans to vote to continue passing legislation.

"I feel like we've got two more days to do business, if there is business that needs to be done I'd vote to suspend the rules," she said. "I think the main thing the caucus wanted was to have input into the process."

From Mark Hebert:

Larry Clark (#62) and Greg Stumbo (#88) say there's no emergency. They want to stick by the House rules and go home.

The Owensboro Messenger-Inquirer reports that Sen. Dorsey Ridley (D-Henderson, #31) is lobbying the House to break the rules so that can create tolls and give away tax dollars to special interests:

"I am writing in hopes to gain your support for HB 102, regarding the bridge authority bill, and HB 229, regarding the economic development incentive bill," Sen. Dorsey Ridley wrote in an e-mail sent today to western Kentucky lawmakers. "Please request House Leadership to allow action to be taken on these pieces of legislation."

Leadership out in that part of the state like to build roads even when the governor and the courts call them "patently unnecessary". We expect citizens of Western Kentucky are as eager to be tolled for unnecessary roads as they were thrilled that so many of their legislators voted to hike gas taxes.

The Herald-Leader quoted Rep. Bob Damron (D-Jessamine, #34)

House Majority Caucus Chairman Bob Damron, D-Nicholasville, said House leaders felt that the membership should decide whether to suspend the rules that the group worked so hard to implement in January. There are many people in the House who feel the rules should be followed, Damron said.

"They put some fairly significant rules in place," Damron said. "I suspect that they would want to keep them."

We'll see in an hour.

Skybar

Apparently state law requires all licensed bars to have an entrance on street level. Interestingly, the law dates from the 1940's, not prohibition.

There are bars existing and planned that violate this rule, and it inhibits entrepreneurs from providing some nightlife with a view. Sen. Gary Tapp is attempting to remove this requirement. He will not be able to if the House is at all serious about upholding their new rules. Fortunately in this instance, the rules rarely stop the House.

March 25, 2009

More Kentucky Tea Party Links

The Herald-Leader did a short write up with a good headline: Tea Party protest draws big crowd in Lexington.

Leland Conway has audio and over 400 pictures.

A mathematical estimate of the 1000+ crowd size.

March 24, 2009

Tea Party Pictures

Here are some pictures from the Kentucky Tea Party Saturday. We'll do this in two batches. This one will be of the crowd and speakers. The next will be signs from the rally.

The crowd started showing up early.
CrowdGathers

Long lines formed to petition Governor Beshear
SigningPetition

All ages participated.
TheFuture

The crowd grew.
EarlyCrowd

One television station showed up
OneTelevision

More after the jump, including photos of speakers...

It seemed that every other person took the time to make a sign.Signs

Thiel Audio President Kathy Gornik spoke (watch her speech here)
KathyGornik

Kentucky Club for Growth Executive Director Andy Hightower
AndyHightower

Gatewood
GatewoodSpeaks

And rally organizer Leland Conway
LelandConway

A Good Idea is Likely Just Theater

We were excited to read this headline in the Herald-Leader:

Legislature may not consider any more bills this week

What a good idea. They've done enough.

What is ostensively preventing further activity are rules the House passed this year that forbid consideration of any legislation in the veto period, and would only allow votes on overriding the Governor's issued vetos.

While Bob Damron (D-Jessamine, 2008 Rank #32) thinks the rule may be followed

There are many people in the House that feel that those rules should be followed, Damron said.

"They put some fairly significant rules in place," Damron said. "I suspect that they would want to keep them."

Speaker Greg Stumbo (D-Floyd, # 88) says he will put the issue to a vote.

Given their record on breaking promises this session:

  • Reneging on ES08 HB 1, the promise to adequately fund the pension system, by borrowing $50 million from it (HB 143) and delaying the payments into it (HB 117 and discussion).
  • Voting to suspend the mechanism that had promised gas tax relief to Kentuckians and hiking the gas tax four cents (HB 374).

The promise to conduct themselves by these rules is one more that likely won't stand up to the desire to tax and spend on the part of our legislators in Frankfort.

March 23, 2009

Herald-Leader Diminishes

Despite our differences, we are truly disappointed that the Herald-Leader is reducing its reporting staff. Whether they're investigating something we feel is a true public interest or we feel they're missing the point, they are generally the source of the material or at least the discussion, not us.

Our best regards to the reporters and other staff who have left the paper, we wish them well in new endeavors.

More on the Kentucky Tea Party

There's a bit of write up this morning about the Tea Party and some complaints about a lack of coverage in the mainstream media.

Kentucky Progress points out that the Kentucky Kernel covered it while the Herald Leader was busy cutting staff.

The Bluegrass Institute for Public Policy Solutions has a video of the speech by Thiel Audio President Kathy Gornik.

The Conservative Edge wonders why local TV stations chose to ignore their customers, and vere loqui sees further example of media bias.

More to come...

TWO MORE: Instapundit blogs on Orlando, Lexington, Raleigh, and Connecticut.

We've figured out how to find WTVQ 36's short report.

AND ANOTHER: Photos from the 'We Surround Them' meetup group.

March 21, 2009

Lexington Tea Party

We had an incredible rally today in downtown Lexington. Over 1,000 people came to demand responsible spending, less debt and lower taxes. We'll have pictures and a recap of the day's events very soon. Thanks to everyone who came and joined our rally.

UPDATE: Kentucky Progress has their first post up.

The Conservative Edge wrote about the Tea Party's success.

Pictures from the Enraged Conservative.

More pictures.

March 20, 2009

Ready to Rally??!!!

Tomorrow. 12 noon. Lexington Courthouse Plaza.

SEE YOU THERE!

Obama's Mission: Taking from Those He Deems Can "Afford" It

From the Washington Times via the Club for Growth

President Obama told Californians during a campaign-style town hall meeting on Wednesday that rich people can afford to pay higher taxes in selling his budget plan as an investment in the nation's future.

Mr. Obama pushed back on people who say he is overtaxing the nation, saying his tax increases on families earning $250,000 or more a year are reverting to the tax system under former President Bill Clinton. The president added he will pay higher taxes himself as a result.

"These folks can afford it. They were rich back in the '90s," he said. "It's not like suddenly they're going to have to go to the poorhouse. But what that does is it allows us to pay for health care reform for a lot of people."

Going after a line of attack Republicans have used against him, Mr. Obama insisted, "I don't think that's unreasonable. I don't think that's socialism."

Kentucky Lags Southern Neighbors in CEO Survey

A poll of 543 CEOs placed Kentucky squarely in the middle of state rankings for job growth and business.

Kentucky ranked 23rd in this year's survey, which may sound OK, until you realize the top 5 are other southern states: Texas, North Carolina, Florida, Georgia and Tennessee. Virginia, South Carolina and Indiana also make the top 11. Alabama ranks 14.

Kentucky does score higher than West Virginia, Mississippi and Louisiana, but West Virginia is improving its business environment, as is Louisiana.

Meanwhile, Kentucky is hiking taxes and failing to address future liabilities.

Are you tired of being last?

March 19, 2009

Representative Hall Choses SEC Tourney Over Elected Duties

Page One Kentucky follows up on their report that Keith Hall (D-Pike, 2008 Rank # 61) skipped a couple of days of votes in order to attend the Men's SEC Basketball Tournament in Tampa.

An Appalachian News-Express article following up on Page One's report says:

Hall said he left Frankfort last week under the impression nothing important was going to occur Thursday and Friday...

It seems a safe assumption that Frankfort would not be up to any good, but if he's got more important things to do than execute the duties of his office, it's time for Hall to resign. Let's hope he intends to refund his salary to the taxpayers first.

Energy Diversification Divides Dems

KyWordsmith.com has posted an exclusive on Governor Beshear's swing through Western Kentucky. The site notes that Beshear is advocating the energy plan we mentioned below. What we didn't mention explicitly is that it is House Democratic Leader Rocky Adkins who is pulling the brakes on the measure.

Beshear emphasized the need for the House to vote on and approve legislation that would repeal the state's ban on nuclear energy, despite House Majority Leader Rocky Adkins' recent indications that he will not allow the bill to be voted on this legislative session.

Read the rest here.

Bits and Pieces

Newberry: After finding out Bluegrass Airport executives spend over $500,000 on personal items (and experiences) Lexington's mayor decided that it might be a good idea to audit other agencies. The Kentucky Club for Growth has another idea about where the city should look for wasteful spending, but we'll tell you about that later.

CATS is Gone: Since the General Assembly has finally recognized that CATS did not provide any useful information on the success of education in Kentucky and is moving on, obviously mass chaos ensues.

Robert Sexton, executive director of the Prichard Committee for Academic Excellence, says a lack of accountability during the interim is the principal weakness in an otherwise "very strong" bill.

"We'll be giving the tests for the next three years, but parents and the public will know nothing ... about whether a school is making progress or not vis-à-vis other schools and compared to the year before," Sexton said. "I think there will be lots of confusion."

We had a system in place that pretended to provide information about progress but didn't, and for the interim, it's replaced by no system that doesn't provide information about progress. It's confusing to write, but not so problematic in reality.

Stimulus Website: Governor Beshear has launched a website that has something to do with the federal stimulus, but apparently the website is short of useful information. As David Adams points out, the stimulus is certainly stimulating photo-ops for politicians proud of spending money off the federal credit card.

Energy Bill: A bill to improve Kentucky's energy production has been stymied because people who are for energy diversity aren't really for energy diversity, and the bill threatens to make Kentucky's state parks profitable.

Rand Paul: Rand Paul will appear at the Executive Inn in Lexington tonight at 6:30 as he may or may not be preparing for a Senate run. You are invited. Details Here.

March 18, 2009

More On Our Unserious Leaders In Frankfort

Ronnie Ellis' column is worth a read on this subject.

When the House last week passed a "technical budget clean up" bill, Rep. Addia Wuchner, R-Burlington, had the best line:

"I thought we were broke," Wuchner said during the floor debate.

If Wuchner was confused (who wouldn't be?) she must be forgiven. After all, the budget bill the House was "cleaning up" was a combination of cigarette and alcohol tax increases and spending cuts to cover a projected $456 million budget shortfall.

During that debate, sponsors and leadership warned lawmakers they might face an even larger shortfall in the next fiscal year which begins July 1. Some of them were already talking about a special session this summer and a push by backers of electronic slots at race tracks to pass that legislation to produce more state money without still more new taxes.

But here was the House, passing a bill which authorized new school construction - of indisputably dilapidated elementary schools, but some of which are very small and which the Kentucky Department of Education thinks should be consolidated into larger, more cost-effective schools.

A Gold Star for Wuchner (R-Boone, 2008 Rank #1)

Ellis later mentions the various projects tucked into this bill that increase spending.

In a year where the whole country is belt-tightening, the only activity our legislature can muster is more taxes, more spending and more debt.

March 17, 2009

Pensions Unreformed

Here's a headline we all saw coming:

Leaders: Cuts in contributions to pension funds might be needed

Senate President David Williams, R-Burkesville, first raised the issue of cutting contributions during a meeting with Republican senators yesterday.

"When we come back here next year a serious decision that we are going to have to talk about with the next budget ... the governor is going to have to make a decision on whether he's going to suspend the statute we passed only last year to make sure we can sustain ourselves if we make our actuarially required contribution."

Last summer the legislature passed a law that put the state on a 20-year timeline to get the pension systems back to full funding.

--snip--

Both Beshear and Stumbo said all options would be on the table.

"I would echo Sen. Williams' statement that we are not advocating that, we certainly hope it doesn't happen, but in these economic times everything may well be on the table and it may well be that we cannot meet those payments and function as state government without making astronomical cuts to human services and education," Stumbo said.

This is a serious issue, and these are unserious answers. We're a broken record about just how little our legislators care about the pension system. We said of the unraveling reforms of the special session:

ES08 HB 1 was a small step forward in dealing with the overwhelming pension liability facing the state. Of the main reforms, one was a commitment to responsible funding of pension plans. What was a small step forward in the first place is now slowly unraveling.

Instead of addressing the future liability by creating a new plan for future employees that would more greatly resemble retirement benefits in the private sector, the General Assembly chose to require adequate payments to support the plan as it is.

This year, they raided the pension fund for a $50 million loan (HB 143) and put off contributions into the pension system (HB 117). Now, they're not going to fund it as they promised in the special session.

The pension system is unsustainable, and none of our legislative leadership is serious about the issue.

March 16, 2009

A Physical Representation of the Largesse of the Bailout

The bailouts are old news now. I don't know where this originated, and you may have seen this before, but here is a graphic of how much space is taken up by $700,000,000,000 one-dollar bills...

That's not even half the bailout. $780 billion is about the size of one of the former world trade towers in New York.

Legislative Good Will = Wrecking the Commonwealth

There has been way too much written implying that this session of the General Assembly was the happiest session ever.

Page One Kentucky posts a ridiculous joint statement from Speaker Greg Stumbo and Senate President David Williams:

On Friday, Governor Steve Beshear, Greg Stumbo and David Williams released a joint statement:

"We have conferred throughout the day today about the remaining issues confronting this session, determined to end this process as we began it - with a spirit of cooperation and resolve to move forward.

...

This session began with a commitment to work together to address the significant issues confronting the commonwealth. Today, we are continuing to honor that commitment and move forward in a way that will create jobs and economic opportunities for more Kentuckians."

So everything must be all puppies and rainbows, right? Even Reginald Meeks is acting like everything is a-okay. We raised taxes on several occasions and instead of working together, both sides of the aisle sold out for personal gain. It's all good, right?

We've saved our budget and our economy and the state retirement system!

Oh, wait. We haven't done anything of the sort.

That's too right.

So far, they've created four new taxes (HB 236, HB 347, HB 144, HB 374). They've spent $400 million of a $214 million "rainy day" fund to avoid cutting spending. They've put off funding the retirement system (HB 117), and borrowed an additional $50 million out of it (HB 143). They've created such a hole, that they're taking about coming back to raise more taxes.

This could be the worst session in the recent history of the commonwealth, and it's time to stand up and say something about it.

JOIN US THIS SATURDAY!

March 13, 2009

Kentucky Tea Party - March 21 - Lexington

IT IS TIME TO ACT!

The federal stimulus, spending hundreds of billions of dollars we don't have; sending billions to states that are raising taxes anyway; bailouts going to companies that should be restructured instead of sustained; 9,000 earmarks being called 'last year's news'; proposals to tax energy until it's no longer affordable, to dispense with the secret ballot for union elections, to make the government the director of all health care, to double welfare spending...

It is an assault on the liberty that is very foundation of our national success, and it's time to say so.

The Kentucky Club for Growth, Leland Conway of WLAP in Lexington, the Bluegrass Institute for Public Policy Solutions, The Conservative Edge and others are organizing a Kentucky Tea Party in downtown Lexington.

Come down to the Robert F. Stevens Courthouse Plaza (corner of Limestone and Main) at noon on March 21st and let City Hall, Frankfort, and Washington know what's on our minds.

MARK YOUR CALENDAR AND DON'T MISS THIS OPPORTUNITY!

Don't be content with having this discussion among ourselves. We need to show that conservatives are still here and willing to engage.

Date: Saturday, March 21, 2009
Time: 12:00pm - 2:00pm
Location: Robert F. Stevens Courthouse Plaza

WE ARE ORGANIZING SO YOU CAN MAKE YOUR VOICE HEARD. We must remind everyone that national success follows from individual success, not government direction.

JOIN US! Bring signs, teabags, whatever your inspiration.

We look forward to seeing you there!

Kentucky Senate Passes New Tax #2

Yesterday, the Senate passed the second new tax on Kentuckians, passing HB 347 by a vote of 31-6.

HB 347 defines all sorts of digital property and places a new sales tax on it. Governor Beshear's Department of Revenue argues against itself, saying that they already have the authority to tax these transactions, and that if they don't pass the bill to tax these transactions, the state could lose $11 million in voluntary payments by vendors.

The upshot is that every small business and freelance creative on the web will now be burdened selling in Kentucky. Yes, this tax includes music downloads, buying stock photos and art, purchasing newspaper archives...

You may remember New York Governor Paterson's efforts to tax everything he could think of, even soda and strip club cover charges? Well, even he gave up on passing this tax.

The only six senators who were willing to stand up against a tax even Governor Paterson wouldn't push:

  • Sen. Katie Stine (R-Campbell, 2008 Rank #1)
  • Sen. Damon Thayer (R-Scott, #2)
  • Sen. Tom Buford (R-Jessamine, #5)
  • Sen. Jack Westwood (R-Kenton, #5)
  • Sen. Dan Seum (R-Jefferson, #7)
  • Sen. John Schickel (R-Kenton, new)

The Senate amended the bill, so the House must concur today. Call the House and tell them to vote against concurrence on HB 347! 1-800-372-7181

March 12, 2009

New Kentucky Blog: KY Wordsmith

We've added a new blog to our blogroll:

KY Wordsmith - a Drudge Report format collection of what's going on in Kentucky and Kentucky politics.

Williams and Bunning

Much ado is made about Kentucky Senator Jim Bunning's propensity to speak just what's on his mind.

It seems Senate President David Williams, who seems intent on running for Kentucky's Senate seat regardless of his opponent and met recently with the NRSC about it, might suffer from a similar malady.

Yesterday, he alleged to the Courier-Journal's Joe Gerth that there's a conspiracy against him! Secretary of State Trey Grayson has long entertained thoughts of entering the Senate race if Bunning were to retire, and has been saying so publicly all year. We wrote it back in December:

Many also expect Secretary of State Trey Grayson to be interested if Senator Bunning is not serious about reelection.

But Williams has decided that Grayson's commonly-known interest is a conspiracy against him:

In an interview later, Williams accused Bunning and Grayson of "trying to pick who the next candidate is. ... They seem to have some sort of a deal that if Bunning realizes that he can't win, then he's going to let Trey Grayson into the race."

We're sure that's Bunning's deal with Rand Paul too. Rand Paul who said, after he found out about Williams' interest, that "we will need a conservative to run" if Bunning decides against the race.

Or maybe all of the tax hikes being pushed through the Kentucky Senate this year have inspired other candidates.

March 11, 2009

Will 2009 Be The Tax-Happiest Session of Modern Times?

One might think that economically difficult times might lead the General Assembly to avoid increasing the tax burden on Kentuckians. Instead, they've used it as an opportunity to spend more and hike taxes.

  • The Senate is considering legislation to hike the gas tax and put tolls on the roads! Double road taxation in one bill!

And spending:

They've talked a big game about cutting spending, but we haven't seen it. All we have are higher taxes and ridiculous debt.

Here's the punchline: Speaker Greg Stumbo doesn't think it's enough!

House Speaker Greg Stumbo, D-Prestonsburg, said he thinks the General Assembly will be back in session this summer to address a budget shortfall for the fiscal year that begins July 1.

Sounds like the whole session has been nothing more than an incredible waste. Instead of pursuing real reforms that will create jobs, like repealing prevailing wage, cutting capital gains rates and reducing spending, they've been busy finding taxes to hike. They've been too concentrated on finding money to spend and not enough on making Kentucky's economy better.

If it were up to the Kentucky Club for Growth, there would be no special session without a commitment to rolling back prevailing wages in Kentucky.

Unhappy?

A Gallup poll of the 50 states finds:

"wild, wonderful" West Virginia was ranked last among the states. And the bluegrass state of Kentucky was 49th, with Mississippi 48th on the list.

And more specifically

The Gallup-Healthways Well-Being Index also ranked congressional districts...On the opposite end, Rep. Harold Rogers' district in eastern Kentucky's coal country and New York Rep. Jose Serrano's district, which includes the distressed neighborhood of the South Bronx, had the lowest well-being scores.

The poll of 'well-being' includes things like eating habits, health, and smiling.

"It's not just about physical health," said Eric Nielsen, a spokesman for Gallup. "It's about their ability to contribute at work and be more productive, and it's about feeling engaged in a community and wanting to improve that community."

That's quite an indictment.

Key Vote: HB 236 - Taxing IPTV

HB 236 - Taxing Technology That Doesn't Exist

It's not that it doesn't exist at all, it's that it doesn't exist in Kentucky. "Television Over Internet Protocol" or IPTV is a new effort by telecom companies, particularly AT&T and Verizon, to provide multi-channel cable over the internet. This new competition is good news for consumers in Kentucky, because:

A recent FCC study showed that cable rates increased at more than 3.5 times the rate of inflation between 1998 and 2003-but in the few places where cable faces competition from another wireline provider, prices are substantially lower than the average. The increased competition provided by the telcos will no doubt drive prices down further, as has already happened in Texas (where several telco TV projects are undergoing trials).

So how does the legislature react to the potential new technology? Instead of passing regulation that would ensure that franchise agreements would be available for providers that wanted to bring IPTV to Kentucky (which we should add brings significant investment in high-speed infrastructure to make it possible), they pass a new tax to make sure Kentucky is a less attractive place for the technology to expand to. And that's what HB 236 does: taxes IPTV before it even exists.

March 10, 2009

State Revenues Down Again in February

The just-released February revenue numbers were down again in February, with General Fund receipts down 9.3%, matching the predicted revenue shortfall for the first time since before the fiscal year started in July.

In February, we calculated:

General fund revenues were down 4% in January, leaving revenues up 1.1% on the year. There are only five months left in the fiscal year. In order for Kentucky to meet the prediction of a $459 million shortfall, revenues must end up down 2.7%, not up 1.1%.

Last time we checked on the numbers, we noted that "the state must average a 7.5% reduction in revenues over the last half of the year." Now, the number required to meet the projection is to average 9.1% lower revenues over the last five months.

Meeting that projection in February, revenues must average a 7.6% decline over the next four months to meet the original projection. In 2008, March through June were quite volatile year-on-year, with a 5% decrease in March, a 36% increase in April followed by a 21% decrease in May. It will also complicate comparison once new taxes passed in HB 144 are implemented in April. It is unlikely we'll know where we'll end up until we are there.

Kentucky's Magic Surplus Account

The Department of Public Advocacy is suing the state with a claim that the Department will be $4.7 million short of funding to provide advocacy services through the end of the fiscal year.

Today, the Kentucky House introduced legislation that "found $4.7 million" for the Department, according to the Herald-Leader.

A legislative panel dug up $4.7 million Monday for the agency that represents poor criminal defendants in court, potentially averting a shut down of the Department of Public Advocacy next month.

That fiscal shot in the arm is one of several provisions contained in a revision to the state's budget approved Monday by the House Appropriations and Revenue Committee.

The bill is HB 433, a 25-page bill of budget edits that adds these funds and other small projects here and there.

As the General Assembly is constantly voting to hike taxes this year claiming that there will not be enough money to spend, "Where in the world," you might think to yourself, "could they possibly have found $4.7 million extra dollars?"

Here is the language in the bill:

Section 13. 2008 Kentucky Acts Chapter 127, Part I, Operating Budget; I. Justice and Public Safety Cabinet; 7. Public Advocacy; after (2) Lexington Public Defender's Office, at page 529, is amended by inserting the following:

(3) Necessary Funding: There is appropriated additional funds, not to exceed $4,700,000 in fiscal year 2008-2009, necessary for the operation of the Department, over the amounts appropriated above. These necessary funds shall be made available from the General Fund Surplus Account (KRS 48.700) or the Budget Reserve Trust Fund Account (KRS 48.705) upon approval of the State Budget Director.

Oh, they'll be funded out of the surplus!

Now, according to Governor Beshear's presentations on the need for tax increases, the amount of money in the "General Fund Surplus Account" is zero. As for the Rainy Day Fund (Budget Reserve Trust Fund), it started this budget cycle with $214 million, but $191 million is budgeted to be spent in the next fiscal year. This session, the General Assembly has passed legislation (HB 143) that allows $219 million of the Budget Reserve Trust Fund to be spent this fiscal year.

Math:

 $214 million -- Original Level
-$191 million -- appropriation from biennial budget (RS08 HB 406)
-$219 million -- appropriation from HB 143
-$196 million

Now the Department of Public Advocacy is supposed to find another $4.7 million in this account. I guess they were shooting for a nice, round, $200 million hole.

Pro-Taxpayer Representatives Left Standing

Yesterday, we listed the 14 representatives who had voted against the three big tax increases: HB 144, the tax hike on alcohol and tobacco; HB 347, a new sales tax on IT services; and HB 374, the gas tax hike. Today we can cross two off our list who voted for HB 102, which would tax drivers additionally through tolls.

Here's the updated list.

Stan Lee (R-Fayette, 2008 Rank #2)
David Floyd (R-Nelson, #4)
Kevin Bratcher (R-Jefferson, #6)
Jim DeCesare (R-Warren, #7)
Mike Harmon (R-Boyle, #7)
Bill Farmer (R-Fayette, #10)
Tom Kerr (R-Kenton, #12)
Adam Koenig (R-Kenton, #12)
CB Embry (R-Butler, #15)
Alicia Webb-Edgington (R-Kenton, #15)
Tim Couch (R-Leslie, #22)
Myron Dossett (R-Christian, #25)
Tim Moore (R-Hardin, #29)
Brent Housman (R-McCracken, new)

March 9, 2009

Former Bluegrass Airport Board Chairman Up for Next Appointment

Bernard Lovely, Jr., former chairman of the board of directors at the Bluegrass Airport, is up for his next board appointment.

The House State Government Committee has recommended HR 154 for passage in the House, which confirms Mr. Lovely's appointment to the Kentucky Long-Term Policy Research Center's board of directors.

Recently, Mr. Lovely's chairmanship of the airport board was found by the State Auditor to "lack adequate controls," to have provided "lax monitoring of expenses" and that they "should have expressed concern about spending practices and requested detailed information as to how this money was being spent."

Among the more relevant findings:

  • Former board Chairman Bernard Lovely's approval of Gobb's spending "was sporadic throughout the process," Luallen said.
  • The board members knew of generous employee Christmas gifts and giveaway prizes because they were often at events where the gifts and prizes were given, but they did nothing to curtail such spending, the audit said.

    For example, marketing director Brian Ellestad and former operations director John Coon spent more than $1,000 in 2006 and 2007 combined for Lionel trains as staff Christmas party prizes. Gobb also charged $1,222 to Hobbytown USA in the same period.

    And over three years, the airport paid $14,741 for holiday hams for employees.

    "The board was aware of the majority of these gifts or at least had been invited to the events during which most of these gifts were distributed," the audit said.

  • In March 2008, marketing manager Amy Caudill charged $296 on her airport credit card to buy 14 copies of The Little Red Book of Everyday Heroes, written by Sylvia Lovely, the wife of the former board chairman.

    Caudill told auditors that Gobb told her to buy the books and place them at each board member's seat at the following meeting.

  • Bernard Lovely also was reimbursed by the airport for a $388 charge stemming from a 2007 trip to Hawaii for the American Association of Airport Executives issues conference. That expense, according to the receipt, was for a "helicopter tour," the audit said.

    "The helicopter tour was covered in full through this reimbursement," the audit said.

The Long-Term Policy Center does not require the sort of financial oversight that is necessary at the Bluegrass Airport. But we do wonder if anyone would use this opportunity to ask some questions about his last board job.

Key Vote: HB 102 - Tolls

KEY VOTE ALERT

"NO" to HB 102 - Tolls on top of Taxes and Debt!

The Kentucky Club for Growth urges all Representatives to vote "NO" on HB 102, which will create new tolling authorities in Kentucky. This key vote will be part of our 2009 Congressional Scorecard.

So far, the legislature has voted to hike the gas tax by four cents, bond an additional $400 million in debt to build roads, and that's all on top of an expected $441 million in federal stimulus road building. Now in addition to saddling drivers of the commonwealth with higher gas taxes and debt, they are trying to bring back tolls.

Even if one believes that tolls are a fairer way to apportion fees for use of the road system, that is no excuse for piling Kentuckians with multiple tax and spending schemes. They've already voted to hike taxes and pile debt above levels that were already at record highs. Apparently debt and tax hikes are not sufficient for those addicted to spending in Frankfort, and they need to create an entire new system of taxation on top of those measures.

When will this tax frenzy stop? (March 24 27) Who will stand up against it until then?

Key Vote: HB 374 - Gas Tax Hike

While we mentioned this in our e-newsletter, we haven't yet posted that HB 374, a bill that raises Kentucky's gas tax by $0.04, will be scored as a part of the Kentucky Club for Growth's 2009 Legislative Scorecard.

The bill passed the House on Friday, 82-17-1.

So far, the 14 Representatives who have voted against the alcohol and cigarette tax increases, the new sales tax on IT services, and now the gas tax increase are:

Stan Lee (R-Fayette, 2008 Rank #2)
David Floyd (R-Nelson, #4)
Kevin Bratcher (R-Jefferson, #6)
Jim DeCesare (R-Warren, #7)
Mike Harmon (R-Boyle, #7)
Bill Farmer (R-Fayette, #10)
Tom Kerr (R-Kenton, #12)
Adam Koenig (R-Kenton, #12)
CB Embry (R-Butler, #15)
Alicia Webb-Edgington (R-Kenton, #15)
Tim Couch (R-Leslie, #22)
Myron Dossett (R-Christian, #25)
Tim Moore (R-Hardin, #29)
Brent Housman (R-McCracken, new)

Monday Notes: Card Check, States' Rights, Pork, Banking

Card Check: President Obama has finally publically called for ending secret-ballot union elections. Kentucky Club for Growth Chairman Warren Rogers has pointed out the dangers of this widely unpopular proposal.

Fighting the Stimulus: State legislatures around the country are fighting back against the overreaching federal stimulus spending package and its onerous and probably unconstitutional requirements on the states. This article rounds-up some of the efforts across the states, and mentions Kentucky Representative John Will Stacy's (D-Morgan, 2008 Rank #78)HCR 168, to "Declare state sovereignty over powers not given to the the federal government by the U. S. Constitution."

Pork: The Club for Growth lists the top ten porkers in the US Senate, and Kentucky's McConnell is #9:

SENATOR -- EARMARK $$
Byrd (D-WV) -- $122,804,900
Shelby (R-AL) -- $114,484,250
Bond (R-MO) -- $85,691,491
Feinstein (D-CA) -- $76,899,425
Cochran (R-MS) -- $75,908,475
Murkowski (R-AK) -- $74,000,750
Harkin (D-IA) -- $66,860,000
Inhofe (R-OK) -- $53,133,500
McConnell (R-KY) -- $51,186,000
Inouye (D-HI) -- $46,380,205

Banking Was Considerably Worse Off in Early 1990's: Economist Mark J. Perry points out on his blog that the banking crisis of the early 1990s involved more than 4x the number of problem banks and over 5x the amount of assets in those problem banks than the current crisis. View the charts.

March 6, 2009

Expensive Horses, Revisited

We've reported on the certainly misguided efforts of Governor Beshear's Task Force on the Future of Racing to make Kentucky's horse industry more competitive by taxing it more. Now this plan is moving through the General Assembly. We wrote earlier about the task force's recommendations:

The authors of the final report seem to really have Christmas on their minds.

Their ambitions have relaxed in some ways in the final report, asking for "only" a 67% budget increase, and proposing a variety of taxes and fees on racing and betting so that the $2 million dollar increase would "only" require a 37% increase in appropriated general funds. (41% if you count the current 4% cuts all agencies are facing.)

The proposals have been divided into two bills, HB 472 and HB 474, both sponsored by Representative Larry Clark (D-Jefferson, 2008 Rank #62).

Today, the House passed HB 472 by a vote of 98-0. HB 472 contains the spending and regulatory parts of the plan, which were accompanied by this humorous fiscal note from the LRC (our emphasis):

"The fiscal impact of HB 472 is indeterminable, but is estimated to be an increase in expenditures for the Kentucky Horse Racing Commission....The Commission would receive...a total of $60,000 in fees collected....Additionally, the estimated cost of implementing the recommendations from the Governor's Task Force on the Future of Racing is estimated to be $1.7 million, of which this is a part. While the costs are significantly higher than the revenue generated, the actual impact is indeterminable because the Commission would offset some of the costs by increasing the reimbursement received from tracks under KRS Chapters 230 & 240. It is important to note that revenues generated by House Bill 474 would cover the costs necessary to enforce the provisions of the bill."

So where's HB 474, the bill that's supposed to tax the horse industry to pay for HB 472? In House A&R, not on the agenda.

In total, that's 98 votes for more government and an unsupported $1.7 million in new spending.

Gov's Got A Brand New "Stimulus"

So, the Governor is sugar-coating increasing the state's incredible debt by calling it a "stimulus".

The Bluegrass Institute for Public Policy Solutions comments:

Gov. Steve Beshear issued a statement Thursday night expressing his pleasure that Kentucky is about to pick up another $400 million in debt as part of the new road plan.

Not to worry, though. Our "financial experts" are "comfortable."

Beshear said:

This plan also creates a state stimulus effort through the use of a $400 million bond issue. This newly available debt capacity, added to the federal stimulus money, allows us to invest in projects with long-term benefits for the commonwealth. Our financial experts have carefully analyzed this bond issue and are comfortable with the debt capacity limits.

Here's a little chart of approximate debt service (the amount of cash that must be appropriated to support to debt) in the last five budgets:

Budget Debt Service % Increase
2001-2002$710 million 
2003-2004$760 million7%
2005-2006$780 million2%
2007-2008$900 million16%
2009-2010$1.1 billion22%

Source: 2008-2010 Budget of the Commonwealth, Budget in Brief

You can see what, exactly, is being "stimulated."

Priorities

Page One today opens with a statement about the priorities set by our legislators:

Is anyone else surprised that Frankfort is more worried about the road plan than than the welfare of Kentucky families? We "can't afford" (thanks, Governor) to keep kids in school until they're 18, can't afford to have life-saving knowledge for athletic programs and equipment in schools, can't afford to have nurses in schools. But we can afford eleventy billion dollars in the road plan, can afford giving money to NASCAR and can afford incentives for companies paying $9 per hour without benefits.

While we have reservations about the utility of outlawing dropouts, Jake hits the nail on the head about the General Assembly's misguided ideas of just what qualifies as economic development.

March 4, 2009

The Pro-Beverage-Lobby-Anti-Jobs Caucus

On February 26, the Kentucky House passed HB 347, a bill that creates a new sales tax on IT services. It passed 69-25, with 25 Republicans against and 9 Republicans and 60 Democrats in favor.

There is really no debating that this is a horrible bill that will send jobs out of Kentucky. Many IT firms have relocated to Northern Kentucky from Cincinnati because of the favorable tax treatment.

The issue we'd like to bring your attention to, are the legislators who bravely voted against hiking taxes on booze and smokes, but apparently have no problem imposing this new tax; one that is not on discretionary activity and will directly cost the new economy-type jobs that we're trying to attract to Kentucky. We can't really guess the motivation for this divide, except that one issue (beer) has an large lobby that organized beer trucks to drive around the Capitol and dumped bourbon on the Capitol lawn, and the other (IT businesses) is just a collection of small businesses entrepreneurs that did not put on a show.

Anyway, enough hypothesizing, here are those that can draw a distinction between these two taxes:

Rep. Linda Belcher (D-Bullitt, new)
Rep. Scott Brinkman (R-Jefferson, 2008 Rank #33)
Rep. Dwight Butler (R-Breckinridge, #36)
Rep. Ron Crimm (R-Jefferson, #31)
Rep. Marie Rader (R-Jackson, #20)
Rep. Steven Rudy (R-Ballard, #23)
Rep. Arnold Simpson (D-Kenton, #59)
Rep. Kevin Sinnette (D-Boyd, new)
Rep. Ancel Smith (D-Knott, #58)
Rep. Fitz Steele (D-Perry, new)
Rep. Tommy Turner (R-Pulaski, #26)

We wonder what their constituents would think if they learned that their representatives are willing to stand against taxes on smokes but not against taxes on jobs? We may find out...

Building Schools Should Cost Less

We've said much over the years about how Kentucky's prevailing wage laws create complex and artificial wages levels that are fantastically uncompetitive.

A new group, the Kentucky Opportunity Coalition has joined the chorus of voices pointing out how much these laws are costing Kentucky taxpayers. From a recent release:

In a 2004 Memorandum developed by the Kentucky Department of Education's Facilities Management Division, it was reported that from 1999 to 2004, Kentucky's prevailing wage requirement unnecessarily inflated the cost of school construction by more than $480 million. The amount of unmet need for schools in the most deplorable condition is around $500 million. It is conceivable that if SB 145 was currently the law, nearly every child in Kentucky would be attending an adequate school. In addition, these returns can be realized without one additional dollar being invested!

We'll say it again:

If our leaders in Frankfort were really concerned about growing the economy, we would be having a serious discussion about getting rid of prevailing wage.

Outlawing Dropouts Costs Money But Doesn't Address the Problem

The Herald-Leader has caught up. Earlier, they were unaware that HB 189, a bill that would raise the compulsory school attendance age from 16 to 18 would result in more students and therefore more expenses. We noted:

Raising the dropout age requires significantly more spending. Without entering into a discussion about whether it is a good or bad proposal, if the legislature acts in a way that would keep more students in the school system than would otherwise be there, then the state is going to have to spend more for more students. It is not something that calls "for no additional money." In fact, it calls for over $11,500 for every three students that are kept in school who would otherwise have opted out.

Reporter Jim Warren notes today:

Legislative economists said they can't determine how much the proposal would cost the state, but suggested that it would require at least $15 million a year to educate those who otherwise would have dropped out.

With 6,175 children possibly affected, our math puts the number north of $23 million.

In other criticism, if these kids don't want to be in school, we can't imagine that raising the compulsory age will change their attitude towards education, and now that it's illegal to be out of school, all we're doing is paying more for enforcement to put kids in a place that they're not going to apply themselves anyway.

That is why this bill constantly fails, and points to one of the myriad problems with legislators in Frankfort:

The problem is that kids don't want to be in school, not that they're not compelled to be there. Representative Brent Yonts (D-Muhlenberg, 2008 Rank # 78) has introduced this bill in each of the last 10 years. Instead of recognizing that he is pushing a bad idea and looking for a new good one instead (perhaps one that examines how government programs might be discouraging individuals from pursuing individual success) he just keeps on doing the same thing.

He is always able to do the same thing because Kentuckians continue to elect more of the same.

Other reporters remember to talk about the cost as well. Mark Hebert notes the cost at the end of his report, but the Courier-Journal neglects it.

There's an easy way for our schools to save considerably more than this amount, however, that deserves its own post.

March 3, 2009

Key Votes: Some Good Legislation

SB 72 - Honoring the Spirit of HB 44

The legislation that set forth the annual 4% cap on property tax increases is commonly referred to as HB 44, even though there's a new HB 44 every year. While the cap has kept property taxes lower in Kentucky there are many taxing authorities that do not fall in the cap, and effectively create annual increases larger than 4%. SB 72 would require the fiscal court to approve increases by these other taxing authorities, bringing better accountability and helping create an honest cap. SB 72 is currently sponsored by Senators Damon Thayer (R-Scott, #2 and John Schickel (R-Kenton, new) and the Kentucky Club for Growth will reward them and other cosponsors of SB 72 on its 2009 scorecard.

SB 49 - Repeal the Rain Tax

Senator Thayer (R-Scott, #2) again has taxpayer fairness in mind, as this bill prohibits a citizen or business from being charged storm water taxes if they are unserved by the sanitary or storm water system. The government should either provide the service to an area or exempt the area from the fees related to the unprovided service.

HB 411 - Combining the KVE into the KSP

HB 411 eliminates Kentucky Vehicle Enforcement and merges its operations and functions into the Kentucky State Police. They really are duplicative agencies, ever since the KVE was rules to have the authority of officers of the peace. When is the last time you remember a major state agency being eliminated in more than name? Sponsors are Representatives Mike Cherry (D-Caldwell, #78) and Sal Santoro (R-Boone, #11).

Key Votes: Driving Businesses Out of Kentucky

SB 56 and HB 333 - Outdated Medical Guidelines Are Better For Organized Labor

SB 56 and HB 333 are two verions of the same legislation that would roll back the state's standard to the outdated 5th edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment" because organized labor thinks the new edition is less lucrative valid. So in the pocket of organized labor that they're willing to ignore modern medicine: Senator Ray Jones (D-Pike, #30), Representatives Brett Yonts (D-Muhlenberg, #78), Dwight Butler (R-Breckinridge, #36), Tommy Turner (R-Pulaski, #26), Robin Webb (D-Carter, #69)

HB 392 - Double Penalties for Misclassification of Employees

HB 392 creates potential for double penalties in the construction industry where the Office of Workplace Standards and a contractor disagree on which workers are 'independent contractors' and which are 'employees'. The bill creates not only restitution, but additional civil penalties, and overall simply makes it harder and more risky for two people to agree to do business with each other in the Commonwealth because the state may not agree with the way they have arranged to do business. Representative Sannie Overly (D-Bourbon, #62)

HB 455 - Destroying the Workers Compensation System

The workers compensation system exists to be an orderly way for injured workers to be compensated for injury and to provide businesses with clear obligatons to care for injured workers. It is a mediation system designed to reduce the delay, uncertainty and costs of going to court. In exchange for the relinquishment of the original civil court claim, workers are relieved of the burden to prove the fault of the employer. HB 455 would open the workers compensation system up to litigation before any administrative hearing. While we're sure the author thinks the bill leaves the old system in tact, there will no longer be any reason to be forthcoming or agreeable in workers compensation claims because it can be challenged in court anyway. The system designed to reduce litigation will no longer serve a purpose. Sponsors: Representative Rick Nelson (D-Bell, #48) or Representative Tim Firkins (D-Jefferson, #95).

March 2, 2009

KEY VOTES: SB 188 / HB 540 - Creating an Unaccountable Office of Accountability

House and Senate leadership want to create a new auditing office in the legislative branch. Senate President David Williams describes it as "a good government sort of thing."

If it's good government, then why make it a secretive organization?

Even if there was reason to ignore the existence of the Office of the State Auditor and the Office of Policy and Management, there's no justification for a new office with law enforcement authority, and it's unfathomable why you would try to shield the findings of the "accountability office" from public records and public meetings laws.

At their press conference Friday, Speaker Stumbo suggested he might make some changes to elements that probably wouldn't pass constitutional muster: that the activities of the office would be protected from subpoenas and that the office would hold some authority over the elected offices of Attorney General and State Auditor. Still, no discussion about why an office designed to ensure good government would be exempted from the typical government transparency requirements, lax as they are.

There are many changes required before this is anything other than a bad idea. Sponsors: Representative Greg Stumbo (D-Floyd, 2008 House Rank #88) Senator David Williams (R-Cumberland, 2008 Senate Rank #19)

Thinking Hard To Create Excuses To Hike Taxes

WHAS11 of Louisville reports on the next tax-hike push through the General Assembly.

In our recent e-newsletter, we described the lie that is the fluctuating gas tax:

The General Assembly plans to introduce the 6-year road plan Friday with provisions to raise the gas tax four cents a gallon. In theory the gas tax is indexed to the wholesale price of gasoline, so that if the price of gasoline goes up, then the tax rises a percentage as well, and if the price goes down, so does the tax. In practice, the legislature locks in every increase and the tax never goes down.

Sign up here if you don't get the e-newsletter.

The short article offers a number of excuses for breaking the mechanism and keeping the tax high:

Saving the Highway Plan

David Williams, KY Senate President, said, "I think we're going to have to take some step to freeze those pennies or its going to be catastrophic for the state highway plan...."

There is little question that lawmakers could never build all the roads they would like to spend money on, but there is always the expensive change order or the traffic light for the Transportation Secretary that could be avoided, or simply not using roads as a political tool.

Saving the Fund from the Consequences of Low Gas Prices

"...That's my personal opinion and it may not be a popular opinion with some folks, but the way the law is right now, it would take probably four years to recover to the level of revenue that we have right now."

What a tragedy it would be is gas prices stayed so low for the next four years that they did not hike the gas tax back up on their own! While I have great faith in President Obama's intentions to make fossil fuels as expensive as possible in this country, low gas prices are nothing to lament.

Consumers Won't Notice

Both leaders say if the gas tax was allowed to drop, consumers probably would not benefit because it is likely that gas retailers would pocket the difference.

"Nobody will care about a couple of cents." We heard this appalling nonsense during the floor debate on the last tax hike two weeks ago. As legislators dismissively hike every tax by a couple of cents, and create new taxes by a couple of cents, it doesn't take too long before Kentucky is one of the least competitive states in the country for businesses to develop.

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The KY Club for Growth seeks principled candidates who are committed to the following:

* Free market principles
* Lowering taxes
* Reducing spending
* Decreasing the size of government
* Judicial reform
* Protecting property rights
* Expanding school choice
* Reducing needless regulation

We will hold endorsed candidates accountable for these principles by monitoring each candidate on a vote-by-vote basis. As a Club member, you will receive candidate monitoring updates and scorecards on a regular basis. Join us today.