Kentucky Club for Growth
fighting and winning for economic freedom

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June 30, 2009

Grover Norquist Comes to Lexington

Economic Freedom freedom fighter Grover Norquist made an appearance in Lexington last night.

David Adams has a great summary. Here's an excerpt:

Healthcare reform looks to be the hottest issue for 2009. Norquist dismissed the Obama plan simply.

"I've never gotten one of them to sit still long enough to explain to me why they need $1 trillion to $3 trillion more for a healthcare system that is going to be cheaper," Norquist said.

Read the rest.

WOW: Read About Abramson's Horrible Record

Brad Cummings has collected a damaging, damaging indictment of Louisville Mayor Jerry Abramson, who has recently been the focus of speculation as a potential running mate for Governor Beshear in 2011. It's a must-read over at Page One Kentucky.

Economic Indirection

Keith Hennessey has a graph up today that is very helpful in understanding the weaknesses in our economy:

  • The width of each component bar represents its share of GDP.
  • The height represents the growth rate of that component. This growth rate is labeled in white immediately above or below that bar.
  • The black number within the bar shows that component's contribution to the overall growth rate of -5.5%

The news today is that the nation's economy shrunk at an annualized rate of 5.5% in the first quarter of 2009. Looking at the black numbers in the graph, we can see that individual consumption contributed a positive 1% to the economy, keeping bad news from being worse.

On the other end of the graph, we can see that imports-exports netted a positive 2.4% contribution the economy, although this contribution was mostly offset by shrinking inventories (-2.2%).

The entirety of the contraction can be attributed to business investment, housing and government.

Obama's stimulus focuses almost entirely on government spending, but it's so slow that that sector of the economy is still negative.

Meanwhile, the housing market is still adjusting, and a lack of business investment is a huge drag on the economy.

The stimulus package is focused on government spending - a strategy of execution that is so inefficient that government still contracted - and offers no incentive for business investment - which is the significant portion of the drag on our economy.

While a plan was offered that addressed this situation directly, Congress didn't even get to vote on it.

June 29, 2009

Governor Confused About Politics, Policy

From Today's Herald Leader:

"The governor's focus right now is on policy rather than politics," said Beshear spokesman Jay Blanton, noting that the governor must manage a difficult budget for the coming year.

Governor Beshear on Thursday:

Gov. Steve Beshear, smarting from the defeat of his casino bill earlier this week, plans to go after the Senate Republicans he says killed the gambling legislation.

"Next year is an election year," Beshear told reporters here Thursday. "I'm sure that all of us will be involved in those elections. It's time that people step up and put their concerns in the voting booth. It's time that we either change the minds of some of the legislators, or change some of the legislators."

The Governor or his spokesman seem confused about what politics and policy are. They also seem confused about what needs to happen to get our horses their casinos.

Living the High Life on Your Dime

We were going to write something about the Herald-Leader's weekend reporting on the Kentucky Association of Counties (KACo), but we can't top the summary at Page One Kentucky:

Really, where does KACo get off paying for a BMW and a country club membership when someone already makes $178,080? Why does a blind man need his own vehicle?

And who stays at the Willard when they're in Washington, D.C.? No one. Especially when they're just visiting Capitol Hill. You could stay at a nicer, more luxurious hotel like a Kimpton joint for half the price. You only stay at the Willard or the Mayflower if you want to make people think your excrement doesn't stink and that you're somebody.

There you go, Kentucky. Your tax dollars. Flushed down the toilet by a few people who want to live the high life.

Ellinger is Lone Lexington Budget Champion

The Lexington city council Thursday night approved a budget that may contain $3 million in wishful thinking. Councilmember at large Chuck Ellinger was the only one concerned:

By a 13-1 vote Thursday, the Lexington-Fayette Urban County Council approved a $279 million budget for fiscal year 2010, which begins July 1.

The budget includes cuts, but gives a 1 percent raise to full-time city employees, with the exception of police, fire and corrections officers, who are covered by a contract that is negotiated separately.

An additional $6 million was budgeted for the employees covered by contract, while the cost of raises for the other city workers comes to $932,000.

At-large councilman Chuck Ellinger II said he voted against the budget because, based on figures provided by city officials, money coming into city coffers might turn out to be $3 million less than budgeted. Fifth District councilwoman Cheryl Feigel was absent from the council meeting.

June 26, 2009

Update from PA

Fun news in Pennsylvania.

First, the Club for Growth has petitioned the FEC to engage in an anti-fundraiser for Arlen Specter, at the Seantor's suggestion. From Politico:

The anti-tax Club for Growth is preparing a campaign designed to drain cash from party-switching Sen. Arlen Specter's (D-Pa.) campaign coffers, and is awaiting approval from the Federal Election Commission to follow through with their plan.

The group's political action committee wants to contact donors who have recently given money to Specter's reelection campaign and let them know they can request a refund of their money. After he switched parties, Specter promised he would return campaign contributions to those who requested it.

"Senator Specter agreed to return the contributions he received before switching parties, and we want to help him make good on that commitment," Club President Chris Chocola said. "It's easy to request a refund with a preprinted letter and envelope, and I expect a lot of people will want their money back."

The Club has asked for approval from the FEC. If approved, could have a significant impact. It seems that RINO sans-pretense Arlen Specter has few friends. Also from Politico:

28 percent.

That's the (surprisingly low) percentage of Pennsylvania voters who believe that party-switching Sen. Arlen Specter (D-Pa.) deserves re-election, according to a new Franklin and Marshall poll.

And it explains why Rep. Joe Sestak is preparing to challenge Specter in a Democratic primary, and why Republicans are a bit more confident of their chances in winning the Senate seat next November.

The poll shows Specter is still facing a serious political challenge, as he seeks a sixth term as a Democrat -- and that his actions in the first several months haven't won over a majority of Pennsylvania Democrats. A strong 57 percent majority of respondents said that "it's time for a change" and that Specter hasn't won their support.

Only 43 percent of Democrats said Specter deserves re-election, with 39 percent arguing it's time for a change.

Specter's approval rating dropped 18 points in the last two months from 52 to 34 percent. Among Democrats, he only holds a 46 percent approval rating -- hardly gangbusters in a contested primary.

Beshear: Politics First, Equine Industry Second

It seems House and Senate Leadership are, according to today's Herald-Leader:

Stumbo, D-Prestonsburg, said the horse industry, which says expanded gambling is needed for Kentucky to compete with the slots-fueled racing purses and breeders incentives of other states, will have to make its case in the Senate.

"We're not going to engage in useless activity here," he said. "We're not going to go through it for no reason."

Senate President David Williams, who opposes expanded gambling, responded: "Good. That means we won't have to address that issue in the next session. The support is not here."

It seems, however, that the Governor and the Speaker aren't interested in success on this issue, only politics:

"One of the things we agree on is that ... we usually campaign for candidates in our party, and I'm sure we all will be doing that next year."

However, at a rally of horse industry supporters later Wednesday, Beshear took a different tack. "We've got to do one of two things," he said to several hundred gathered at Keeneland. "We've got to change some of the state senators' minds or we've got to change some of the state senators."

In next year's state legislative races, all 100 House seats and half of the Senate's 38 seats will be up for grabs, including Williams' in south-central Kentucky.

Williams predicted that Democrats will spend a lot of money trying to oust Senate Republicans and slots supporters will form a group to pay for issue-oriented advertisements. But he said there will be no change in party control of the House or Senate in the next 18 months.

Advocates of slots "can spend all the money in the world, but they have the wrong issue," Williams said.

Stumbo, however, said most Kentuckians will side with the House.

"They will smile on what we did," he said, "and they will frown on what they did."

Let's do a quick analysis here, from the bottom up.

Stumbo and Williams have differing views of the popularity of the issue in Kentucky. Given the outright bribery that had to occur to achieve a one-vote victory in the House, we have to think Williams' take - that it is not very popular - is closer to the truth.

Next we have the Governor's two statements - that "We've got to change some of the state senators' minds or we've got to change some of the state senators," and he plans on campaigning hard for Democrats. It seems that he's chosen the latter approach: changing Senators.

And it seems that it's the wrong approach. It seems obvious, to this fairly uninterested observer, that slots for horses is still very unpopular in the state.

In fact, there have been plenty of seriously contested elections we can think of since Beshear took office where casinos were an issue and the anti-casino candidate won: Sen. Smith won Mongiardo's seat, Sen. Givens won an expensive race. In the February special election for the 32nd district, both candidates were against casinos.

The citizens of Kentucky have yet to be convinced, but Governor Beshear and Greg Stumbo seem to see the issue as a fundraiser for their politics. If they actually cared about the issue, they'd work on convincing the citizens of Kentucky, not finding candidates to lose races.

June 25, 2009

Governor To Reduce Spending Further

In other good news from the just completed special session, Governor Beshear has determined that he will reduce spending further than the $200 million he had proposed.

In a press release, he suggested that the legislature increased spending, but offered only tax cuts as examples of what would motivate his commitment to thriftiness:

Moreover, the Governor said the legislature added millions and millions of dollars in additional spending to the budget, even as they agreed with his key priorities of education, health care and public safety.

Those additions - including tax credit proposals for cars and new home purchases along with active military income tax exemptions - are all worthwhile and deserving of support, Gov. Beshear said. However, the result will be significantly deeper cuts in much of state government, beyond the 2.6 percent cut for most state agencies that the Governor proposed in his budget plan.

"Those decisions today will have profound consequences tomorrow," he said. "And there should be no doubt of that among everyone involved in crafting this budget revision."

We look forward to examining the budget to analyze whether any additional spending was added, and we'll let you know who voted for increased spending when they were addressing a $1 billion shortfall.

But we welcome the reductions of the tax burden on Kentuckians, however selective they are, as well as the Governor's commitment to continue to reduce spending.

Speaker Stumbo Recognizes Tax Cuts Encourage Growth

Really.

In an article today about the various tax cuts included in the final version of HB 3 from the special session (tax exclusion for active duty military, a $5,000 tax break for purchase of a newly constructed home, an exclusion of the value of your trade-in if you buy a new car), House Speaker Greg Stumbo explains that reducing taxes will generate commerce:

Most lawmakers dismissed predictions of future budget woes, saying the new programs would stimulate the economy and produce more tax revenue over the long haul. "If you weigh the impact of the whole package, it's very small in terms of the overall budget and it could be very large in getting us out of this recession," said House Speaker Greg Stumbo, D-Prestonsburg.

Let's hope the Speaker remembers this as we continue discussions to eliminate income taxes in Kentucky.

June 24, 2009

Quick Summary of the Special Session, Day 10

The House is now recessed until 11:30. Conference committees have agreed to the provisions of HB 4, as reported yesterday, and they are returning to sign the conference agreement on HB 3 (tax incentives and tolls).

The Senate has not yet gaveled in.

UPDATE: The Seante passed the budget 35-0

12:20 - David Williams, speaking about the incentives bill, said that "shock jocks" wouldn't tell people about some portion of the bill, and that he'll depend on the real reporters to tell the story. Strangely defensive

12:41 - Senator Thayer complained that the Governor was uninterested in considering any provisions to assist the Horses other than slots, then Senator Worley complained that he didn't get the chance to have the slots bill defeated on the Senate floor, as if its place of defeat made a difference.

HB 3 passed. Williams suggested that the Governor couldn't line-item it (pretty sure he can) and Williams said folks could go home if they wanted.

1:26 - the House passed HB 3, and went to get a sandwich. Most Northern Kentucky legislators opposed on the grounds that it set a precedent for tolls in Northern Kentucky. Robin Webb and Bill Farmer both complained that the bill was ignoring the real problems of a broken tax code. Harry Moberly said that he was for the bill but he hated it because it created tax breaks that meant he'd have less money to spend in the future.

Special Session Resumes Today

Today is day $480,000.

Today they will finally pass what the Governor, in his speech nine days ago, called "The first piece of legislation, by far the biggest and the most critical, is to balance the budget for the fiscal year that begins in just two weeks."

The Governor said it'd be simple:

My budget bill spends federal stimulus dollars in the way that you authorized in the regular session earlier this year.

It preserves the same priorities you and I preserved when deciding together how to fill the current fiscal year shortfall.

It protects the same services - the basic K-12 funding formula, higher education, Medicaid, and public safety - that you and I long ago decided are the keys to the quality of life that Kentuckians deserve.

Yet here we are, a half-a-million dollars later, still not done. All because the Governor decided to call a session without reaching any sort of understanding beforehand and throwing inessential nonsense into the call.

But that's not the worst part. The worst part is that we've spent half-a-million without accomplishing anything of significance to the future of the commonwealth. A land transfer for a battery plant might be a critical piece of a new industry. But that doesn't take nine days.

Yet unaddressed are the state's failing pension system, our failing unemployment insurance fund, and the general hostility to the free market that makes Tennessee such a more attractive place to do business. In fact, if the incentives bill passes, this session will only make Kentucky that much less attractive.

Back in April, we wrote:

The 2009 legislative session should be characterized as nothing less than a disaster. The cooperation they are so proud of is nothing less than a mutual agreement to abscond without action or responsibility.

Kentucky is burdened by leadership that is more serious about the next election than addressing tough problems. As the rhetoric rises and the chimes sound for the next wasteful special session, remember this dismal record and tell your legislators: "No thanks!"

Not enough of you said it...

June 23, 2009

Session Could Finish Tonight; KEY VOTES

Belated UPDATE: It won't. See you tomorrow.

Kentucky.com reports that the House and Senate have reached a budget agreement, and that two of the important initiatives from the economic incentives bill have been moved into the budget: the land transfer for the battery plant, and a privately-funded project at UK.

This creates the possibility for the Senate to agree to this and adjourn. However, they are still working on the tax giveaways bill, so it may survive as well.

There is a strong likelihood that these bills will be key votes for the Kentucky Club for Growth's 2009 scorecard. Kentucky taxpayers are already concerned about the unnecessary length of the special session. If the Budget bill cuts spending any less than the Governor's original proposal, or if tax giveaways to Hollywood are included in the incentives, Kentucky taxpayers should be very concerned.

And on the 7th Day...

KyWordSmith.com has a nice editorial summarizing the special session to date. Here's their punchline:

Perhaps most troubling is that amid all this special session brouhaha, the debates have all centered around how to SPEND taxpayer money, not how to save it.

Will the $360,000 session rest on day #7? Read the rest of the note here.

Tennessee Wins Again!

Remember back last April when Tennessee won a new Volkswagen plant that Kentucky wasn't even in the running for?

Now, Kentucky's lost out on a high-tech Nissan manufacturing plant to our southern neighbor.

Page One Kentucky reports:

Nissan is building a manufacturing plant for it's super-green EV electric car in Tennessee- not in Kentucky, that third largest auto state in the nation. Tennessee will also be host to a- get this- a high-capacity lithium ion battery production facility in partnership with Nissan's partner company, NEC Corp.

Nissan has announced plans to launch the large-scale production of electric cars and batteries in the United States, with a massive 50 billion Yen ($516 million) facility in Smyrna, Tennessee.

The site will be capable of knocking-out an impressive 50,000 to 100,000 EVs by 2012, with investment possibly DOUBLING to 100 billion Yen (more than $1 Billion).

The Japanese outfit, fast becoming a forerunner in the race to the mass roll-out of EVs worldwide, aims to tap into low-interest loans for the production of greener vehicles as part of the US government's package to support the auto industry.

Then they ask:

Again, this is not being built in Kentucky. Why? Were we even in the mix with Nissan and parent company Renault?

Well, let's count the ways:

  • Tennessee has no income tax
  • Tennessee is a right-to-work state
  • Tennessee has reasonable prevailing wage laws that are about 20% lower than Kentucky's lowest

All reasons why CEOs view Tennessee as a top five state for doing business, a full twenty spots higher than Kentucky.

Voting in Ignorance

Yesterday's budget debate in the Kentucky House was a replay of the stimulus debate in the US House: There was no opportunity to read the legislation.

Ronnie Ellis reports:

Republican Leader Jeff Hoover of Jamestown asked that the House recess for one hour so that members could read the budget bill but his motion was defeated. Hoover said the original budget bill had been just 14 pages but when the committee substitute was presented to the budget committee just a couple of hours before the House convened to vote on it, the bill had grown to 57 pages - and members had little time to see what is in it.

Rep. Tanya Pullin, D-South Shore, voted against the bill for that reason. She said she customarily refuses to vote for bills she isn't given time to read and study.

Do these two deserve praise, or are we just dumbfounded that it is newsworthy that some members of the assembly thought reading the legislation was important?

During the shenanigans, Rep. Mike Harmon requested a fiscal note be provided on the bill in accordance with House rules. Speaker Stumbo attempted to dismiss it silently, but someone opened up the roll call machine. The motion to actually be informed about what they were voting on was defeated by about 44-42.

That's right, 42 members indicated that they'd rather not know the fiscal impact of the bill before they voted.

It is our pledge to you that you will have a list of who these know-nothings are.

June 22, 2009

Slots Bill Fails Senate A&R Vote That Would Send Bill to Floor

Senate A&R voted not to send HB 2 to legalize slots at racetracks to the Senate floor with no expression. The vote was not a favorable expression of the legislation, just to send it to the next stage.

Boswell - yes
Buford - yes - wanted to add local option
Harper-Angel - yes - believes her perspective is unique and represents Churchill
Harris - no
Kelly - no
Kerr - no - represents Keeneland and Red Mile
Leeper - no (viapageonky.com)
McGaha - no
Palmer - abstained due to a conflict of interest
Pendelton - yes
Shaughnessy - yes - is upset that he's in the minority, made a bold prediction that there is no stopping gambling, that the question is not whether it happens but when it happens
Smith - no (via Page One)
Stivers - no - explained that the House plan leaves the state budget at least $20 million in the hole, possible $40 million after five years if Ohio comes online
Tapp - no
Tori - no
Westwood - (don't think he was there)
Borders - no

Jake at Page One summarized the debate prior to the vote.

And the Senate Adjourned

Until Tomorrow!

They're probably all going home to see Kentucky Tonight at 8:00 PM

Scheduled Guests:

Kenneth Troske, a University of Kentucky economics professor

Justin Maxson, president of the Mountain Association for Community Economic Development

Tim Yessin, a member of the board of the Bluegrass Institute for Public Policy Solutions

Brigitte Blom Ramsey, director of the Kentucky Tax and Budget Initiative for Kentucky Youth Advocates

KEY VOTE: HB 1

The Kentucky Club for Growth encourages you to contact your legislators and encourage them to vote "No" on HB 1, the budget proposal.

The special session of the general assembly was called to address a supposed $1 billion shortfall. This bill increases spending. This bill does not identify specific spending cuts.

It is completely irresponsible to increase spending when a shortfall is projected, regardless of expectations of potential new revenues.

The Club may score many of the votes of this session, but this vote is guaranteed.

UPDATE: 5:44 -- And the Club will expose all members who voted against having a fiscal analysis before they voted on the bill

Moving Towards a Conference?

The Kentucky House has finally passed the slots bill (HB 2) along to the Senate, before the Senate President's deadline of 4:30 PM. The Senate has now commenced a meeting of Senate Appropriations and Revenue Committee for its consideration. The Senate will then return from recess and vote on the measure.

Meanwhile, the House has already acted to reject the Senate's amendments to HB 3 and HB 4 and return them to the Senate. This is the first step towards resolving the differences between the House and Senate bills.

Stumbo Can't Stop Spending

Greg Stumbo can't stop spending your tax dollars.

First, by failing to do the administrative work required, he's cost taxpayers $240,000 by keeping the session going at least four days longer than necessary.

Next, despite a special session of the general assembly to address a $1 billion shortfall, he's grown government spending by over $1.3 billion:

Also, Stumbo said, thanks to more than $190 million a year the state is projected to collect from slots' net revenue, Kentucky could issue bonds to pay for $1.3 billion in school and university construction projects.

Now we learn that he's spending an additional $230,000 on office renovations:

The Kentucky House is spending about $230,000 to renovate new office space for lawmakers at the Capitol Annex, even as it meets in special session to discuss the state budget shortfall.

House Speaker Greg Stumbo, D-Prestonsburg, authorized the project this year. It involves rebuilding, rewiring and adding new carpet to about 4,100 square feet on the Annex's third floor. Furniture and electronics costs have not been tallied.

...

Lawmakers have forced most of the other occupants to move elsewhere in Frankfort, which costs $408,000 a year in rent paid to private landlords.

Why won't they just go home and stop spending our money?

US Senate non-Candidate Rand Paul to Sign Taxpayer Protection Pledge

Non-candidate for US Senate Rand Paul has announced that he will sign the Taxpayer Protection Pledge. The pledge is a commitment of public officials that they will "solemnly bind themselves to oppose any and all tax increases." While the Pledge is promoted and monitored by Americans for Tax Reform, "the Taxpayer Protection Pledge is actually made to a candidate's constituents, who are entitled to know where candidates stand before sending them to the capitol."

Here is the pledge and Paul's announcement:

I _____ pledge to the taxpayers of the __________ district, of the state of __________, and to all the people of this state, that I will oppose and vote against any and all efforts to increase taxes.”

Dr. Paul’s signing of the Taxpayer Protection Pledge is a momentous occasion for his campaign. It constitutes an opportunity to reinforce Rand Paul’s promise to Kentucky voters that he will protect their freedom and personal liberties with every decision he makes and every vote that he casts. Liberty thrives under limited interference from the government, especially where taxes are concerned, and Rand Paul understands this truth.

June 19, 2009

Senate Passes Bill with Budget, Incentives and Tolls

UPDATED: The Kentucky Senate has passed HB 3 by a vote of 32-0-1. The bill contains provisions of a budget, tolling authority assistance for the equine industry, and a smorgasbord of tax exemptions.

Sen. RJ Palmer abstained due to a conflict of interest. Sen. Kathy Stein passed because she felt she did not have adequate time to examine the legislation, or the opportunity to offer amendment.

There is no greater admission that Kentucky's tax code is unattractive to business than the accumulation of tax exemptions contained in this bill. Picking winners and losers by carving out tax relief for favored industry is not a way to make Kentucky attractive to new business.

This sort of effort only perpetuates Kentucky's problems by emphasizing our political system's greatest faults. Instead of providing a level playing field for competitive industry in a free market, this sort of tax relief puts the focus on being granted specific relief from the government.

It becomes more important to invest in a good lobbyist than to invest in a good business plan.

The result is a system increasingly focused on maintaining relationships with politicians rather than holding politicians accountable for creating good policy. These relationships increase the barriers to new investment as new companies don't have the established relationships of their competitors. A lobbying industry is created and maintained as existing relationships become a necessary requirement of doing business.

The bill also contained provisions to allow tolls for "megaprojects", and new taxes on gambling to improve purses for horse racing, both items the Kentucky Club for Growth is concerned about. On the other hand, the Senate managed to address all of the items of the session's call while the House has not.

And so Kentucky remains the same as it always has been...

House Leaves Without Passing Slots Bill to Senate, Costing Taxpayers $240,000

Senate President David Williams was hamstrung by the House, which left town for the weekend without passing along HB 2, the slots bill passed out of the House.

Williams has set a deadline of 4:30 on Monday to receive the bill for consideration, otherwise he plans to adjourn sine die.

Williams pointed out that in between today and Monday, $240,000 will be spent. He also pointed out that the Governor is one of many who is aware that HB 2 does not have votes to pass the Senate. Without naming them directly, he scolded the House leadership for adding $1.4 billion in additional spending to the budget in the time of a supposed $1 billion shortfall, and also for failing to deliver the slots bill in a timely manner.

.

Earlier in the day Governor Beshear had said:

"An issue that is this important deserves the deliberation and vote of everyone. Now the question is will the Senate give everyone in its chamber the same privilege - an up-or-down vote on an issue of such importance to our Commonwealth?"

The House's failure to do the administrative work has prohibited the Senate from acting according to the Governor's wishes for four days, at a cost of $60,000 each day the session does not adjourn.

House Passes Slots 52-45, Senate A&R Prepares Budget

The bill to allow slots at racetracks passed the Kentucky House 52-45. Page One has a summary of the stemwinding debate.

Now with all of the lesser priorities out of the way, maybe the House will move onto what the Governor said was the "biggest, most critical" issue: the budget.

Meanwhile, the Senate Appropriations and Revenue Committee is voting on a budget proposal combined with some tax incentives -- including incentives to the horse industry -- and a bridges proposal rolled up together. Some Democrat Senators are complaining about the procedure, but their complaints are answered by Senate Leadership simply with: "This is what happens when a special session is called without prior consensus on its agenda."

2:52 PM - and Senate A&R reports the bill (HR 4 - Senate Amendment) out with favorable expression.

It seems that the Senate may stick to the five day minimum. If they do, they deserve praise for ending this unnecessary session, regardless of its outcome.

June 18, 2009

The Misplaced Priorities of the Kentucky House

On Monday, Governor Steve Beshear addressed the commonwealth and a joint session of the General Assembly. He said:

In short, day by day, our people are suffering.

We must act immediately to address these issues, to do everything possible to help families survive while at the same time finding ways to make strategic investments that improve the lives of Kentuckians.

[snip]

The first piece of legislation, by far the biggest and the most critical, is to balance the budget for the fiscal year that begins in just two weeks.

Day by day people are suffering and the first and most critical piece is to balance the budget.

Yesterday, the House voted on tolls and tax giveaways.

Today, the A&R Committee considered a bill about slots at racetracks.

There's not much chatter about the "biggest and most critical" piece of legislation, which we might see tomorrow...

Slots Bill, Session a Joke

As we put it at the rally yesterday:

"This session was a failure before it began. It is a failure of imagination, it is a failure of ideas and it is a failure of leadership."

While Greg Stumbo piles pork onto the slots bill as well as a list of schools to construct (that would be constructed in that priority with or without the bill), casino opponents laugh:

Rep. Stan Lee, R-Lexington, called the addition of the school construction dollars to the proposal "shameless."

"If they really believed in their bill, they should have sent it out clean," said Lee, who opposes slots at tracks.

KYWordsmith.com reports that the slots bill will arise like the stimulus: they're going to vote on it without anyone having read it!

What will end this $60,000 per day waste? Page One reports that Senate President David Williams has an endgame:

We hear that Senate President David Williams asked for a sin die resolution yesterday. The deal is, as Williams has hinted previously, that he'll be adjourning the special legislative session this Friday.

There are rumblings among both Democrats and Republicans in the House and Senate that the Senate President will accept the economic development bill and attach the Governor's budget.

Let us hope this is the case, and that Williams keeps the tax giveaways to a minimum.

Kentuckians at Capitol Urge Quick End to Special Session

We had a great rally of about 200 at the Capitol on Wednesday. Here's the Kentucky Club's press release about the event:

Kentuckians at Capitol Urge Quick End to Special Session
Hundreds Gather on Capitol Steps to Encourage Real Solutions

FRANKFORT, Ky. - Today at noon Kentuckians gathered on the front steps of the Capitol in Frankfort to urge a quick end to what they see as a wasteful special session. Speaking to the approximately two hundred assembled were Kentucky Club for Growth Executive Director Andy Hightower, kyprogress.blogspot.com author David Adams, and WLAP radio host Leland Conway.

"We're tired of focusing on how much money the government has instead of how many jobs are being created. We're tired of using an economic crisis as an excuse to advance pet political agendas. We are tired of spending $60,000 a day on nothing useful, nothing that could really make this state a better place," said Andy Hightower.

"In his address at the start of the session, Governor Beshear said passing the budget should be simple because they had already given him the authority to spend in the regular session," Hightower continued. "I guess he's just called them all into town because he wants to hear it again. That's $300,000 of vanity, folks."

While the Kentucky Club for Growth recognizes the usefulness of some items of the agenda, none are urgent. All votes in the special session will potentially be included on our 2009 Legislative Scorecard because the session itself is not a responsible use of taxpayer money.

"None of the agenda addresses a critical single issue facing the commonwealth," said Hightower. "This session was a failure before it began. It is a failure of imagination, it is a failure of ideas and it is a failure of leadership."

"We're here to demand real change, and if real change is not on the agenda, than it is time for them to go home, and stop wasting our money."

June 17, 2009

Rally at the Capitol at NOON

On March 21st, 1200+ people rallied in Lexington to protest reckless spending and the tax hikes that had just rushed through the General Assembly.

On April 15th, thousands of Kentuckians rallied in 20 cities across the state to say that no society has ever taxed and spent its way to prosperity.

TODAY, let's rally where they can't miss us: in front of the Capitol while they're all there spending the stimulus and avoiding the real problems facing the state!

What: Freedom Rally at the Capitol
When: 12:00 PM June 17th

This is the most important event to date. We're showing up on their doorstep. We need to show them we're serious and that we're not going away.

June 16, 2009

Don't Forget your Nominations for Comrade of the Month

We've received some good nominations for our inaugural Comrade of the Month Award, but we need more!

Each month, we'll take nominations from members, and put them to a members' vote at the end of the month.

Nominees can be public officials or really anyone who is advancing the kind of anti-growth policy that is keeping Kentucky in poverty and making our commonwealth an unattractive place for economic growth. Since we are the Kentucky Club for Growth, we'll focus on Kentucky officials and actions by them that affect Kentucky specifically.

So, throughout June, especially here during the special session, keep an eye on the goings-on in your city, in Frankfort, and throughout the state, and send us examples of people and policy standing in the way of prosperity.

If you have a good candidate, email me.

Government Taking of Private Property Struck Down

In 2008, we scored the original house vote on HB 608, and then the votes on HB 704 which included the original provisions of HB 608.

HB 608 allowed the state to confiscate the value of traveler's checks that had not been used in three years. Previous law required seven years before the state could confiscate the checks as "unclaimed property." We wrote:

Travelers' checks are not "unclaimed property" but property of the bank that sold them until they are claimed. While many may point to alignment with other states, this is a government taking of property.

We asked one legislator how in the world so many legislators could support the state taking someone's property so outright, and he explained that the taking is not from the traveler's check owner, but from the bank, which made it OK. Right.

On Monday, a federal court agreed with us, not only striking down the three-year time limit, but also the previous seven-year limit:

A federal judge barred Kentucky on Monday from seizing old traveler's checks as abandoned property after seven years instead of 15, saying the state changed the law in an effort to raise money instead of to reunite citizens with lost goods.

It marks the second time in three years that a court has rejected efforts by the legislature to shorten the waiting time before the state can seize old checks and cash them.

Traveler's check issuer American Express challenged the changes both times, winning in state court in 2007, then it challenged a revised law passed later that year in federal court. American Express challenged the statute in 2008, saying the law allowed Kentucky to improperly take the uncashed checks.

"Because it is clear that the state's objective was to raise revenue rather than to reunite citizens with lost property, (the law) does not satisfy rational basis review," U.S. District Judge Danny C. Reeves wrote in a 15-page opinion.

Score one for private property rights over "revenue enhancements"

Rick Rand: Nicer Than Pelosi

Our federal representatives have deserved great scorn for passing a $800 billion stimulus package without reading it.

While Governor Steve Beshear has failed to provide language prior to the session for our legislators to consider, House Appropriations and Revenue Committee Chairman Rick Rand shows he's much nicer than that Nancy Pelosi:

Rand said the House was going to let its members look at both the slots and budget bills before voting on it.

"We felt that the caucus deserved a good run down of the budget bill and the slots bill," Rand said.

In reality, this is Rand's delaying tactic, which he forecast last night in an interview with KET's Renee Shaw. Rand committed to hearing the economic incentive bill and the tolls bill today, but not the budget. If tomorrow is the first day the budget is heard in committee, than they will either have to vote on it in committee and on the floor the same day in order for the Senate to have time to act by Friday, or he will effectively push the session into extra days.

The House controls the process until the budget is in the Senate, so look for them to use it as the only leverage they have.

Like Lottery, Gambling Tied to Education

In a story broken last night by kywordsmith.com, we learned that the expanded-gambling-for-churchill-only advocates are trying to make everyone remember how the Lottery disappointed everyone:

KY Wordsmith has learned that Governor Beshear's original bill to allow gambling in Kentucky is being restructured in order to apply more political pressure on state legislative leaders. Doubtful about having the needed votes for successful passage, House Democrats are now working to add a provision that would directly tie a percentage of the tax revenue received from slot machines to the eventual construction of new facilities for dozens of category five schools across the state. Category five schools are recognized as those schools that are in the poorest condition.

Ah, Kentuckians have such fond memories of gambling promises to fund education. That's a sure-fire winner.

June 15, 2009

Stumbo Forecasts Quick End to Special Session

Despite our dismay with the unnecessary special session, there is reason to believe that even Speaker Stumbo expects it to be brief and contain little more than passage of the budget.

After Governor Beshear's speech, Renee Shaw conducted incredibly great interviews with Senate President David Williams, Speaker Greg Stumbo and House Appropriations and Revenue Chairman Rick Rand.

After Williams made a number of great points like:

  • $200 million in cuts is not very much in a $9 billion budget
  • Which means that there should be no noticeable change in delivery of services
  • We may be missing an opportunity to make some real cuts
  • There's no reason for the session to last beyond Friday, and that
  • Anything beyond the budget can be handled in January

Shaw pressed Stumbo on the possibility that Williams put forward: that the budget and some elements of the economic incentive would be all that passed. Shaw asked Stumbo if he would consider that scenario a successful session.

Stumbo declined to answer the question and instead offered that he agreed with the Governor that the session's primary purpose was to deal with the budget and that 'the process itself helps everyone prepare for the future' (paraphrased).

How's that for an admission of it being over before it starts?

Special Session Begins With a Speech and a Party

Tonight, Governor Beshear gave a pre-taxpayer-funded-party speech to a joint session of the General Assembly.

As the speech began, a fire alarm was going off in the Capitol, Senate President David Williams concluded his introduction with "Fire 'em up Governor," and Governor Beshear paused before beginning a good speech. It was well-written and well-executed and it concluded strongly with Governor Beshear displaying emotional pride about the birth of his second grandson, William Bradley.

Congratulations and best wishes to the whole family.

That said, there's plenty of reason to be fired up.

The governor began with an explanation for the availability of special sessions in the law, and used that as justification for his. He said that special sessions were created in the law for moments of "business so urgent, needs so compelling and opportunity so auspicious" and "today without question is such a moment."

As you might expect, we question it.

In fact, after the governor laid out his four agenda items for the session: the budget, a mixed bag of tax incentives, new tolls and gambling, he undermined his very reason for calling the session.

In explaining the ease with which he expected the legislature to deal with the issues, he said "My budget bill spends federal stimulus dollars in the way that you authorized in the regular session earlier this year."

He is already authorized to spend in the way he proposes to spend!

There is nothing more to the calculus in the necessity of the special session than that. There is no reason to have everyone in Frankfort.

If we all agree that the budget was dealt with in the regular session, then there is no "business so urgent."

Outside of the budget, is gambling, NASCAR, toll roads or incentives for Hollywood a "need so compelling?"

Is there anything "auspicious" about this moment other than it is the moment that the Governor had been scheduled to testify in the Lawson trial?

The special session is a farce, and we need you at the Capitol on Wednesday at noon to help us say so.

June 12, 2009

Flag Day in New Richmond, OH

If you're looking to celebrate liberty and our national symbol this Flag Day (June 14th), New Richmond is the place to be!

Their celebration lasts from 12-6.

At 12:00, George Washington is scheduled to speak, and Thomas Paine is at 3:00!

Who couldn't use a little General Washington and Common Sense?

Sen. Thayer: Let's Add Prevailing Wage to Session Agenda

Over at the Kentucky Opportunity Coalition, Sen. Damon Thayer (2008 rank #2) writes:

Frankfort is already discussing options from expanded gaming to additional budget cuts to tax reform to meet these looming challenges. It would be my suggestion, however, that we first dedicate ourselves to maximizing every dollar we invest in Kentucky's future.

Let us look at an example. According to a report by the Legislative Research Commission, Kentucky's prevailing wage laws artificially inflate school construction labor costs by 21 percent. That means that 21 cents of those dollars are directed at inflated wages as opposed to going toward investments in larger schools, enhanced technology, more energy efficient facilities and an overall better environment for Kentucky's children to learn in.

Read the rest.

Maybe someone at the mansion party can suggest to the Governor that all options for improving Kentucky's budget should be on the table.

June 11, 2009

Special Social Session

Whenever the General Assembly meets in regular session, lobbyists from across the state hold nightly receptions for legislators to attend. All of these events are published for the legislature as the "social calendar".

I was surprised to learn that the five-day special session has a social calendar.

I was more surprised to learn that half of that calender will be funded by taxpayers!

David Adams has the scoop:

In a tribute to his own tone-deafness, Gov. Steve Beshear is going to throw a big party at the Mansion for his friends next Monday, the first day of his wasteful special session. The party is set to start as soon as the legislature adjourns for the day.

You probably aren't invited. But if it's any consolation, you get to pick up the tab.

See the social calendar on kyprogress.

Pouring $1,000,000+ of Your Tax Dollars Into the Ground

Lexington's City Council is debating whether to accept a state grant to build sidewalks on Tates Creek Road.

In an act of media oversimplification, the Herald-Leader opined recently that such a choice should be a no-brainer.

Unfortunately, not thinking is precisely the problem.

We like sidewalks. But this project is another example of poor planning and misplaced priorities.

The project will cost the city $200,000 to match an$800,000 state grant. Some important issues that were not planned for and are not covered in the cost of the grant are:

  • relocating 100 utility poles
  • purchasing additional right-of-way
  • relocating water lines for fire hydrants
  • removing some very old trees on homeowners property

Has either the state or the city actually analyzed the costs involved? No.

So here's a $200,000 budget item that will balloon into more spending as these additional costs are encountered, all for a project the residents of the road frankly do not want.

--Not to mention $800,000 in state transportation funds that could also serve a better purpose.

Meanwhile the city is struggling to pay for firefighters and police, has a parks system in need of repair, plenty of potholes left over from the ice storm...We can think of plenty of ways to spend it better.

This is a small but important battle against wasteful spending. At 7:00 PM tonight 6/11, the council will meet at City Hall, and we encourage you to attend to speak against this proposal.

If you can't make the trip, or even if you can, contact the council. You can email all the council members at once via councilmembers@lfucg.com, or go here for their individual contact information.

Thanks for your action. It shouldn't take this much work to protect our tax dollars, but sometimes it does.

June 10, 2009

Session Will Not Address Real Problems

We wrote recently about the fact that nothing put forward in the special session demands the sort of urgency that would require a special session, and we stand by that analysis.

Jacob at Page One Kentucky shares the feeling that this session will be a waste of $300,000:

It really is like Groundhog Day. Same factors of 2008 are in play today. Our economic outlook is way more bleak but the push for expanded gambling is hardly stronger. But the big thing? Greg Stumbo and the rest of House leadership will blame someone else when failure is upon us.

And Kentucky is left in a rut. But we're ready to flush $60,000 per day down the toilet for a special session.

Want would be a better use of our legislator's time and our money? David Adams has a list of more pressing concerns:

Kentucky's unemployment benefits deficit of over $207 million is getting bigger every week. This isn't a smoke-and-mirrors "shortfall" game. This money will have to be paid back to the federal government in the next state budget.

Continuing to throw up across-the-board spending cuts as Gov. Steve Beshear does won't solve the problem of solve the persistent problems in jobless benefits, Medicaid, or public employee benefits.

Eliminating programs that don't work and improving spending accountability provide opportunities we can't continue to ignore. We should begin with stopping corporate welfare, repealing prevailing wage, ending certificate of need, and move quickly toward justifying every dollar of K-12 education spending. Also still waiting for Gov. Steve Beshear's promised spending efficiency study, transparency web site, and a serious approach to the $30 billion public employee benefits underfunding.

June 9, 2009

How About that Stimulus?

From Innocent Bystanders via David Adams:

Read the whole post.

Glad we're spending all that extra money on crime victims, aren't you?

Kentucky Club for Growth Comrade of the Month Award

For a few months now, the national Club for Growth has awarded a "Comrade of the Month" award "to the person who best lives up to the policies of big-government redistribution and restrictions on economic freedom."

Past award winners include:

THE COMRADE HALL OF SHAME
Apr. 2009 - House Speaker Nancy Pelosi
Mar. 2009 - President Barack Obama
Feb. 2009 - Senators Arlen Specter, Olympia Snowe, & Susan Collins
Jan. 2009 - Rep. Barney Frank

Here is their page.

We like this idea, and think we should institute it in Kentucky.

Each month, we'll take nominations from members, and put them to a members' vote at the end of the month.

Nominees can be public officials or really anyone who is advancing the kind of anti-growth policy that is keeping Kentucky in poverty and making our commonwealth an unattractive place for economic growth. Since we are the Kentucky Club for Growth, we'll focus on Kentucky officials and actions by them that affect Kentucky specifically.

So, throughout June, especially in these middle weeks, keep an eye on the goings-on in your city, in Frankfort, and throughout the state, and send us examples of people and policy standing in the way of prosperity.

We're eager to hear from you!

Herald-Leader Says "Tax Reform" and Doesn't Necessarily Mean "Tax Increase"

Herald Leader columnist Tom Eblen penned a column this Sunday about the need for tax reform in Kentucky. Often when folks like Tom Eblen say tax reform it's their way of avoiding saying tax increases, especially on employers, to pay for more government spending.

This time however, he rejects the Representative Jim Wayne (2208 rank #90) make sure the "rich" are paying more approach and votes in favor of a proposal by Representative Bill Farmer (2008 rank #10).

Farmer is advocating abolishing income taxes in Kentucky. In exchange, the sales tax would be applied to more things, especially services. In his version, the sales tax would actually be reduced by 0.5%, from a 6% tax to 5.5%.

Abolishing income taxes in Kentucky would make the state a very attractive place to live and locate your business, and a broader sales tax is a good approach because sales taxes are discretionary. That is, you are only taxed on what you choose to consume; you don't have any choice about making an income.

Farmer retains exemptions on essentials like groceries and health care. The Kentucky Club for Growth is concerned about some of the services that are included, but appreciate Farmer's effort in beginning this dialogue about what would be a more business-friendly tax code in the state.

Surprisingly, Tom Eblen has caught on as well:

While I admire the social justice idealism behind Wayne's plan, I think Farmer's approach would be better for Kentucky's future, for many reasons.

Farmer's plan makes Kentucky more economically competitive with other states. It encourages people to make money and save money. It encourages businesses and financially successful people to come here and stay here, increasing the amount of money that will be spent on taxable goods and services.

Farmer's plan would be easy for the public to understand. It also would be an easy, cheap and effective way for the state to collect revenue. As the economy grows, tax revenues would grow with it.

It would be important that lawmakers keep such a sales-tax system "pure" -- in other words, not exempt some products and services for reasons other than to protect poor people. Otherwise, the special-interest lobbyists will have a field day and the system won't be fair.

Also, it would be important to remove many existing state taxes and fees that unfairly target -- or exempt -- certain businesses, products and people.

Well said.

June 8, 2009

Assistance to Crime Victims = Creating Jobs?

We noted in a recent email (sign up above) that Governor Beshear certified to President Obama that all stimulus funds would be "used to create jobs and promote economic growth."

In another example of how ridiculous this was, the Governor has provided us with another bit of evidence that the stimulus was nothing more than an effort to spend as many taxdollars as possible:

Gov. Beshear announces nearly $800,000 in stimulus funds for crime victim grants

FRANKFORT, Ky. - Gov. Steve Beshear today announced that nearly $800,000 in stimulus funds would be available for supplemental public safety grants through the Victims of Crime Act (VOCA) Victim Assistance grant. These grant funds will provide funding opportunities for victim services projects throughout the Commonwealth.

You've been robbed! Here, have some stimulus. Go create some jobs!

Beshear Blogs

You've probably caught wind of the news elsewhere, but Governor Beshear now has a blog.

It's good of him to add this outlet, and we'll certainly enjoy making comments.

We think he might even be actually contributing himself. His first entry betrays a bit of the pompousness that we are used to hearing when he speaks:

It's a focused agenda, with the top priority being to balance a budget that will begin July 1 with revenue predictions that fall a billion dollars short. I think we can do it without raising taxes and without decimating our education, public safety and health care programs--while saving some federal stimulus dollars for future years. We'll see if the legislature agrees.

I've got a brilliant plan of saving everything without any pain or sacrifice. Let's see if that legislature is smart enough to agree with my brilliance.

Would any staffer worth having allow the governor to ridicule the legislature, however subtly, after calling an extraneous session that certainly caused some canceled family vacations? We don't think so...

June 5, 2009

The Miracle of Slot Machines

Whether or not you approve of expanded gambling, you've got to think this statement from our Governor about its virtues is over-the-top:

"As Governor, I cannot - and I will not - stand idly by and let that happen. Not without a fight. This proposal would allow thousands of working-class Kentuckians to continue to provide their families with a roof over their heads, food on their tables and the ability to send their kids to school."

Slots = a chicken in every pot! Poverty in Kentucky will be eliminated!

Dogs and cats will get along, children will never need braces, who knows what else is in store if we bring one-armed bandits to Kentucky?

We expect this proposal to have a hard time passing if the Governor does not take the surrounding concerns seriously.

Governor Adds Slots to the Call

Surprising no one, Governor Beshear has added slots to the call of the special session. Here's the text:

June 4, 2009

Dear Colleague:

Today I am adding to the call for the recently announced special session a proposal to allow video lottery terminals at Kentucky horseracing tracks. I know some of us have differences of opinion on this issue. However, we all must recognize the dire straits of the Kentucky horse industry, which is not only Kentucky's signature industry, but one that provides 100,000 jobs to hard-working Kentuckians and $4 billion in revenue to the Commonwealth. There is no more urgent time to address this pressing issue, and, quite frankly, if we do not, I fear horseracing becomes to Kentucky what the automobile industry has become to Michigan - its former signature industry.

In addition, as I discussed yesterday, Kentucky's revenue outlook is grim. According to estimates from the Consensus Forecasting Group, we will not return to FY08 revenue levels until FY12, which means our efforts to balance the next two fiscal years could impact our citizens and economy in ways that are devastating. Additional revenue from this gaming proposal would greatly ease the burden we face. However, this is not the paramount argument for this legislation. For me, this is about saving an industry that we cannot afford to lose and keeping Kentucky the Horse Capital of the World.

Please find attached today's press release, as well as the proclamation adding this topic to the call for the special session. If you have any questions or concerns, please reach out to me or my office. I expect a vigorous debate. If there is a better idea that secures our place as the pre-eminent location for horses in America, I am open to discussing it. But time is of essence, and right now, this idea is what's on the table. It's time to vote on it - up or down - with full knowledge of what is at stake and at risk.

Sincerely,
Steven L. Beshear

June 4, 2009

Budget Live Blog

We've had some technical difficulties, but we'll get it up on tape delay...

Starting at 3:20, we'll fill in the top soon...

3:20 Rep. Graham wants Lassiter to agree that these are short term solutions. Lassiter says we are working to maintain our priorities. Graham says he's been here seven years and Kentucky needs long term policy. Says the gov has added slots and that is a long term vision. Graham says that state employees have been making a sacrifice for a long time. Then asks about the unpaid holidays threshold. Lassier says it's a natural breakpoint. 85% make less. Avg sal is 37,000

Graham asks how much a 1% pay increase cost and whether it exceeded the 11mil savings from days off.

Rep. Comer tried hard to look interested in what Graham has to say.

Graham says it pained him to raise taxes on his local alcohol industry.

And talks for 10 more minutes. Wants 1% raise suspended instead of unpaid holidays.

Unpaid holidays are a crafty new version of the furloughs.

Lassiter says governor told us he is adding slots for the horses, not because we need revenues.

House Appropriations and Revenue Today at 1:00

We know how exciting an Appropriations and Revenue meeting sounds, and so we're considering trying to liveblog it. It's at 1:00PM eastern. Here's the agenda:

  1. Call to order and roll call.

  2. Discussion of the revised revenue estimates.

    • Dr. Larry Lynch, Consensus Forecast Group

  3. Discussion of the receipt and use of federal stimulus funds.

    • Ms. Mary Lassiter, State Budget Director

  4. Discussion of 2010 BR 2.

    • Representative Jim Wayne

  5. Discussion of 2010 BR 31.

    • Representative Bill Farmer

  6. Other Business. (No Committee Action Required)

    • Memoranda from L. Bart Hardin, Deputy Director, Office for Budget Review: Interim Budget Routine Appropriation Increases for the months of April and May 2009; Interim Budget Allotment Adjustments for the months of April and May 2009; and Interim Budget Other/Emergency Appropriation Increases for the months of April and May 2009.
    • List of Committee Correspondence and Items Referred to the Committee.

  7. Adjournment

Liveblog or not, we'll let you know what they have to say.

June 3, 2009

Dumbfounding Budget Discussion

Today, Governor Beshear met with legislative leaders to outline his plan for the budget. The Herald-Leader reports that:

  • There is agreement that the problem is "manageable."
  • There will be no request for tax increases.

Here's the plan:

Senate Minority Leader Ed Worley, D-Richmond, said federal stimulus dollars will be vital in addressing the budget shortfall.

He said there will be about $50 million in cuts, $12 million of additional spending in various areas and use of the federal dollars.

Got that?

The $1 billion deficit will be dealt with by cutting spending $38 million.

...

I've got nothing to add...

Email me your thoughts: andy(at)kyclubforgrowth(dot)com

June 2, 2009

A Direct Fabrication by Beshear

There are a number of justifiable ways to look at budgets and shortfalls. Governor Beshear has directly cheated in coming up with his $1 billion number, however.

In our lengthy budget analysis, we noted that the budget passed in 2008 included a forecast of $9.1 billion in revenue for FY 2010. But when Beshear announced he was going to cal a special session this number had changed (our emphasis):

Beshear announced his intention to call a special legislative session minutes after an independent group of economists sized up the state's budget woes.

Since the shortfall is greater than 5 percent of the state's $9.3 billion budget for next fiscal year, Beshear said he is required by law to recall lawmakers.

Where did the $9.3 billion come from when the passed budget so clearly states that expected revenues for FY 2010 are $9.1 billion (page one here)?

We've asked around, and the extra $200 million is from the tax increases in HB 144 passed in the 2009 regular session.

In other words, part of Beshear's shortfall is that the state will not receive funds that we never expected to receive in the first place. It's an additional $200 million that wasn't expected to be revenue and wasn't budget for. He might as well say that the shortfall is $2 billion because he had expected to increase taxes $1 billion more in 2009 but didn't. None of it matters because it wasn't part of the budget in 2008.

Further, when Senate President David Williams accused the Governor of overstating things, the Governor responded:

Beshear's office dismissed Williams' argument, saying language in the budget bill enacted earlier this year is clear -- the state is required to compare the revised revenue estimate for 2010, which was issued Friday, with the enacted $9.3 billion budget for 2010.

Williams is mixing numbers from two different fiscal years, the office said.

He's accusing Williams of doing the very same thing that he is doing himself. His claims are not only spurious, but hypocritical.

June 1, 2009

Scare Tactics on State Budget

As you may have heard, Governor Beshear would like you to believe that next year the state will receive one billion less in tax revenues than they had previously thought.

There are many reasons this isn't true, which we'll get into a full analysis this afternoon. But here's the shorthand:

In the 2008 budget, there was about $288 million more appropriated to be spent in 2010 than 2009.

The new CFG forecast reportedly expects about $130 million less revenue in 2010 versus 2009.

A $130 million reduction in income versus 2009 + about a $288 million increase in spending = $418 million.

That is the maximum shortfall anyone can make a reasonable claim for. Later (once we get an actual copy of the CFG forecast) we'll look into what we should actually expect.

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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.