Kentucky Club for Growth
fighting and winning for economic freedom

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February 26, 2010

The State's Spending Problem as a Graph

Earlier, we described the state's chronic overspending problem.

The shortfalls discussed in Frankfort are not the result of some great fluctuation in revenues. While revenues have declined over the last two years, revenues over the last five years have stayed within 2.5 percent of an $8.45 billion average.

The "billion dollar shortfall" is only a result of chronic overspending. Over the same five years, spending has averaged just under $8.8 billion -- a discrepancy that averages out to $350 million (4 percent) annually.

Here, we made it into a graph (vertical axis in billions of dollars)

Chronic Overspending

Quote of the Week: Stumbo Says State Workers Expendable

In case you missed it, one of the current budget proposals being entertained in the Kentucky House is the elimination of over 100 non-merit positions. According to their analysts, such a move would save the state about $10 million over the biennium.

Last Friday, Greg Stumbo explained why he felt this action was possible:

But Stumbo said he has received complaints about some non-merit employees having few job responsibilities. House leaders could provide testimony from witnesses to prove their point, he said.

Many have bragged "that they have nothing to do," Stumbo said Friday.

February 22, 2010

Rep. Wayne Has the Beginning of a Good Idea

Representative Jim Wayne, who is always very forthright with his intentions to raise taxes on those making more than $75,000 in Kentucky, actually brought up the start of a good idea.

In an editorial praising his latest idea to stick it to businesses in Kentucky, the Herald-Leader lays it out:

Wayne's proposals are simple good government.

First, he wants to increase the information legislators get about incentive programs by lifting "the secret seal" thrown over them by the Cabinet for Economic Development.

Some of them might be great investments for Kentucky but no one outside the cabinet — or possibly even inside it — knows what taxpayers are getting for their generosity.

Second, Wayne proposes that each incentive or tax break would automatically expire, or sunset, after eight years.

One year before the expiration date the legislature would review the program to see if it deserves a longer life.

"We do this annually with other things in the budget," Wayne reasons, so why not the giveaways?

That's a very good question. We'd like to hear an answer.

The first idea, that private companies should give away proprietary information in order to receive incentives designed to create jobs, is ridiculous and obviously contrary to the original purpose of the incentives.

But the second idea, of requiring expiration, is the kernel of a genuinely good idea. Wayne limits his proposal to tax incentives. But why not require a sunset on all legislation? Let's change the assumption of immortal government programs to an assumption of government program retirement. The idea that a program might have outlived its usefulness certainly is not limited to tax incentives....

February 18, 2010

The State's Spending Problem

Our editorial was published in Business Lexington today:

Reform should focus on spending
by Andy Hightower

Lexington, KY - In the General Assembly, in editorial boards and among advocacy groups in Kentucky, a budget crisis has created renewed interest in reforming Kentucky's tax code. Many have grown tired of repeated claims of billion-dollar shortfalls in the state budget and have pushed the term "tax reform" as a new name for raising taxes in Kentucky.

There are many good reasons for a new approach to taxation in Kentucky:

• Kentucky is a high-tax state.

• Kentucky's tax base is shrinking.

• The tax code is riddled with exemptions.

• The tax code is particularly unattractive to job creation.

But the idea being pushed by many -- that the tax code should be reformed to support expanded spending in Frankfort -- is simply wrong.

First, we need to separate the idea of "tax reform" from the budget problem currently being discussed in Frankfort.

The budget problem is a spending problem

The shortfalls discussed in Frankfort are not the result of some great fluctuation in revenues. While revenues have declined over the last two years, revenues over the last five years have stayed within 2.5 percent of an $8.45 billion average.

The "billion dollar shortfall" is only a result of chronic overspending. Over the same five years, spending has averaged just under $8.8 billion -- a discrepancy that averages out to $350 million (4 percent) annually.

The "billion dollar shortfall" is not a statement that revenues have decreased by $1 billion; it is only a statement that elected officials would like to spend $1 billion more than they have available.

Read more

February 15, 2010

Monday, February 15, 2010

Legislature builds budget on wishes

Pulaski Magistrates find old practices are illegal...

...are asked to take 33% pay cut...

...still will have higher salaries than most

Middletown taxpayers on hook for private trash pit

Rep. Koenig aims to reduce regulatory boards

Elizabethtown offers tax incentives for new job creation

Henderson grapples with paying overtime for normal working hours

Universities to state: 'We built building, now pay us to operate them'

Stallions leave Kentucky, although fewer stallions overall

Commercial real estate picks up

Rep. Damron questions incentive in Fish and Wildlife fining authority

Texting and driving bill passes House

Rep. Denham recovers from surgery

KACo, KLC oversight bills pass both houses

NKY Convention Center supporters beat heads against budget shortfall

February 9, 2010

"Billion Dollar Shortfalls!!!!"

We finally cracked open the state's "Budget in Brief" document for the coming 2011-2012 budget cycle. The following graph of spending, found on page 16, is all you need to know about why the state is being forced to make cuts.

General Fund Expenditures

View Large Image

February 8, 2010

An Update on HCR 10 -- The State Sovereignty Resolution

An update on the status of HCR 10 from Lexington Kentucky We Surround Them:

Owens, the chair of the Elections Committee where this resolution is, stated that this may be heard on Tuesday February 9th. While they may not come up this time, we need to go down and make sure they do come up next time. Having a bunch of citizens lobby the legislature for a bill that is not even posted yet will send a message. We may get to testify even if the bills are not brought up if there is time at the end of a committee meeting. We are asking if you are available (AND WEATHER IS OK) to come out to the Capitol Tuesday February 9th and lobby for this resolution and sit in on this committee.

The resolution currently is not posted to be heard in the committee yet. It most likely will not come up Tuesday the 9th. When it is posted we will inform everyone so you can make arrangements to be there. In the mean time please still show up Tuesday if possible and lobby them in person. Also keep up the E-Mails, Phone Calls, & most importantly Personal Letters.

Let these members know we want them to prove they believe Kentucky knows better than Washington and that the constituents of this commonwealth demand a vote on HCR10.

Election and constitutional committee
• Rep. Darryl T. Owens [Chair] - (502) 564-8100 Ext. 685
• Rep. Joseph M. Fischer [Vice Chair] - Co Sponsor of Resolution
• Rep. Ron Weston [Vice Chair] - (502) 564-8100 Ext. 629
• Rep. Kevin D. Bratcher - Co Sponsor of Resolution
• Rep. Larry Clark - (502) 564-7520
• Rep. James R. Comer - Co Sponsor of Resolution
• Rep. Mike Harmon - Co Sponsor of Resolution
• Rep. Melvin B. Henley - (502) 564-8100 Ext. 611
• Rep. Mary Lou Marzian - (502) 564-8100 Ext. 643

Contact them and encourage them to hear HCR 10

Monday, February 8, 2010

Environmentalist attorneys tax Louisa: Judge orders fees of over $120 per citizen

Gerth discusses Senate shenanigans

Hardin County benefits from Ft. Know expansion

Alltech "Best Places to Work"

Chad Crouch files in primary against Buford

New Sen. Webb has rough week

County officials worry about budget shortfall

February 3, 2010

Julian Carroll is a Grumpy Man

From CNN, you really have to watch

February 2, 2010

Legislators Pretend Governor is Relevant

Last night, in a show of partisanship, the House Democratic leadership met with democratic Governor Beshear to pay lip service about how serious the budget situation is:

House Democratic leaders met with Gov. Steve Beshear for about 45 minutes Monday afternoon to see if they can work together on a plan to balance a state budget facing more than a $1.4 billion shortfall for the next two years.

"It went well," Beshear said after meeting with Speaker Greg Stumbo, D-Prestonsburg, Speaker Pro Tem Larry Clark of Louisville, Majority Leader Rocky Adkins of Sandy Hook, Whip John Will Stacy of West Liberty, Caucus Chair Bob Damron of Nicholasville and House budget chair Rick Rand of Bedford. He said he and lawmakers tried to find "common ground on the budget."

If you doubted that the legislators really didn't care about the Governor, Beshear himself explains that they ignored him:

Both said the discussions didn't delve into details about specific funding cuts or which programs or services might be hardest hit. Stumbo said there was no discussion of layoffs in the meeting.

"We really didn't talk about details," Beshear said. "We just talked about how serious the situation was and the fact we're facing a budget shortfall of about a billion and half dollars over the next two years."

That's right, 45 minutes of sitting in a circle agreeing that the situation is serious.

Maybe next time they'll talk about all the snow we've gotten, how the Cats are doing, and how nice it would be if the economy were better. What else passes for small talk these days?

February 1, 2010

Steve's Just a Gov Who Cain't Say No

New favorite website: the Editor's Notebook of the Nelson County Gazette's Jim Brooks. Someone wrote this song and he published it:

I'm Just A Governor Who Can't Say No

By A. Nonymous (with apologies to Rodgers & Hammerstein)

I'm just a Governor who can't say no
Gambling is my favorite thing,
With or without the people's votes
I'm gonna hear those slots ring!

For a while I tried to build sympathy,
By overstating our financial woes.
But I found that voters don't believe
An honest politician -- heaven knows!

I'm just a Governor who can't say no
I'll keep on hammering this cause
More gambling will cure our money blahs
We don't need to change the stinkin' laws
I can't say no!

That's just the beginning. Read (and listen) to the whole thing here

Monday, February 1, 2010

Legislative day 18

KU rate hike delayed until July

Magistrate candidates in Somerset want to give salaries back

Legislature to repay debt with more debt

Joe Gerth blames Senate for constitutional requirement to start budget in House

Tolling authority to meet

One of governor's dozens of taskforces offers useless instructions on energy

Stimulus spends over $74,000 per theoretical job in Kentucky

Al Cross urges TV news to do better

Homebuilders wait for rebound

Derby Museum to reopen

Obama unable to control spending for a decade

Richmond schools prepared for state cuts

City-owned golf part of Richmond's deficit

Very few Dems run in Boone County

Quality Sites

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Raising Farrahzona
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Page One Kentucky
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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

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