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July 23, 2012

The 2011-2012 Scorecard

For the sixth year, the Kentucky Club for Growth is proud to release our Legislative Scorecard -- our ultimate taxpayer tool to see how your legislators are spending your tax dollars!

While most legislators continue to talk about limited government and cutting budgets, they don't support their rhetoric with their votes in the General Assembly. New taxes, expensive health care mandates, bailout funds and new licensing fees and requirements are continuously supported by the majority of members of the Kentucky General Assembly.

We have ranked Kentucky's legislators based on their votes on these issues of fiscal responsibility and economic freedom.

Follow the links below to see how your legislators ranked. We have ranked the 2011 and 2012 Sessions together in our overall ranking so that you can see how they've voted cumulatively during the budget cycle (and the political cycle). To look at each year's ranking, you can view the individual vote tallies for each year. Additionally, you are encouraged to view the Scorecard Justifications to see the ridiculous, and sometimes good legislation that we score.

Please sign up for our email, and pass these tools along to your friends who are concerned about protecting the Kentucky taxpayer! Follow us on Facebook to keep up with our perspective the policy issues facing Kentucky and the General Assembly.

The Scorecard

2011-2012 House Scorecard
2011-2012 Senate Scorecard

Here are the details on how the two years combine:

2011-2012 Combined House Scores (by rank) (alphabetical)
2011-2012 Combined Senate Scores (by rank) (alphabetical)

Below, you can view the votes for and against each bill scored, by year, and the reasoning behind the scored bills.

2011

Votes by Rank	House | Senate
Votes by Name	House | Senate
Vote Descriptions

2012

Votes by Rank	House | Senate
Votes by Name	House | Senate
Vote Descriptions

 

View the 2009-2010 Scorecard

View the 2008 Scorecard

Posted by Andy Hightower at 10:00 AM | Permalink | TrackBacks

July 20, 2012

A Tax Break Is Not "Spending"

We were greeted with this headline and article from the Lexington Herald Leader today:

Kentucky spent $1.29 billion on economic development incentives over last decade

Kentucky has spent $1.29 billion on economic development incentives over the last decade, mostly in the form of tax breaks to companies that pledged to create jobs, according to a new report shared Thursday at a legislative hearing.

We are not advocates of using tax breaks as economic incentive, preferring instead a competitive tax code that attracts employers and enabled entrepreneurs. Offering tax breaks to certain companies that meet certain conditions is allowing the government to pick winners and losers in the marketplace. Instead of letting the government chose which corporations pay $129 million less in taxes annually, Kentucky could simply cut the corporate income tax rate 36% and expect the same revenues.

But we digress from the point we wished to make, which is that, under no circumstances can keeping the money you earned and not providing it to the state be considered state spending!

The state is not "spending" by not taking your money from you.

The article has other half-analyzed ideas, like:

Kentucky is a tax-friendly state for businesses. The overall share of business profits taken as taxes in Kentucky is 18.2 percent, compared to 19.3 percent on average for the peer states.

We haven't seen this particular study, but we do know that Kentucky has a disproportionally progressive tax system and relatively high state and local income taxes, both of which place Kentucky at a competitive disadvantage when it comes to creating and attracting businesses.

The article conclude with Governor Beshear's Tax Hike Commission Specialist Jason Bailey begging for tax hikes:

Kentucky should throw less money at businesses and invest more in schools, vocational training, transportation and high-speed Internet access, said Jason Bailey, director of the Kentucky Center for Economic Policy in Berea.

Maybe he should move to tax-hike happy Illinois. Although we know he won't find a job there.

Posted by Andy Hightower at 4:56 PM | Permalink | TrackBacks

July 17, 2012

New Accounting Rules Will Expose Kentucky's Pension Failure

It is commonly known that Kentucky is headed to a pension disaster. Years of underfunding a generous defined-benefit plan have left a hole estimated to exceed $37 billion.

The Pew Center for States estimates that Kentucky's plan is 54% funded, far short of the 80% recommendation and fourth-worst in the country behind Illinois, Rhode Island and Connecticut. (Rhode Island, however, is advancing serious reforms.)

Recently, the Governmental Accounting Standards Board issued new rules governing the accounting practices of state pensions, rules designed to expose soft accounting that allows states to be more optimistic than they should. It will eliminate overly-rosy assumptions of market returns, and force underfunded states to assume that their plans will go broke.

From the NY Times:

The new rules are the result of more than five years of work by the Governmental Accounting Standards Board on one of the most contentious topics the agency has ever tackled. The current rules have been criticized for making pensions look more affordable than they really are and creating incentives for governments to take undue risks with taxpayer money.

In many struggling municipalities, the coming changes, which are expected to be ratified by the board on Monday, could lead to credit rating downgrades, making it more expensive to borrow. The rules do not take full effect until 2015, but some governments are likely to adopt them sooner.

While some economists do not think the rules go far enough, Kentucky's pension system will certainly be exposed.

Mr. Attmore declined to predict which states and cities would bear the brunt of the board's rule changes, but said that, in general, it would be those that had failed, year after year, to set aside as much money as their actuaries instructed. Such plans include those operated by Illinois, New Jersey and Kentucky.

Kentucky's current pension system is unsustainable. The time to reform was years ago, and it's about to be exposed.

Posted by Andy Hightower at 10:52 AM | Permalink | TrackBacks

Per Capita State Debt has Doubled in Ten Years

Between 2003 and 2011, the amount of debt issued by Kentucky's government skyrocketed, and the about of state debt obligations per person in Kentucky more than doubled.

In 2003, every Kentuckian was responsible for $996.31 in state debt. By 2011, every Kentuckian owed $2,045 annually. Today, that number is even higher. Here's a chart of the last two decades.

Year	Per Capita State Debt
1990	$746.64
1991	$882.24
1992	$941.76
1993	$1,006.68
1994	$983.55
1995	$979.88
1996	$963.22
1997	$900.07
1998	$903.32
1999	$893.46
2000	$878.52
2001	$974.78
2002	$1,080.88
2003	$996.31
2004	$1,081.43
2005	$1,116.34
2006	$1,213.36
2007	$1,286.27
2008	$1,475.71
2009	$1,583.44
2010	$1,798.17
2011	$2,045.94

This data comes from the 2012-2014 Executive Budget Recommendation from the Office of the State Budget Director, Budget in Brief, page 98.

Posted by Andy Hightower at 9:35 AM | Permalink | TrackBacks

July 16, 2012

Highlighting the Burgeoning Amount of State Contracts

State debt per capita has doubled in the last ten years. Kentucky has the most underfunded pension system in the country, with unfunded pension obligations totaling over $45 billion.

As Kentucky's government continues to underfund its most essential obligations, it continues to expand. The Interim State Contract Review Committee is reviewing the doubling of state contracts in the last two years, hoping to highlight one Beshear-led expansion of unsustainable state spending.

The Commonwealth of Kentucky getting the best return on their investment was the main concern at an interim meeting of the Legislative Research Commission Government Contract Review Committee.

The committee is reviewing over 1,800 contracts worth 1.72 billion dollars, which is almost double the amount two years ago when close to the same number of contracts totaled $978,000,000.

Committee Chair, Senator Vernie McGaha, R-Russell Springs, said that his committee needs to scrutinize the contracts and make sure that the state of Kentucky is getting the biggest bang for the buck.

$1.72 billion is about 6% of all state spending, certainly an area that bears close scrutiny.

Posted by Andy Hightower at 3:38 AM | Permalink | TrackBacks

July 3, 2012

Several Disapointing Proposals for Funding Roads

Two years ago, Kentuckians for Better Transportation asked the following perplexing question about the future of transportation funding in Kentucky:

And so, it is crystal clear: the "plug-ins" are coming. What remains unclear is this: how are they going to pay their fair share for the use of the city streets, county roads, and the highway system?

The traditional system of road financing is that gas tax revenues and titling fees go to the Kentucky Transportation Cabinet and basically create its budget, combined with federal road funds that largely originate from federal gas taxes. At the time we mused:

While there will be no shortage of gasoline consumers in the immediate future, we will face an increasing number of drivers of vehicles that aren't paying for the roads they drive on through this traditional system. And we may have to completely rethink transportation funding in this country.

We feel a fair and equitable system allows citizens to pay for what they use. Which is why we do not think the Kentuckians for Better Transportation proposal makes any good sense.

Kentuckians for Better Transportation, whose 240 members include local governments, road contractors and other businesses, wants the General Assembly to consider adding a fee to annual auto registrations for electric cars and other vehicles that run on fuels other than gasoline.

Stan Lampe, president of KBT, said the fee probably would be $100 to $150.

Placing a fee on the Kentucky owners of a particular type of vehicle has little relationship to the amount of road use in which that owner participates. In fact, a preset fee would only serve as a disincentive to purchase that type of vehicle. Additionally, having the state of Kentucky levy a fee means that only Kentucky citizens are burdened to support roads in a state at the crossroads of our nation. The KBT fee proposal is not a fair assessment for use.

Rep. Hubie Collins, the Chair of the House Transportation Committee, also rejected the idea.

House Transportation Committee chairman Hubert Collins, D-Wittensville, said every state would have to face this issue.

"That's why I think federal legislation is needed," he said. "I would hate to see every state go with its own user fee for next-generation vehicles. You'd get a hodgepodge of fees across the nation. I also am concerned that if Kentucky adopted such a user fee on its own, we might run people out of the state."

Unfortunately, Collins' proposal for more federal control of our transportation funding isn't a good proposal either.

A better solution would be transparent, keep the funding in the state and be tied fairly directly to road usage without requiring any tracking of movement. That may be a tall order.

Posted by Andy Hightower at 12:15 PM | Permalink | TrackBacks

July 2, 2012

Kentucky Energy Policy Failing Kentuckians

The Heritage Foundation recently pointed out that energy-producing states have fared rather well in the recent years of the financial crisis:

Household income rose faster in North Dakota than any other state between 2005 and 2010. Only the District of Columbia -- home to the bloated federal government and overpaid bureaucrats -- had a bigger increase, according to U.S. Census data. Three other energy-producing states -- Colorado, West Virginia and Wyoming -- rounded out the top five.

North Dakota was one of only 14 states (and the District of Columbia) to experience a rise in household income between 2005 and 2010, according to the most recent Census data. The overall U.S. average during that time declined 4.4 percent. (Complete ranking of all 50 states.)

According to the US Energy Information Administration, Kentucky is the fifth-highest energy producing state in the US, right behind West Virginia. Yet while West Virginia has seen a 5.2% increase in median incomes over the past decade, Kentucky has lagged, with incomes barely rising.

Much of this is no doubt attributable to a federal government hostile to Kentucky's production of coal, but that doesn't explain how West Virginia has seen success while Kentucky stagnated. The difference with our neighbor points to a difference in state policy, and a failure on the part of our elected leaders to capitalize on an advantage we all know Kentucky possesses.

Posted by Andy Hightower at 2:40 PM | Permalink | TrackBacks