Legislative Preview

The Herald-Leader has been running a series of articles about the upcoming legislative session.

Links to the articles are below.

Steve Beshear promised a lot of things when he was running for governor; every candidate does the same thing. While Beshear was promising a brighter future Ernie Fletcher was spending state money like a drunken sailor on shore leave trying to buy the election. Beshear won Fletcher lost.

But the responsibility for the current, and ongoing budget mess, lies with the General Assembly. In the last budget cycle the rocket scientists in the legislature approved spending about $9.4 billion dollars this year. This caused a structural imbalance in the budget. They used one time money they won’t have again to pay recurring costs.

Let’s make an analogy here. Suppose I buy a new house with a 30 year mortgage. The house payment is a thousand dollars a month and the only way I can make the payments is to use money in a savings account. The savings account will be empty in a year, but I have a plan.

Here’s the plan:

I get a better job making more money, (the Kentucky economy will get better and taxes will increase) or a rich uncle will die (Casino Gambling), or maybe I can cut back on things like food (slash and burn the existing programs to make up the short fall).

So what’s going to happen?

First, Beshear will balance the rest of the current fiscal year short fall, from now till the end of June, on the backs of the state workers. He may carry this on into the next biennium, but he doesn’t really have a choice, most of the expenses of state government go to personnel costs. Since he has already exempted the educational establishment from the pain, no one will really give a damn if state workers get screwed again.

To be fair to Steve Beshear, this is the traditional method of coming up with money. Previous governors and legislatures have repeatedly used this method of revenue enhancement and it is one of the reasons that the Kentucky Retirement Systems is in the mess it’s in today.

Second, the Universities will increase tuition. That little tax on students and their families will pay for their part of the short fall.

Third, forget all the campaign promises, at least for this legislative session, there is no money to pay for the major promises.

Fourth, an amendment to approve Casino gambling will be on the ballot. If it passes, Casino gambling will at best be a temporary band-aid to stop the financial bleeding. Casino gambling will not solve the problems but it will postpone them for a few years. Since most of the members of the General Assembly have a two year point of view that’s good enough.

Links to some of the Herald-Leader articles:

LEGISLATIVE PREVIEW: First in a series

If forecasts are correct, taxpayers and cigarette makers will plunk about $9 billion into the state's main piggy bank in the upcoming fiscal year, which begins July 1.
Even though that's a $250 million increase over this year, Kentucky's checkbook will still be a bugger to balance, according to those who will dole out the proceeds for education, prisons, pensions and hundreds of other uses in a legislative session that begins Jan. 8.

LEGISLATIVE PREVIEW Issue 3: Health and welfare

One or more unlikely things must happen before Gov. Steve Beshear can honor his campaign pledge to extend health insurance to tens of thousands of Kentuckians.

The national and state economies must improve so much that extra tax revenue gushes into Frankfort. Or Congress must overcome President Bush's repeated vetoes of an expanded State Children's Health Insurance Program. Or Beshear must not only cover the state's current Medicaid deficit -- $389 million for the rest of this fiscal year -- but he must find money on top of that so he can afford to add people to the program.

LEGISLATIVE PREVIEW: Issue 4: Pensions

Senate President David Williams uses scary words like "crisis" and "quandary" in talking about money problems of pension funds for state retirees and teachers. If the problems are not solved, he says, the operative word that will strike fear in the hearts of state retirees will be "bankrupt."

Kentucky has an estimated $18 billion shortfall in the retirement systems that affect 432,000 state employees, teachers and retirees.

LEGISLATIVE PREVIEW: Issue 6: Transportation

Senate Minority Leader Ed Worley bristled when he learned in 2006 that money for the Louisville bridges project would mean considerably less for other state road projects, especially in rural areas.

The Richmond Democrat said he did not think the Louisville bridges are so important that the rest of the state is driving on "red-dog roads."

Such hard sentiments are typical between urban and rural legislators when big-ticket projects in the cities take huge chunks of available transportation dollars from the state's coffers and leave rural areas wanting.

LEGISLATIVE PREVIEW: Issue 7: Ethics

As a candidate for governor, Steve Beshear repeatedly pledged to lead an effort to pass a constitutional amendment limiting a governor's pardoning powers.
Now that he has won the election, Beshear might not even mention the issue when the 2008 General Assembly convenes Jan.