KyKurmudgeon

Budget talks: boring with flashes of spice

Since legislative leaders have now taken their budget discussions behind closed doors, I guess they wanted to save us from any more of the boredom I mentioned in Sunday's column (below).

FRANKFORT — This and That, The Rest in Peace Casino Gambling Edition:

Journalists have to ask the question. It comes with their whole First Amendment, freedom-of-information, open-records, open-meetings, public’s-right-toknow, let the sun shine on government at work territory.

So, as a 60-day budgetary session of the General Assembly nears an end, the question is always asked: Will meetings of the inevitable budget conference committee that works out differences between the House and Senate spending plans be conducted in the open?

Some years, the answer is yes, as it was this year. Some years, it is no, as it was in 2006. A flip to yes or a flop to no basically depends on which answer best serves the political agenda of legislative leaders.

This year’s openness largely arises out of Senate President David Williams’ recent assertions that House Appropriations and Revenue Committee Chairman Harry Moberly pushes the ethics envelope by promoting the agenda of his employer, Eastern Kentucky University, during budget conferences — an assertion Moberly denies.

Senate R’s and House D’s want to prove the other side wrong in full view of witnesses, including journalists, who asked the question not so much because they expected (or even wanted) an affirmative answer but because they felt a responsibility to do so, considering the turf they occupy.

But watching the first few days of the conference committee’s work — which may or may not have produced an agreement by the time you read this — I was reminded why I did not throw a tantrum over the public’s right to know when legislative leaders closed the doors to outsiders during the 2006 conference meetings and why I probably won’t throw a tantrum if they revert to their secretive ways in 2010. Watching these conferees do their work in the open can be boring — excruciatingly so.

Sure, there are flashes of must-see viewing, particularly when Moberly and Williams start snapping at each other. And the policy issues that are being discussed are important.

But watching the conferees review and rereview the minutiae contained in more than 150 pages of documents outlining the differences in the two chambers’ spending plans is mind-numbing.

Speaking of those exchanges between Moberly and Williams, the first one came Wednesday evening, oddly enough just after I had jotted in my notebook as I watched the session on TV that the talks were genial and good-natured early on, with no flare-ups between the two.

Then, Williams said, “You were looking at me,”

Moberly responded, “I wasn’t looking at you, and I wouldn’t choose to do so if I didn’t have to.”

It went downhill from there. Later Wednesday evening, Moberly, speaking generally about the differences between the House and Senate, said, “We want to do these good things, but we don’t want to pay for them. One of us is being irresponsible.”

Williams immediately chimed in with, “We’re praying for you so that you won’t continue to be irresponsible.”

“Thank you, Mr. President,” Moberly responded. “I appreciate that. I appreciate your smart-ass remarks.”

Thursday, the verbal sparring continued.

“Your attitude is not helpful to the process,” Moberly told Williams.

Williams responded by addressing House Speaker Jody Richards: “Mr. Speaker, we haven’t made any personal statements against any of your members, and I wish that you could get your chairman under control and talk to him and have him take a couple of deep breaths.”

“I don’t appreciate that, that I need to take a deep breath,” Moberly replied. “You need to take it as much as I do.”

Such exchanges are far from boring. They’re also far from inspirational.

Among the best of the blogs

I'm honored. Enough said.

http://blog.washingtonpost.com/thefix/2008/03/new_and_improved_best_of_the_s.html#more

Legislative quickies

1. Saw this quote from Senate President David Williams in a story by Gregory A. Hall of The Courier-Journal did on the fees and assessments paid by racetracks: "We understand that the smaller tracks, from conversations we've had from numerous people ... are having problems right now and that they should have some relief. And so what this does is give them some relief in the assessment." If Williams really wants to provide relief for the racetracks, both big and small, he should drop his opposition to letting Kentucky's tracks have the casinos they need to remain competitive with other states' "racinos."

2. House Democrats and Senate Republicans continue wrangling over the differences in regard to the executive branch budget. They even have a few differences in regard to spending by the judicial branch of state government. But they join arms and sing Kumbaya about the legislative budget, which passed the Senate 37-0 Monday. Of course, there is god reason for the D's and R's to have a love fest in regard to this two-year spending plan. Unlike the cuts education, social services and a variety of other state programs will suffer under whatever budget emerges from the ongoing conference committee, the legislative budget fully funds General Assembly operations and throws in an extra $10 million for lawmakers to play with. Shameless!

3. Less than four months into his term, Gov. Steve Beshear's SurveyUSA approval rating has dropped to 46 percent, a couple of points below his 48 percent disapproval rating. That can happen when a governor bungles his legislative Plan A as badly as Beshear has bungled the casino gambling issue.

More 'funny money'?

When the House budget arrived in the Senate, it contained a few assumptions that were somewhat questionable - enough so that Gov. Steve Beshear accused the House of balancing its budget with "funny money." The main example Beshear cited was the $85 million in annual savings the House spending plan expected to reap from not filling most of the jobs vacated by a mass exodus of state workers who are expected to retire before the "high-three window" of enhanced retirement benefits closes Jan. 1, 2009. Beshear said the savings from closing the retirement window already had been factored into his budget proposal, so the extra $85 million in the House plan doesn't exist.

Well, the Senate went along with the House on the $85 million annual retirement savings. It also added $55 million a year in extra cash that is based on another questionable assumption. The Senate plan would require the Kentucky Lottery Corp. to meet the statutory goal of turning over 35 percent of its gross revenues to the General Fund. According to the Senate budget, this would produce an extra $54.6 million in fiscal year 2009 and $55.6 million in FY 2010. However, lottery officials say turning over 35 percent of gross profits will force it to reduce the amount paid out to players in prizes, which in turn would reduce the level of play and ultimately reduce rather than increase the amount of revenue the state gets.

This debate - 35 percent vs. more money - has been around since the inception of the lottery two decades ago. And the fact that lawmakers have never enforced the 35 percent goal during that period suggests that lottery officials have been persuasive in arguing that the state gets more revenue when its share of the gross revenues is somewhere near the current 27 percent.

If Beshear and the lottery officials are correct, the two-year spending now under consideration in a conference committee is balanced with at least $280 million ($140 million annually) of "funny money." And that's really not very funny.

No pep in Beshear's pep rally

Today's column:

FRANKFORT — On the 52nd day of a 60-day General Assembly session, Gov. Steve Beshear presided over a modest Capitol Rotunda pep rally.

Fittingly enough, coming the day after Easter, it was a rally aimed at resurrecting his casino gambling initiative, if not from its grave, at least from its death bed.

Supporters came out in moderate numbers — from the Kentucky Education Association, the Jefferson County Teachers Association, the Kentucky Chamber of Commerce and, of course, the thoroughbred racing industry.

All five members of House Democratic leadership stood with the governor, as did several other legislators.

A couple of messages served as common threads linking the day’s speeches.

First, the austere budget the Senate was approving that same day and the setbacks it would deal to Kentucky’s progress demonstrated the short-term need for additional state revenue.

Second, no rational discussion of long-term revenue policy can be conducted until the 900-pound gorilla in our midst — casino gambling — has its day on the ballot.

Both are valid messages. The latter in particular cannot be repeated often enough. Until we decide to either feed or euthanize this gorilla, lawmakers will always use his lurking presence as an excuse to avoid facing up to the state’s fiscal reality.

Feeding the gorilla won’t solve the state’s revenue problems. But it would answer the question of how much revenue he can generate. That revenue, in turn, would serve as a temporary stopgap that gives lawmakers time to figure out what other steps they need to take to give Kentucky a stable, sustainable revenue base.

Euthanizing the gorilla makes the path to a stable, sustainable revenue base considerably longer. But it, at least, removes one of the major distractions that has kept the state from starting that journey.

At Monday’s pep rally, however, neither of these messages was delivered forcefully enough, with the kind of fire and passion that can move people and swing enough votes to get an amendment out of the House.

This was a pep rally without a lot of pep. It had about it an air of hopelessness, of futility, of last-gasp effort being expended on behalf of an issue that already had run out of gasps for this session. In other words: It was too little, way too late.

Six or eight weeks ago, when casino gambling still appeared to have legs, a Rotunda rally would have drawn a bigger, more enthusiastic crowd that still believed.

Six or eight weeks ago, if you followed up that Rotunda rally with a two- or three-day tour of the state, holding similar rallies in cities from Ashland to Paducah, a little thing called momentum might have taken hold.

Gubernatorial appearances, even gubernatorial appearances at rallies, are routine in Frankfort. During legislative sessions, they also must compete with other major news. As noted, Monday’s rally came on the day the Senate passed the budget, which was the bigger story this late in the session with gambling’s prospects waning.

But barring some breaking local story of magnitude, gubernatorial appearances at enthusiastic rallies can dominate the day’s news in cities where governors aren’t often seen. That’s reason enough for a governor to take his message directly to the people when lawmakers seem reluctant to listen.

It is impossible to say whether employing such a strategy earlier in the session would have allowed Beshear to get an amendment out of the Democratic-controlled House, much less past the opposition of Senate Republicans.

But since the strategy he did employ led to Monday’s apparent exercise in futility, it certainly couldn’t have hurt to take his show on the road six or eight weeks ago.

Williams, Moberly talking smack again

Sunday's column:

FRANKFORT — This and that as the 2008 General Assembly session staggers toward a conclusion or a collapse in the gutter (I’m not sure which):

Interesting Good Friday, what with Senate President David Williams and House Appropriations and Revenue Committee Chairman Harry Moberly verbally crucifying each other.

Williams claims that it’s unethical for Moberly, or any other legislator, to help develop or vote for legislation that names his employer — an interpretation of the rules that pretty much would bar Moberly, the House’s budget expert, from having anything to do with the budget since he is employed by Eastern Kentucky University and the budget always includes appropriations for EKU.  Williams first made the claims on Thursday and expanded on them Friday.

Moberly responded on Friday that Williams was simply trying one of his biennial stunts aimed at disrupting the budget negotiations that leaders of both houses conduct in a closed conference committee. Those talks are scheduled to begin this week.

In the process of responding to Williams’ accusations, Moberly referred to the Senate president as “the great disrupter,” an “egomaniacal dictator” who “will brook no dissent,” and a “little petulant kid.”

Williams and Moberly have a history. Two years ago, one of their more graphic verbal exchanges jokingly became known as “Hallway Sex." Now that they’re at it again, an easily embarrassed fly on the wall in next week’s budget talks might want to wear earplugs.

So, who’s right? Both, to a degree.

Moberly does have a bit of a conflict in regard to EKU, particularly given the power he wields in budget decisions. But his conflict is no more than marginally greater than that of many other lawmakers (including lawyers such as Williams) who draft and vote on legislation that affects their professions.

You get those kinds of conflicts when you have “citizen legislators” as opposed to full-time ones. And the general rule of thumb is that such conflicts are tolerable as long as lawmakers don’t use their positions to benefit themselves personally to the exclusion of others in their same professions.

And yes, Williams does make a habit of using a particular issue to create conflict in the budget negotiations. It appears this year’s issue is Harry Moberly.

                                         * * *

Some time ago, I started kicking around substitute lyrics for a verse of that great Simon and Garfunkel classic Mrs. Robinson, lyrics that began with: “Where have you gone, Dan Mongiardo?”

My intent was to come up with a lighthearted way of noting that the lieutenant governor hasn’t been highly visible lately. Problem was I hadn’t quite settled on what would replace “nation” in the original line: “A nation turns its lonely eyes to you (woo woo woo).”

“A party” would work. So, would “Our racing,” considering the administraton’s ongoing struggle on the casino gambling issue.

Anyway, the full verse had not come together in my head when the whole concept fell apart last week as Mongiardo’s office announced a couple of speaking engagements for the lieutenant governor.

Guess I’ll have to be faster in coming up with these spoofs in the future.

                                         * * *

Every year, the usual suspects make the usual observation: “This is the strangest/weirdest/screwiest/goofiest/looniest/least productive/most leaderless/ most out of control/ worst train wreck (choose one or more) session in memory.”

Of course, the usual suspects all come back the following year and repeat themselves, because each new General Assembly session seems to outdo the last in justifying all of those superlative negatives.

For now, though, I have my doubts that next year can top this one.

                                        * * *

Even with the revenue from new taxes, debt restructuring and the real or “funny money” savings from a mass exodus of state workers taking advantage of the soon to be closed “high-three window” of enhanced retirement benefits, the House budget did not restore all of the cuts to the executive and judicial budgets originally proposed by Gov. Steve Beshear. However, the House did restore all of the cuts Beshear proposed for the legislative budget and added in a little extra.

It’s nice to see the House has the state’s priorities in order.

A remarkably unproductive session

Thursday is the 50th day of a 60-day General Assembly session, and just four pieces of rather unremarkable legislation have been signed into law by Gov. Steve Beshear.

One bill extends the time members of the military who are returning from overseas have for renewing their driver's licenses. Another exempts veterans with 100 percent service-related disabilities from some tax paperwork. A third deals with self-contained storage units. And the fourth is a joint resolution recognizing Feb. 12, 2008 as the official commencement of the the Abraham Lincoln Bicentennial.

Less than 20 other pieces of legislation, also rather unremarkable, have made it through both houses and are on the way to the governor's desk.

With so little accomplished so far, the last 10 days of this session are going to be pure hell as lawmakers try justify the cost (at about $55,000 a day) of sending them to Frankfort for the last three and one-half months.

House budget assumption defies logic

Today's column:

FRANKFORT — Gov. Steve Beshear says the House balanced its budget with “funny money,” in part because it projects $85 million in annual savings from closing what folks in state government refer to as the “high-three window” that enhances retirement benefits. The governor says that savings was already accounted for in his budget proposal.

One of Beshear’s fellow Democrats, House Appropriations and Revenue Committee Chairman Harry Moberly, says the governor is wrong and is whining because the austere House budget will force him to make some tough decisions and act like, well, a governor.

Budgetary issues can be so complex that this math-challenged old fogy may have particular difficulty identifying the smoke, the mirrors and the reality. But if you put a gun to my head and forced me to choose sides in this particular part of the Democrats’ family feud, my inclination would be to go with Beshear, simply because I would be shocked if an apolitical pro such as Budget Director Mary Lassiter failed to take every possible factor into consideration in crafting Beshear’s spending plan. And that includes allowing for any savings from closing the high-three window.

But even if she didn’t, the projected $85 million savings strikes me as suspect because it is based on an illogical assumption.

The House budget bases the $85 million figure on the assumption that allowing the high-three window to close on Jan. 1, 2009, will prompt every last one of the 5,463 state workers eligible for a “27 and out” retirement this year to actually retire. The budget mandates that 3,418 of the positions vacated by this mass exodus will not be refilled.

In good economic times, most of the workers might leap at a chance to leave before the window closes (although I doubt all of them would). After all, why not get out when your pension can be based on the average of your highest three salary years (rather than the highest five after the window closes) and your years of service are multiplied by a factor of 2.2 (rather than about 2 after the window closes)?

But these are not good economic times. These are times when the experts are using phrases such as “not since the Great Depression.”

And because of the “27 and out” rule, many of the potential retirees will be about 50 years old, a time of life when their children may still be in high school or in college.

So, it’s unrealistic to expect most of these folks to simply retire and live on a pension equal to 60 to 65 percent of their current salaries. They will need jobs. And right now, jobs are almost as hard to find as hen’s teeth.

In the past, a lot of these workers might have gone ahead and retired, even in bad economic times, with the expectation of returning to work for the state as “double dippers.” But the pension reform measure that the legislature is expected to pass will make double dipping more difficult in the future. And the budgetary mandate that 3,418 of the vacancies created by closing the high-three window go unfilled will make double dipping downright impossible for the near future.

With the private sector economy in the tank and with double dipping in the public sector now an unrealistic expectation, it is illogical to assume that all 5,463 eligible state employees will retire this year. Indeed, even assuming that 3,418 vacancies will be created by retirements may be a stretch because state workers (particularly state workers who are not yet empty nesters) who make that leap without having another job securely in hand will be brave souls indeed.

Sure, sticking around after the window closes means their pensions will be subject to their high five and a multiplier of 2. But it also means they still have a job and they can expect annual pay raises that will improve their pension benefits when they finally can afford to retire.

Pension reform appears to be sure thing

Pardon the delay in getting Sunday's column posted. My bad.

FRANKFORT — Predicting outcomes for bills still in play during a General Assembly session ranks right up there with Russian roulette on the risk scale. So why am I confident I can pick up a figurative revolver and have the hammer drop on an empty chamber?

Because Senate President David Williams said last week, “We will pass the House version” if the House objects to changes the Senate made in a pension reform bill. That means a version of House Bill 600 is a mortal lock for passage.

While Williams may have to live up to his cooperative word on one or two of the changes the Senate made, he probably won’t have to live up to it 100 percent. The Senate version contains some improvements that ought to be retained, as well as some differences from the House version that invite “join us in the middle” compromises.

For instance, the House version said future state hires must meet a “rule of 85” — 30 years of service and a minimum age of 55 — to be eligible for full retirement benefits. The Senate made it a rule of 87. Anyone for a rule of 86?

As to the good stuff in the Senate version, start with its plan to gradually increase state contributions to the Kentucky Employees Retirement System until it reaches 85 percent of the actuarially recommended level of funding in 2020.

Meeting that goal will require far more fiscal discipline than lawmakers have exercised in the last decade. Their failure to fund the state’s pension systems adequately is one of the factors that have caused the plans to amass a $26 billion unfunded liability.

But the inclusion of a plan showing how the state gets there (adequate funding) from here (miserably inadequate funding) is a good first step toward a more disciplined future.

In addition, the Senate proposes to contribute $82 million more to KERS in the next biennium than was recommended in the executive budget. Finding that money could be problematic, considering the state’s financial condition. But at least the thought is there. And the simple truth is, the sooner more money gets pumped into the system the better.

Perhaps the best part of the Senate’s plan is that it would put future legislators and judges in KERS where they would get the same benefits as other state workers. Now, lawmakers and judges have their own pension programs and receive considerably richer benefits than the rank and file.

While the Senate has come a long way from what it proposed last year — a plan unpalatable to the House and the stakeholders in the pension systems — it again is pushing a hybrid mix of defined benefits and defined contributions.

This is a much more reasonable hybrid than last year’s. It would put 80 percent of a future hire’s employee contribution into a defined-benefits program with 20 percent going into a defined contribution plan. Last year’s proposal called for a 50-50 split.

Employee participation in the defined contributions plan would be mandatory under this year’s proposal, Last year, it was voluntary, which left open the possibility that many public employees might opt out and arrive at retirement age with greatly reduced income from the defined-benefits plan and none at all from the defined-contributions one.

So, this is a better hybrid, one that might provide future hires reasonable retirement income. But it’s still a hybrid. And that may not fly with House Democrats, who are inclined to protect the interests of public employees accustomed to defined benefits only.

A second area where Williams may have to live up to his word is in regard to classified school employees, who now are covered by the County Employees Retirement System. The Senate proposes to separate classifieds from county and city workers July 1. The House wants to study the classifieds issue.

A year of study of the overall pension issue produced a better result than the changes the Senate proposed last year. A year of study might well produce a better result than the hasty split-up of CERS the Senate is proposing now.

Grayson's bad idea on gubernatorial slates

Today's column:

FRANKFORT — Secretary of State Trey Grayson says Kentucky should stop forcing gubernatorial candidates to select a running mate before starting serious campaigning and fund-raising.

Grayson’s right, up a point. For me, that point is the filing deadline.

Gubernatorial candidates should be able to fly solo for as long as they want, traveling the state at will, shaking every Kentuckian’s hand, raising a squatzillion dollars — up to that late January date.

Choosing a running mate is the first major decision a gubernatorial candidate makes. It’s the first revealing test of a candidate’s wisdom and judgment. And knowing how candidates handled that test is helpful for primary voters who want to have the best candidate possible represent their party in the fall.

Thus, the filing deadline seems a logical deadline for the formation of gubernatorial slates as well.

But the legislation backed by Grayson and approved by the House Elections, Constitutional Amendments and Intergovernmental Affairs Committee on Tuesday would allow gubernatorial nominees to pick their running mates after winning the primary, perhaps even choosing one of the primary losers for the fall ticket.

It’s a bad bill for a couple of reasons, starting with one of the arguments proponents make on behalf of the measure: that this “federal model” has worked well over the years.

Really? Let us count the ways this argument fails on so many levels.

Start with the current occupant of the No. 2 federal office, Vice President Dick Cheney. In 2000, he was sent out to find a running mate for nominee George Bush, came back only with himself and has spent the last eight years delivering the same message to the world that he delivered a few years back to Democratic Sen. Patrick Leahy on the Senate floor.

And how quickly the folks who think the federal model works well have forgotten Dan “Potatoe” Quayle and Spiro Agnew, who resigned in disgrace.

Lest anyone think I’m singling out R’s, perhaps the worst gaffe in choosing a running mate in the last half-century came in 1972, when George McGovern picked Thomas Eagleton only to drop him from the ticket after it was disclosed that Eagleton previously had received shock treatments.

In reality, this nation has a long history of vice presidents who left something to be desired, no matter how they were chosen. It’s a history that dates back to Aaron Burr who, while serving as Thomas Jefferson’s veep, killed Alexander Hamilton in a duel.

So, let’s not point to the federal model of selecting running mates as justification for changing the way we do things in Kentucky.

A second reason Grayson’s proposal is a bad idea is that it would return Kentucky to the day when gubernatorial primary ballots were cluttered with fringe candidates.

Anyone who wants a history lesson in that regard can look back to the 1983 primary, when there were six Republicans and six Democrats on the ballot.

Five of the Republicans and three of the Democrats had absolutely no shot at prevailing and finished with less than 10,000 votes each. If a slate had been required to get on the ballot then, perhaps some of those people would not have run.

Obviously, anyone who meets the constitutional qualifications has a right to run for governor if he wants to do so. And some fringe candidates are colorful characters who liven up what can be, well, dull and boring races. But really, is it too much to ask that such candidates find others who are willing to run with them before their names are added to the ballot?

Changing the rules on slates is fine, up to a point — that point being the filing deadline.