KyKurmudgeon

Another Stevie Wandering moment

Sunday's column:

FRANKFORT — This and that as Gov. Steve Beshear’s “Please Help Me My Ratings Have Fallen” tour gets underway:

OK, it’s officially the “Beshear About Kentucky” tour. But by whatever name, it will be coming soon to a town near you.

Counting Thursday night’s kickoff in Pikeville, Beshear will make 13 stops over the next six weeks  to hear what Kentuckians have to say about how the state can do more with less.

My first suggestion would be to stop taking three planes full of aides on this tour.

After limping through his first legislative session with little success, Beshear rebounded a bit by staring down the Council on Postsecondary Education on the selection of a new president, by getting lawmakers to come together on pension reform and by using the power of the pen on executive orders to reorganize the executive branch and set some new policies for it to follow.

(In that regard, the quick response of his newly reconstituted Kentucky Horse Racing Authority in addressing controversies in the racing industry has been particularly noteworthy and encouraging.)

Then, toward the end of a week in which energy conservation was a major topic around the Capitol, including his own press conference encouraging state employees to carpool and work flex time where possible, the governor blows a wad of tax dollars and a few tanks of fuel to make Kentucky’s carbon footprint even larger by flying staffers to Pikeville and back.

Surely, someone in the administration heard the dumb meter go off before this tone-deaf flight of fancy occurred.

It’s bad enough that this tour is all too reminiscent of the “Tell Me How to Spend a Surplus That Doesn’t Exist” tour of the state former Gov. Ernie Fletcher took in an unsuccessful attempt to win re-election. By kicking it off with a three-plane flyover of the state, Beshear just added to the list of what I have come to think of as his Stevie Wandering missteps – as in, where the heck was his mind wandering when he decided that was a bright idea?

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Even before the aerial circus, Beshear’s recent positive accomplishments were being undermined by his administration’s lack of adequate vetting of James F. Sullivan, who was recently appointed to the Crime Victim Compensation Board and the Board of Claims.

Sullivan was convicted of a misdemeanor in 1990 for attempted jury tampering in former state Rep. Jerry Lundergan’s 1989 trial. That’s a rather unusual qualification for a member of these panels to have.

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State Rep. Kathy Stein’s decision to run for the Senate seat being vacated by Sen. Ernesto Scorsone will leave the House in need of a new Judiciary Committee chairman come January. No doubt there will be more than one applicant pleading their case with the Democratic leadership.

But Judiciary is the traditional cemetery for bad bills and, therefore, demands a certain skill set of its chairman. To keep such legislation “resting peacefully,” as the late Rep. Gross Clay Lindsay used to say when he chaired the committee, it is best to have a chairman with a relatively safe seat and a strong spinal column.

I don’t know if he wants the job, but Rep. Darryl Owens of Louisville fits those characteristics.

Scorsone, Stein, Lunsford, Beshear, 'That 70s Show'

1. State Sen. Ernesto Scorsone's decision to exchange a seat in the Senate for the robes of a Fayette Circuit Court judge is a good move on his part. But giving up her position as House Judiciary Committee chair to replace Scorsone as a member of the minority in a state Senate run by President David Williams doesn't strike me as the wisest move state Rep. Kathy Stein could make. But hey, the verbal exchanges between Stein and Williams on the Senate floor should be entertaining.

2. If the ratio thus far of fund-raising ($1 million) to digging in his own bottomless pockets ($3.5 million) continues for Democratic U.S. Senate candidate Bruce Lunsford's campaign, the multimillionaire businessman would have to write personal checks in excess of $10 million if he hopes to match the $15 million Senate Minority Leader Mitch McConnell has for his re-election campaign. Lunsford has the wherewithal to do just that, and he's proved in two unsuccessful gubernatorial campaigns that he isn't reluctant to spend freely in pursuit of his goal. But what's worrisome about his low fund-raising numbers is that they could create the perception that this is yet another quixotic campaign. If the national Democratic organizations that would dearly love to see McConnell on the receiving end of a Tom Daschle-style retirement don't signal their belief in Lunsford with money, it could dishearten rank-and-file D's in Kentucky.

3. There's nothing wrong with Kentucky offering "In God We Trust" license plates to motorists who want them. And it's far better that the state offer the plates on its own rather than have some private organization benefit from the sale of them. Still, the announcement by Gov. Steve Beshear that he will push for legislative approval of the plates in the next General Assembly has the feel of a governor looking to improve low poll numbers any way he can.

4. Ah, the dream of coal to liquid. Reruns of That 70s Show in Pike County.

Pot calling kettle alert

We only thought we would get a break from legislative posturing and pomposity when General Assembly members went home after the recent special session. But we should have known better, since this is an election year for lawmakers. In an election year, the silliness never ends. Well, at least not until November.

Proof of that came this week as a couple of Republican state senators and some House Democrats, including Speaker Jody Richards, tried to out-green each other as gas prices reached new heights in Central Kentucky.

It all began with Sens. Gary Tapp and Dan Seum scheduling a Wednesday press conference at Integrity Manufacturing in Bullitt County to announce that they were pre-filing a bill that would allow three-wheel cars to travel Kentucky highways. Integrity is a distributor for the Zap all-electric car. But after House Democrats hastily scheduled their own press conference at Integrity Manufacturing for Tuesday, Tapp and Seum went ahead and pre-filed the bill Monday.

Such jockeying to be first in line for green credit is silly enough in itself. But the needle on the silliness meter pegged when Tapp accused the Democrats of "playing pure politics." Gee, you think? So, what does Tapp expect - that he and Seum should be the only politicians who get to play "pure politics" with the issue of three-wheel cars?

Mass exodus of state workers? Not yet

Sunday's column:

When lawmakers adopted the two-year budget that went into effect July 1, they made certain assumptions about proposed “savings” to make the spending plan balance. One of the big assumptions involved the 5,463 state workers who would be eligible for a “27 and out” retirement this calendar year.

Since the “high-three window” that has enhanced pension benefits for several years will close Jan. 1, 2009, lawmakers assumed that most, if not all, of those 5,463 workers would walk into their boss’ office at some point this year and burst into a chorus of Take This Job and Shove It.

The basis for this assumption was the belief that these workers wouldn’t miss the opportunity to have their benefits figured on the average of their high three salary years (rather than the normal high five) and have their years of service multiplied by 2.2 (rather than the normal factor of slightly less than 2) to determine the percentage of that average salary they would receive as a pension.

Indeed, the House thought this assumption was such a no-brainer the version of the budget it passed ordered Gov. Steve Beshear to leave unfilled 3,418 of the vacancies created by this mass exodus and projected the resulting savings to be $85 million.

While the final version of the budget did not designate the number of these retirement vacancies that must go unfilled or put a price tag to the savings, the basic assumption remained: tens of millions of dollars would be saved because virtually every eligible employee would jump through that high-three window before it slammed shut.

But the anticipated mass exodus has been slow in developing, so slow one must begin to wonder if the assumption of huge savings from unfilled retirement vacancies might have been a legislative “Oops.”

Half the year has passed. And according to figures provided by the Personnel Cabinet, just 800 executive branch workers retired between Jan. 1 and June 30.

That’s not indicative of a retirement rate that can achieve the assumption of several thousand vacancies. Nor is it a significant increase over last year, when 652 employees retired during the same period. (In all of 2007, 1,413 workers retired.)

Sure, it can be argued that the relatively low (in terms of the assumption) number of retirements in the first six months of the year is no big deal, that there remains plenty of time for state workers to flee in the numbers lawmakers anticipated. And I’ll grant a little leeway on that – but not much, because this is not a normal year for folks nearing retirement from state government.

In a normal year, Aug. 1 is the important date for many retiring workers because even one month earning the raise that kicks in every July 1 can bump up your high-three salary average. And Aug. 1 may still be a significant date this year.

But the pay raise that went into effect this July 1 was just 1 percent. By contrast, people who retired before July 1 got a 2.8 percent cost-of-living adjustment in their pension benefits that day. So, there are financial considerations that could have caused some workers to decide the COLA was of more value to them than the raise.

Regardless of which month sees the most retirements this year, the fact remains that way more than 800 workers should have left the executive branch in the first six month of the year if total number of retirements is going to produce anything near the assumed savings in the budget.

However, it would be understandable if state workers confound lawmakers’ assumptions by holding onto their jobs. With the economy flushed to the bottom of the septic tank and few opportunities for second careers to be found in the private sector and with double-dipping made nearly impossible by the budget’s demand for savings through personnel attrition, public employees (particularly those with children still in school) may find they can’t afford to retire now.

And that could pose a dilemma for the Beshear administration down the road. If the retirement rate doesn’t increase rather dramatically the last half of the year and those assumed savings don’t materialize, layoffs remain a possibility.

For now, though, it’s a matter of “waiting and seeing,” according to Budget Director Mary Lassiter, who thinks the August and September retirement numbers will provide a clearer picture. Lassiter says, “It’s very difficult to tell” if layoffs will be necessary. “How many retire is really going to be what drives that.”

Quickies on McConnell, Beshear

1. Senate Minority Leader Mitch McConnell's remarks to Commerce Lexington Tuesday made it sound like he is looking forward with relish to the fall campaign against his multimillionaire challenger Bruce Lunsford, a race in which McConnell acknowledges he will be a target for national Democratic organizations. McConnell indicated he would give as good as he gets in the campaign. So, with his famous fund-raising ability and with the Supreme Court decision throwing out the "millionaire's amendment" removing any restraints on Lunsford's ability to reach into his bottomless, political junkies in Kentucky can expect to enjoy a wild ride this fall. But you have to sympathize with the non-junkies for the ordeal they're about to endure.

2. The tax dollars spent on Gov. Steve Beshear's two-day victory lap around Kentucky, hyping passage of the pension reform bill, could have been put to better use. That was all too reminiscent of some of his predecessor's bad habits.

Pension reform has just begun

Sunday's column:

FRANKFORT — They came. They passed a pension bill in the minimum number of days. They left.

But not without a couple of sideshows.

First, Senate President David Williams used a Transportation Committee meeting to cross-examine administration officials about the road plan they implemented after Gov. Steve Beshear vetoed a highway projects bill passed by the General Assembly. At times, it seemed as if he were conducting a deposition for the suit he filed challenging Beshear’s veto.

By the end of the week, though, the grilling the Transportation Cabinet officials received seemed mild in comparison to what some members of the House Appropriations and Revenue Committee had to say about former Chief Justice Joseph E. Lambert and Jason Nemes, whom Lambert appointed as executive director of the Administrative Office of the Courts.

Neither Lambert nor Nemes were present to hear the lawmakers vent their anger in regard to Lambert’s decision to ignore the recently enacted judicial budget in regard to pay raises for court employees and some subsequent communications between Nemes and circuit clerks.

That unfortunate task fell to new Chief Justice John D. Minton Jr. on the day before he was sworn in. He handled it with aplomb.

Aside from these two dust-ups, this was a session in which most everyone joined hands and sang Kumbaya about reforming the various pension programs for public employees. (“Most everyone” is a disclaimer made necessary by state Sen. Tom Buford, R-Nicholasville, casting the lone vote against the legislation.)

While the changes lawmakers made in pension rules fall well short of doing all that is necessary to address what is now a collective $27 billion unfunded liability in the various retirement systems, they are still significant in scope.

After Sept. 1, future public employees (excluding teachers) will have to work longer to qualify for full benefits and will have to contribute more of their earnings to the pension plans during their careers. And the annual cost-of-living adjustment in pension benefits will be capped at 1.5 percent for everyone (including current workers and retirees) effective July 1, 2009.

These and other changes will help, but much remains to be done.

For instance, about half of that unfunded liability stems from the cost of health care. Addressing that issue will be far tougher from a political standpoint than the changes Beshear signed into law Friday, because it most likely will require current workers and retirees to pick up more of the costs through higher premiums and co-pays.

Improving the systems’ return on investment is another big concern. And the question of which system classified school employees should be in remains unanswered.

A working group created by Beshear will studying these and other pension-related issues in the coming months.

But the 900-pound gorilla in the room, the one that even makes solving the health insurance conundrum look like a stroll on the beach, is whether lawmakers in the future will live up to the commitment contained in this bill to achieve full funding of the pension plan for state workers by 2025.

Fulfilling that commitment will take serious money, more than $1 billion a year down the road a ways. Money the state doesn’t have now. Money the state won’t have then, absent a substantial increase in revenue or a devastating cut in services.

So, instead of joining hands and singing Kumbaya last week, it might have been more appropriate if lawmakers had raised their voices in a chorus of We’ve Only Just Begun. Because there is still a long way to go to fix the state’s pension crisis.

Gross Clay Lindsay (1930-2008)

Gross Clay Lindsay, the longtime chairman of the House Judiciary Committee, died early Wednesday. During his tenure, many a bad bill was consigned to his committee to meet their death. "The gentleman from Henderson" often referred to those pieces of legislation as "resting peacefully." He was a true Kentucky curmudgeon who achieved a stature as a respected lawmaker that few have attained.

Special session quickies, etc.

1. "A quick and successful special session can signal the beginning of a new era in Frankfort, one where cooperation on critical public policy is the norm and where politics and partisanship are reserved for campaigns," Gov. Steve Beshear said in his address to a joint session of the General Assembly Monday night.

Uh, NOT! If everyone crosses their fingers and Kentucky gets real lucky this week, lawmakers will pass some significant pension reforms. If that doesn't get done, some of them won't be back next year. And they know it. But don't expect the Kumbaya feeling to last longer than a chorus or two. Next time legislators get together, the R's and D's will go right back to clawing and scratching at each other the way they always do.

2. Kentucky is not the only state where lawmakers are addressing retirement issues in special session this week. West Virginia lawmakers will convene later today. According to the Charleston Gazette, one of the items on their agenda is the appropriation of $25 million to cover the costs of transferring nearly 15,000 teachers from a defined contributions pension plan to a defined benefits plan. Hmm. Guess Senate President David Williams' favorite approach to pension planning hasn't worked out so well for our neighbors to the east.

3. Speaking of Williams, if his lawsuit challenging Beshear's veto of a highway projects bill is unsuccessful, the Senate president's office may wind up on the hook for the governor's court costs. The response filed by Beshear's attorneys Monday asks the court to award such costs. Now, wouldn't that add insult to injury if Williams loses?

Leave Slots Bill retired; bet on Full Casino

Sunday's column:

FRANKFORT – State Rep. Greg Stumbo wants to bring Slots Bill out of the retirement pasture and enter it in the 2009 Legislative Derby.

Bad idea on multiple levels.

Stumbo, the former attorney general and former majority floor leader who has returned to the House, proposes to send Slots Bill off as a statute rather than a constitutional amendment.

Stumbo long has maintained that no constitutional amendment is necessary to expand gambling in Kentucky. An attorney general’s opinion issued during his term in that office took the same position.

I agree. Technically, lawmakers probably could approve the slots at racetracks Stumbo is proposing or even free-standing casinos by statute and have it withstand a constitutional challenge.

Politically, though, it would be a disaster for lawmakers to do so.

A recent Herald-Leader/WKYT Kentucky Poll found that 81 percent of respondents want to vote on expanded gambling. That means a vote for Slots Bill would be a harder one for lawmakers to cast than, say, a vote for Gov. Steve Beshear’s unsuccessful 2008 Legislative Derby entry, the constitutional amendment Full Casino.

Lawmakers could justify a vote for Full Casino by saying they were just giving Kentuckians what they want, the opportunity to vote up or down on the issue.

But lawmakers who vote for Stumbo’s Slots Bill would have no such cover. Not only would they be denying eight out of 10 Kentuckians what they want, they would have a pro-expanded gambling vote on their own record in a state where support for that issue is at best a 50-50 proposition.

In addition, Stumbo’s Slots Bill would do nothing for the economies in areas of the state that don’t have racetracks, some of which could get free-standing casinos from a Full Casino victory. That could cost Slots Bill some votes from lawmakers representing those areas.

Although still a long shot, particularly as long as the situation continues where the majority of one legislative chamber is disinclined to give more money to a governor of the other party, Full Casino is a better bet politically than Slots Bill.

Besides, even if Slots Bill could win its race, it would address no more than half of the problems those riverboat casinos along our border are causing for Kentucky.

Sure, slots at our racetracks would cut into the traffic, the economic benefits and the revenue (which some estimates put as high as $500 million annually) that now flow across the Ohio River to the gambling boats.

But they wouldn’t come close to cutting off the flow completely because of the number of gamblers who like to combine a visit to the tables with some other activity, such as a round of golf or a show. To keep those folks at home, Kentucky needs its own destination casinos.

Destination resorts also would do a better job than racetrack slots of enticing visitors from other states (particularly to the south) to spend some of their discretionary income here.

Kentucky needs to expand its gambling options. Keeping our signature racing industry competitive with states where purses and breeding incentives are supplemented by revenue from casinos and racinos is one of the big reasons such expansion is justified. Slots Bill could do that. But staying competitive at our tracks and on our breeding farms isn’t the sole reason we need expanded gambling.

Kentucky needs more revenue, at both state and local levels, to pay for education, health care, social services, public protection and all the over services we expect our government to deliver.

And our governments don’t need just a little more revenue. The current round of  painful cuts in services, layoffs of public employees and tuition hikes at public institutions of higher education clearly show a need for a lot more revenue to provide adequate funding for government programs.

So, when we do get around to expanding Kentucky’s gambling options, we need something better than a Slots Bill that may keep our racing industry competitive but cannot do as much as a Full Casino victory would do in generating additional revenues for state and local governments.

Beshear plans pep talk on pensions

Gov. Steve Beshear tentatively plans to address a joint session of the General Assembly Monday night after lawmakers convene in special session to enact pension reform legislation. Beshear's speech will be about 15 minutes in length, according to Communications Director Dick Brown.

House Democrats are expected to get a briefing on the proposed legislation Thursday.