Monday, April 11, 2005

KAPT Scandal Worsens: No money in "Trust Fund"

The much beleaguered KAPT program has been losing money and drawing down the value of the little understood "Unclaimed Property Fund" for several years, but that is not news. What is alarming is how bad the situation has become.

One phone call to the Kentucky Finance and Administration Cabinet yielded some very interesting numbers. Here's how the phone call went with spokeswoman Jill Midkiff:

KP: What is the value of the Unclaimed Property held by the state of Kentucky?

JM: As of last Friday the account for abandoned property held $118,695,719.00.

KP: That is significantly less than the $150 million Jonathan Miller insists is in there. How could there be such a discrepancy?

JM: I couldn't speculate.

KP: Does this $118 million represent actual dollars in a bank account or has the money already been spent and this is just a number on a balance sheet?

JM: It's a bookkeeping mechanism. The controller's office calls them "book dollars."

So for accuracy's sake, the fund that Jonathan Miller says backs up the controversial KAPT program has NO VALUE. To place value in it, General Fund dollars must be used. That is what happened on December 1, 2004 when KAPT raided the General Fund of $13.7 million dollars. That is what will have to happen to the tune of $50 million by 2020 according to the actuarial report. This settles it. The controversy is over. The 9000 contract holders must be made whole, but to continue the program and open the state to further losses makes absolutely no sense. The pending lawsuit is the work of Treasurer Jonathan Miller and Attorney General Greg Stumbo. Every citizen of the state should urge the Attorney General to end this lawsuit and let this money loser die.