Kentucky needs a debt ceiling

The biggest news story with the least amount of coverage in Kentucky in 2011 is easily Kentucky's debt problem.

Revenues continue to increase for the state and politicians in both parties continue to claim they need more revenue. But at the heart of the problem is that spending has increased even faster.

And that problem has been hidden by debt and unfunded liabilities. In order to believe that Kentucky's budget finished the last fiscal year in surplus, as the state claims, you have to ignore the money borrowed from the 2012 state Medicaid budget and ignore the unemployment benefits money borrowed from the federal government and ignore the money not paid into the state public employee benefits system and ignore the new billion dollars in bonded debt created in just the last year.

That's a lot of ignoring. And in 2012 we are going to have to get a handle on it.

Why Steve Beshear thinks he can raise taxes

Governor Steve Beshear didn't say anything about raising taxes before this year's election. In fact, he bragged in nuanced fashion about not raising any "broad-based" taxes in his first term.

He got away with that because his general election opponent played the same nuanced game to, in fact, raise taxes. And they together also played a much more harmful trick on Kentuckians by jointly underfunding and raiding public employee pensions by hundreds of millions of dollars and borrowing to spend billions more.

So the two most powerful politicians in Frankfort see no downside to increasing revenues now. They need the money, as they see it.

This is the kind of bipartisan agreement we are going to have to fight against even harder in 2012. And that is why we need a state debt ceiling and/or to amend the Constitution to give us a real balanced budget requirement.

This isn't transparency, Governor Beshear

Ellen Ballard in the Commonwealth of Kentucky Controller's Office said this morning the state's Comprehensive Annual Financial Report will remain hidden from the public at least until next Wednesday.

The FY 2011 report will show clearly that Kentucky made its budget appear balanced for the most recent year with the issuance of hundreds of millions of dollars in long-term debt.

KRS 48.800(3) states this report must be made available within 90 days of the end of the fiscal year. That was September 30, about five weeks before the November election. We shouldn't have to beg to see this report.

Fletcher versus Stumbo one more time?

Former Governor Ernie Fletcher's Chief of Staff Stan Cave weighed in on Paul Patton's expensive and controversial plan to get state funding for the University of Pikeville.

"Admission of University of Pikeville into the public university system is quid pro quo for eastern Kentucky legislators' vote for expanded gambling," Cave said. "The House Speaker doesn't give a tinker's darn about a recurring $12 million cost to taxpayers."

Via Facebook.

Phyllis Sparks should be next

State Rep. Alecia Webb-Edgington has resigned as Kentucky's 4th Congressional District GOP chair so she can run in a likely crowded primary for Congress without an apparent conflict of interest.

Good move.

An even better one would be to replace her with Boone County Republican businesswoman and activist Phyllis Sparks. She has been very active in the Tea Party movement and would be a very solid choice to keep growing the party in the northern Kentucky district.

Can't grow cotton in Kentucky

I'm told anything that can be made of cotton can also be made of industrial hemp. Kentucky can't grow cotton. Growing hemp doesn't require the water and pesticides necessary to grow cotton.

Federal law prevents us from taking advantage of this competitive advantage.

Kentucky's new Agriculture Commissioner James Comer supports growing industrial hemp and resistance in the legislature is weak and based on ignorance of what industrial hemp is.

Anyone who supports economic growth in Kentucky should support overturning federal restrictions on growing industrial hemp.

Any questions?

Frankfort's chance to support Christians

The Commonwealth of Kentucky has been battling for years to keep an organization called Christian Care Medi-Share from saving Kentuckians money on their health care expenses.

This currently makes less sense than ever before and must stop now.

A constitutional amendment is necessary to allow cost-sharing programs to function in the state. As Medi-Share states on its web site, an exemption written into the ObamaCare law will keep their program a viable alternative should ObamaCare survive to 2014 and beyond.

Some Frankfort Republican leadership on this would really come in handy now.

What's $336 million among friends?

Earlier in the week, Kentucky's Consensus Forecasting Group predicted revenues for the fiscal year ending next June 30 will be $9.0 billion. They also predicted a $136.5 million dollar surplus for the same time period.

That's interesting, considering the legislature voted just last spring to spend $9.2 billion.

Frankfort in January is going to be a sight to behold. Merry Christmas!

Governor Beshear's Christmas horror story

Governor Beshear's Finance and Administration Cabinet appears intent on making good on their threat to keep the truth about the state's finances hidden until the last business day before Christmas.

The Comprehensive Annual Financial Report will show an increase of $1 billion in appropriation-supported debt in the fiscal year ending June 30. The report was apparently completed prior to September 30 but has been kept quiet since then.

The media is not going to report on this at all but this is exactly why we need a state debt ceiling.

Please spread the word.

Let's protect the First Amendment

It's funny that the same big-government types who insist paid media is not speech want political speech to be paid for with tax dollars and think that will make everything just fine.

Exhibit A is Congressman John Yarmuth. He has filed a constitutional amendment to "get the money out of politics." We've never heard that before, have we?




Indeed, we have heard this same line constantly since the Watergate scandal and all the regulations, restrictions and penalties have done nothing to improve the political process. Prior to that, the idea that we needed government to control our political speech was universally understood as anathema to our American freedoms dating back to colonial times.

What we need is less regulation of political speech. Kentucky could lead the way on this by repealing all of our state campaign finance laws. With Yarmuth pushing so hard in the wrong direction, 2012 may be the perfect time to put this front and center.

Beshear still hiding bad news

Kentucky's Gov. Steve Beshear appears likely to get away with hiding the state's Comprehensive Annual Financial Report through the election and up to an expected just-before-Christmas release.

The report will show Frankfort accumulated an additional billion dollars in revenue-supported debt in the fiscal year ending June 30, 2011 despite claims of spending austerity and budget surplus.

Unfortunately, the GOP establishment in Frankfort has a big enough megaphone to draw attention to this but most of them voted for it, so they won't.

Those who vote for the status quo can't be surprised when they keep getting the same old thing.

When they get around to posting the report, you should be able to see it here.

The force is strong with this one

Lewis County Judge Executive Thomas Massie will soon become a household name in Kentucky for the massive amounts of waste he has uncovered and eliminated since his 2010 election. It's no surprise that he is drawing a lot of attention as a possible candidate for Congress in the 4th congressional district in the 2012 open election.

Some NKY political hacks are spreading a rumor that Massie has declined to enter the race, but that is not true. Stay tuned here for updates.

Here he is with his wife and two of their four children along with presidential candidate Ron Paul at a 2010 Louisville fundraiser for Senator Rand Paul. Thomas also hosted a fundraiser at his home very early in Sen. Paul's campaign.



Thomas and his wife Rhonda are both Kentucky natives and MIT graduates. His children attend public school in Lewis County.

A policy split in the GOP establishment?

Sen. Damon Thayer has pre-filed a bill to remove the constitutional office of state Treasurer. The Senate has passed this bill before and the GOP nominee in 2007 ran with this as the main plank in her platform.

Here's hoping Sen. Thayer pushes SB 51 past any establishment resistance in the Senate.

Now two bills to end Kentucky legislator pensions

Kentucky legislative bills addressing the David Williams pension scandal keep coming in. The latest is from House Republican Brent Housman. It will be HB 149. Like Senate Democrat Dennis Parrett's bill, Housman's would shut down the Legislators' Retirement Plan to new participants as of August 1, 2012.

There are currently 5 pre-filed bills addressing this problem. Please, keep them coming.

How slowly can we fix KY pension scandal?

For the first time, each caucus in the Kentucky General Assembly has filed a bill to fix the David Williams pension scandal.

In the Senate, Republican Jimmy Higdon pre-filed SB 26 to stop legislators from getting a huge pension boost if they can get appointed to an executive or judicial branch position for as little as three years. Democratic Senator Dennis Parrett previously filed a similar bill, SB 28.

In the House, Republican Rep. Ron Crimm already filed HB 65.

And now, House Democratic Rep. Mike Cherry has re-filed the same bill he filed last year and then ignored in his own committee.

The bills have some similarities and differences, but the one feature that stands out the most is how quickly they each take effect. Interestingly, Sen. Higdon's bill doesn't kick in until the end of 2014. This makes it the slowest one of the bunch. Sen. Parrett's bill actually stops legislators from grabbing the outlandish pension boost on August 1, 2012 and goes so far as to shut down the Legislators Pension Plan to new members on the same date.

Sen. Parrett has the right idea.

Frankfort doesn't want you to know

Kentucky finance cabinet officials continue to sit on a devastating report on the accumulation of state debt nearly three full months after the report was supposed to have been prepared.

An official at the Cabinet said current plans are to release the report on December 23 or 24.

Please ask your representatives to demand the immediate release of the current Comprehensive Annual Financial Report.

Is PNC taking your money to Pennsylvania?

Government officials in Latvia and Sweden are blaming Twitter for a weekend run on two Swedish banks in Latvia after "tweets" claimed Swedish officials were about to close the banks and leave depositors empty handed.

Twitter is not to blame; government bank deposit insurance is.

Think about it. If a rumor spread in Kentucky that Pennsylvania-based PNC Bank would shut its branches here and take all its depositors' money back to Pennsylvania, how would a lot of people react? You know it would get ugly.

The point is that government deposit insurance has made banking consumers all over the world dumber than they should be and subject to freaking out when presented with rumors like this.

The flip side of a false sense of security is a susceptibility to unwarranted panic. In addition to protecting taxpayers from huge amounts of moral hazard, ending government deposit insurance would force bank customers to educate themselves about the health of their bank.

At a time in which the world is growing keenly aware of the devastation caused by banking crises, that would be a good thing.

Can we interrupt inauguration to ask about this?

Kentucky's Finance and Administration Cabinet should have a report out any day now showing clearly that the state went $1 billion deeper into debt in the last fiscal year.

The report is supposed to post to this web site. In fact, according to KRS 48.800(3) it should have been posted by September 30.

Food freedom gets a boost in Kentucky

Kentucky state Sen. John Schickel pre-filed Senate Bill 47 to help clear up any confusion government officials may have about the right of farmers to sell -- and Kentuckians to drink -- unpasteurized milk.

This action was made necessary by an ill-conceived raid last May on a private food club by the Louisville Health Department.

Kentucky's shot at a debt ceiling

Kentucky Knows Best has a report out in favor of a constitutional amendment limiting the debt Frankfort politicians can pile on us.

The bill, sponsored by state Rep. Mike Harmon, would limit revenue supported state debt service to 5% of revenues. We are now almost 30% above this so Rep. Harmon's bill would stop the accumulation of bonded debt for several years.

Glad to see Kentucky leading the way on this. Maybe Congress should take notes.

Should the bill, which will be HB 108 in the 2012 General Assembly, gain sufficient support in Frankfort it will appear on the November ballot as follows:

"Are you in favor of amending the Constitution of Kentucky to modernize, update, and consolidate provisions in the Kentucky Constitution related to debt, and to limit the amount of debt that may be authorized by the General Assembly, subject to future changes, to that limit initiated by either the registered voters of Kentucky or by the General Assembly?"

The correct answer is "yes."

Obama Admin lies in Lexington KY

At a Council of State Governments webinar in Lexington on Tuesday, an Obama Administration official lied about a serious problem with the ObamaCare law.

At about 31:40 on the video, Steve Larsen, director of the Center for Consumer Information and Insurance Oversight in the U.S Department of Health and Human Services was asked about citizens in states with federally-run ObamaCare health insurance exchanges not being able to get federal subsidies for the more expensive ObamaCare insurance in 2014.

The law states very clearly that only people in states with state-run exchanges can get the subsidies.

Mr. Larsen's answer did not reflect that fact.

"The ACA (Affordable Care Act) permits the federal exchange to provide tax credits," Larsen said.

The Obama Administration can't just wave a magic wand and change the wording of federal law to cover up this stupid mistake. To change the law, it must go back to Congress for a swift death in the House.

Obama minion files Kentucky bill

President Barack Obama's Kentucky campaign chairman pre-filed a bill yesterday that serves as another reminder that the champions of big government think you are stupid.

House Bill 103 would create three new slush funds inside Kentucky's budget reserve trust fund, or rainy day fund.

You aren't supposed to know that the only way Kentucky can show a positive balance in the rainy day fund is to hide our growing debt.

Professional politicians in both parties in Frankfort have gotten pretty good at that.

What is negative campaigning?

Attacking Newt Gingrich for being a Big Government Republican is not negative campaigning.


Any questions?

Tell Beshear to return ObamaCare bailout

Kentucky is one of six states to have started allowing state employees to drop state health insurance coverage on their children and pick up federally subsidized CHIP through changes implemented in the 2010 federal health reform law.

The Beshear administration claims to have shifted $2 million in health costs onto the federal government already.

Unwinding ObamaCare will be hard enough when we get the opportunity. With the program's tentacles now having extended into the state government workforce, it will be just that much harder.

The silence from Frankfort's Republicans on state action on ObamaCare is deafening.

Governor Beshear should back off this policy and stop all activity that further tangles Kentuckians into ObamaCare.

Try proving sales tax holiday isn't a gimmick

Nearly every year in Kentucky around Christmas, someone in the state legislature files a "back to school state sales tax holiday" bill.

So here comes the 2012 version. In it, certain school supplies and clothing would be exempt from state sales tax for three days at the end of July each year. It's the perfect feel-good legislative proposal. If it passes, the sponsors win. If it doesn't pass, the sponsors win. And voters who aren't paying much attention feel that their Frankfort lawmakers have thrown them a bone.

I'll take this as more than a political stunt if the sponsors amend the bill to immediately cut from the state budget the total amount of sales tax exemptions tallied during each and every sales tax holiday.

"The essence of ObamaCare"

Presidential candidate Michelle Bachmann has criticized both Mitt Romney and Newt Gingrich for supporting the "essence of ObamaCare."

She's right.

Romney's web site says that he would "help control health care costs" and "ensure that individuals with pre-existing conditions who are continuously covered for a specified period may not be denied coverage." But we don't need government to do either of these things. It's in following this flawed line of thinking about government activism in the marketplace that we wind up with things like ObamaCare.

Gingrich's web site says he wants to reinforce "laws which prohibit insurers from cancelling or charging discriminatory rate increases to those who become sick while insured." But we don't need government to step in and force insurers to stop doing something that their contracts allow them to do.

And that is the most important point.

Most people don't read their insurance contracts because they believe that government regulation is there to protect them. You don't have to talk to too many people to figure out this is not the case. You probably don't sit around all day trying to manipulate government regulations to get the most value from your insurance contracts. But your health insurer does. Those companies have to cut every available corner in the interests of self-preservation. And that's because government regulation would otherwise be used against them to curry favor, build power and buy votes. They were forced to start playing the game, but they have become expert at it. They are banking on the likelihood that you are no expert.

The best thing for government to do in health care transactions is to stop creating this adversarial relationship between insurers and their customers and get out of the way. If that policy were our default position, then helping people with temporary or even permanent financial needs relating to health care would be much cheaper for everyone. We would then have more insurance companies and greater consumer choices and all the societal benefits that come along with market competition.

Michelle Bachmann's web site is light on specifics about health care. With Herman Cain out of the race, she is smart to go after Romney and Gingrich on this issue. She should take the next step and show that she understands what must be done beyond repealing ObamaCare.

Make life easier for Kentucky Wildcats

University of Kentucky athletic dirctor Mitch Barnhart could build and maintain sports facilities for our beloved Wildcats for less money if Frankfort politicians would repeal the state's prevailing wage laws.

It's worth noting this weekend that North Carolina has no prevailing wage laws. Coach Calipari, what say you?

Greg Stumbo on drugs

Kentucky House Speaker Greg Stumbo wants to force medical providers to accept health insurance as part of the effort to "fight drugs." This comes as the federal government is doing its level best to destroy health insurance in America and state officials are already making it worse.

The only way out of our health care crisis is to rebuild markets in health care. Forcing providers who have escaped the system to get back in as part of a half-baked scheme to battle prescription drug abuse is the wrong solution at exactly the wrong time.

Price competition is the only thing that will improve the efficiency of health care in America. We don't need fewer cash-only clinics; we need more of them.

Kentucky can kill ObamaCare

A Kentucky Knows Best report indicates the ObamaCare law will collapse quickly under its own weight if states don't set up Health Insurance Exchanges which facilitate hiding the law's costs.

That's because the law clearly states federal subsidies for Exchange-purchased health insurance policies can only be given if the state chooses to run the exchange. Without the subsidies, ObamaCare insurance will be way too expensive.

The Obama Administration is scrambling to change the law illegally through the IRS or the Department of Health and Human Services because they know Congress won't bail the president out of his mess.

Meanwhile, Kentucky's Governor Steve Beshear is trying to figure out a way to change Kentucky law to set up a state-run Exchange without actually having to get a bill through the legislature.

States like Kentucky can kill ObamaCare by refusing to set up an Exchange. Please tell your legislators not to set up a state health insurance exchange.