Simplest blog post of 2008

The proposed cigarette tax increase isn't supposed to "work." It will change some buying habits, resulting in lower revenues. That won't become apparent until after the anticipated revenue increase has already been spent. Then other taxes will have to be increased to make up the difference.

That's why nonsmokers should oppose the cigarette tax increase.

Turning Kentucky into New Jersey

We already know Gov. Steve Beshear covets New Jersey's casinos, but did you know he is following Gov. Jon Corzine in providing bogus pension relief to municipalities?

"Cash-strapped mayors give the plan mixed reviews. Some, such as Woodcliff Lake's Joseph LaPaglia, are ready to take the deal, confident the state will be flexible in a repayment schedule if things don't improve by 2012. But Wayne's Chistropher Vergano, a Republican, is wary. He dubbed it an "election year gimmick.""

""It's not making the payment go away,'' Vergano said. "It's like a 30-year mortgage and turning it into a 35-year mortgage. … The debt is not going away.""

Beshear's scheme is not any more complicated than that.

MSM got scoop, but missed the story

The Louisville Courier Journal and the Owensboro Messenger-Inquirer both knew what Gov. Steve Beshear was going to talk about at his press conference today, but neither seemed to grasp the meaning of his latest move.

Is Don Leach job hunting?

I keep getting "Google" hits on this site from Texas; someone checking on "Donald Leach Fayette" and spending quality time reading up on the former Fayette County Detention Center administrator.

Try it yourself.

Seems to mirror the activity on the site that happened back when the jail's Director Ron Bishop was looking -- unsuccessfully -- for a job in Florida.

Zero-sum gaming ourselves to prosperity

With nearly every state in the Union facing fiscal troubles, wouldn't it be great if all the states called a cease fire on the "economic development" front? We'll never know how many billions of dollars are wasted by companies pitting one state's taxpayers against another in the name of recruiting jobs away from each other.

While states and the feds are talking about weathering the current storm, this should be something that can be worked out fairly easily.

Sen. McConnell?

With accomplishments like these...

Gov. Steve Beshear made a season's greeting youtube video for state employees, taking credit for expanding KCHIP spending with money we don't have and "a successful pension reform special session" that didn't do anything to move us farther away from bankruptcy.

Heckuva job, indeed.

Thanks to the Courier Journal political blog for pointing out the video.

Is that a promise or a threat, Governor?

Gov. Steve Beshear's latest prognostication is on stateline.org this morning:

All the more reason, Governor, to cut government spending now to a realistic level within our means. Too many of our scarce resources are going to protect the politically-connected. Kentucky needs more political leaders who don't cower behind their fancy desks waiting for a tidal wave of tax increases to sweep them to higher ground. Now we have no feasible alternative to putting the interests of the majority of Kentucky taxpayers over those who populate the tight inner circles of political power. Prevailing wage has to go now. Corporate welfare has to go now. And every dime of education spending must be made transparent to the public so we can spend our money more efficiently there.

As Beshear fails to take these positive actions, it becomes clearer and clearer that he is merely positioning for the tax increases he promised to avoid when he was campaigning for office.

And we are still waiting for our $180 million efficiency study.

Like bailouts? You'll love Bailout 2.0

Investor's Business Daily reports General Motors is already trying to build support for its next round of bailout money.

"It is our anticipation that working with the new Congress and administration, we'll be able to further shore up our liquidity needs through 2009," (GM spokesman Greg) Martin said. He described the current loans as "an interim measure."

With Barack Obama working up a trillion dollar bailout for cities and states, it will be interesting to see when mayors and governors decide to label their money "interim" as well. Before long, the only people who will have learned anything from the bailouts will be the taxpayers who fund them.

They aren't the ones who need the lesson, of course. Gov. Steve Beshear is one who hopes you are too busy planning your New Year's Eve designated driver to consider where all this is headed.

Another ghost of Christmas yet to come

Anyone following the meltdown of public employee benefits plans in the states has heard a lot about New York, New Jersey, and California. And I have been trying to blow the whistle on Kentucky's growing crisis for a while now.

As Kentucky gets closer to making really tough decisions to cope with our now $35.7 billion and growing problem, a glimpse at North Carolina may be instructive:

"The health plan that covers teachers and state employees across North Carolina has been bleeding so much money that it is set to run out early next year, and officials say it needs an immediate $300 million cash infusion."

No tax increase will pull Kentucky out of its hole when -- not if -- this happens to us.

The bad-policy multiplier

Kentuckians are sure to hear much more in 2009 about how everything will work better in the state if only taxes and spending go up. Following the path of most of these schemes is far more likely to result instead in more of the same decline in our common fortunes.

Take, for example, Gov. Steve Beshear's plan to hit up charitable organizations for donations to the state's General Fund. Before we know what hit us, we will be spending projected future donations only to need more revenue enhancement when that house of cards comes crashing down.

Same goes for President-elect Barack Obama's "stimulus" plan, which will have to "work" to avoid creating yet another house of cards.

From the Philadelphia Inquirer:

"President-elect Obama's economic recovery package will create jobs. But until those jobs exist, welfare reform as we know it must be changed."

Given the well-established pattern of failure for this kind of two-step policy sales pitch, one might think more of us would respond skeptically to such a game.

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Another thing the cigarette tax won't do

Seemingly forgotten in the discussion of Kentucky's fiscal woes is the state employee public pension disaster, whose price tag is now $33.4 billion.

Maybe we should all start smoking now.

It should be increasingly clear that there are not enough tax revenues to grab in Kentucky to make up for decades of overspending, especially if we are going to keep overspending.

Gov. Beshear doesn't have the support in Frankfort to keep denying the reality that tax hikes aren't going to right-size bloated government in Kentucky.

A Kentucky educrat strikes back

A big reason nothing changes in Kentucky is that too many of the people who get theirs based on the status quo work very hard to cook up rationale for them keeping it and for you to keep your mouth shut.

Take, for example, The Gatton Academy of Math and Science on the campus of Western Kentucky University. Kentucky taxpayers have spent several million dollars -- we don't know how many because of the way the money is tucked into the state budget -- to send sixty boys and sixty girls from across Kentucky each year to gain a superior learning experience not available at their home schools. The students can gain up to sixty hours of college credit by the time they graduate from high school. Taxpayers pick up the cost of tuition, room, and board.

This is a fantastic opportunity for these young people. The program functions as a charter school, publicly funded but able to operate outside the control of the education bureaucracy.

The only problem is that the opportunity is not more widely available. Kentucky law prohibits charter schools. In fact, The Gatton Academy operated for a full year without legislative approval, but with the support of House Speaker Jody Richards. That's something else the rest of us couldn't do.

An upcoming legislative effort to make similar educational opportunities more widely available will earn the wrath of the education bureaucracy. In fact, just pointing out this discrepancy on The Bluegrass Policy Blog caused an anonymous commenter to come unglued:

This is pretty good example of the noise you get from the status quo crowd trying to protect their turf. It would be nice if we could have a spin-free conversation about improving education opportunities for more than just a handful of people.

As America moves to the left

Interesting post from native Canadian think tanker home for the holidays reading about healthcare reform north of the border:

"Here's a question to mull over the holiday season: By giving a tax-break to families instead of employers, could the Canadian government be en route (very tentatively) to more patient-friendly health care than the American government, which appears wedded to the goverment-corporate status quo?"

Read the whole thing here. Canada has done a fair bit of socialism the last few decades. Might be worth considering why they are looking in the opposite direction.

Keeping it simple would help Kentucky

An essay out today could almost have been written for Kentucky (the numbers are different and we don't have ports, but the rest fits well). It has great advice we can apply in Kentucky:

"It might well have been better to implement these budget savings several years ago, when the economy was stronger and policymakers had the luxury of taking their time. But such foresight appears to be contrary to human nature, or at least to the nature of those who wield political power in our state (and beyond)."

The rest of the essay is here. Zero-based budgeting would require the state to justify everything it spends. (Imagine that!)

And if we got the government to focus on a few things, there would be fewer painful and expensive mistakes from which to recover.

Perspective on Toyota's "operating" loss

The sky isn't falling on Toyota and the difference is as simple as operating versus actual losses.

Toyota yesterday predicted its first annual operating loss since 1938. That means the company's primary business operation -- making and selling cars -- cost more than the revenues gained from the same. For one year. In a down economy.

Some are comparing this to the Big Three as a way to take heat off the United Auto Workers union. Bluegrass Roots exults:

"Yes, today Toyota with no union workers and what so many try to say is such a superior product is posting a loss for the first time in 70 years themselves."

This is inaccurate. Toyota didn't post a loss and they are not likely to any time soon. When you combine Toyota's operating loss with the surplus from their investments, fringe benefits, and all the other financial activity outside of their core business, Toyota is still profitable.

Ford, Chrysler, and General Motors can't say the same thing and the main difference is labor costs. That is why no one at Toyota is talking about needing a bailout from anyone and GM and Chrysler are now being bailed out by Canada.

By the way, The Lexington Herald Leader's coverage of this operating loss is only slightly better than the left-wing blogs. And that is only because the Herald Leader left the word "operating" in their story. They still could have easily given the rest of the story, though that may have conflicted with an agenda.

What's going on at The Bluegrass Institute

The Bluegrass Policy Blog will stay active all through the holiday season. Please check it out. Kentucky Votes is temporarily a mess. Stuck in the middle of a major upgrade. I believe it will be a super great site sometime before the General Assembly goes into session. Could be any day now. I'll keep you posted.

Pushing all levels of government in Kentucky to open up and show taxpayers what's going on will be our main theme in 2009.

Stay tuned...

Bad news inside the bad news

Kentucky's state government announced November's unemployment estimate reached 7%. The worst part of the news release was not about where jobs are being lost, however. It's about where jobs are being gained.

You have three guesses and the first two don't count:

"The government sector, which includes public education, public administration agencies and state-owned hospitals, gained 500 positions in November 2008. The sector has added 10,000 jobs since November 2007."

This is why Frankfort politicians get so mealy-mouthed when you ask them why they don't just cut government spending.

The time to shrink the government sector is now.

Why transparency is needed in Kentucky schools

Kentucky Education Commissioner Jon Draud has been a disaster.

His taxpayer-provided luxury car is still in his driveway. His sneaky sick day grab was caught and returned to the taxpayers only to be given back to him by the General Assembly.

And now we find out he is being given a glowing review based on two do-nothing task forces he set up. From the Courier Journal:

"The state board evaluated Draud in August and was supposed to present him with the findings at its October meeting, which was postponed because of his stroke."

"In his evaluation, board members applauded Draud's effort in starting two major task forces: one on improving low-performing schools and another looking at the state's assessment and accountability system."

If Kentucky school systems and the Kentucky Department of Education were required to post every single expenditure of taxpayer money within a week of contracting to spend it or, in the absence of a contract, writing the check, it would be much easier for taxpayers to keep track of what is being done to them.

We can talk about good government all we want to. But until the blinders are taken off, nothing will stop this kind of thing from happening over and over.

Ripped from The Lane Report

Kathy Gornik, president of THIEL Audio in Lexingon, sets the record straight on the silly idea that bureaucrats should be picking winners and losers in our economy and how market incentives, rather than government favors, would increase prosperity:

Read the whole article here.