Frankfort's foolproof plan to eliminate debt

Kentucky's Office of Financial Management web site has been a rich source of state debt information that I tried for many months to get people to pay attention to with limited success.

It appears that ship has sailed. The only report left on the site with any debt data is apparently the Comprehensive Annual Financial Report, which pretty much requires the patience of Job to find useful information.

Long-time readers may recall last summer I was trying to draw attention to a clear, concise debt report on a web page the Beshear Administration had failed to update for three years as state debt soared. That site now no longer exists. (See for yourself.)

So the brilliant plan to get rid of the state's impossible level of debt is to simply take down the web sites.

Historians will point to this despicable behavior and the complete lack of mainstream media coverage of it some day. For now, you need to know we basically have three years till the state's finances implode due to exactly this kind of deceit and mismanagement.

Kentucky House tea party tidal wave forming?

The Kentucky Right to Life (KYRTL) organization endorsed Democrat Kentucky House Majority Caucus Leader Bob Damron against his Republican opponents for years until 2010. That year, Damron escaped with a narrow win when Peter Kerr got a C- from the NRA.

This year will apparently be much different. The KYRTL has already endorsed Damron's 2012 opponent Matt Lockett. Damron has already shredded his fiscal conservative facade voting for a series of tax increases and horribly irresponsible budget bills. He has angered the most conservative part of his Jessamine County constituency by trying to jettison them away in the House's unconstitutional redistricting scheme.

The Barack Obama effect combined with Damron's self-inflicted difficulties set Lockett up for what would be the highest profile Republican pickup.

Kentucky in way over our heads on ObamaCare

Not only has the Kentucky legislature given the state Insurance Commissioner unchecked powers to regulate your health care, the state has received and written into our budget more ObamaCare funding from the federal government than all states except for one.

An analysis performed by LifeHealthPro found that only New York's federal health insurance exchange grant total of $88 million exceeds Kentucky's $66.6 million take.

What an obscene mess. And Senate Republicans could have stopped this, but did nothing. Disgraceful.

Because of the way HB 265 was written, even if the Supreme Court overturns ObamaCare Kentucky already has what it needs to push us all the way into socialized medicine.

Ron Paul rocks Kentucky Republican RINOs

State House and Senate candidates in Kentucky are getting loaded down with surveys from various organizations asking their positions on a wide variety of issues. There's one in particular that is not to be missed.

Ron Paul-founded Campaign For Liberty sent out a 7-question survey. Six of the questions should be pretty easy for any candidate to handle, dealing with personal liberties and fiscal responsibility. But the seventh question zaps everyone who voted for the state budget late last month.

The question reads as follows: Do you oppose taking federal money to create a state health insurance exchange? Standard operating procedure for Kentucky politicians might dictate that they try answering yes even though they voted for the 2012 budget bill, which accepted more than $50 million and spent it as well as obligating taxpayers to spend much more.

The smart thing for those politicians to do instead will be to just throw the survey in the trash and go hide under their desks. In a low turnout primary election, it will be somewhat better to be nailed by Campaign for Liberty for being too chicken to answer the questions than it will be to get nailed for trying to lie their way out of the mess they got themselves (and us) into.

Go ahead. Make our day.

If you know and support any good conservative candidates running against big-spending incumbents in Kentucky, please share this post as widely as you can.

I guess that's a "no"

An Ohio-based tea party group suggested to Kentucky 4th district congressional candidate Alecia Webb-Edgington today she should return her legislative pay for the days she spent last month raising money in Washington D.C.

Coalition Opposed to Additional Spending and Taxes (COAST) said she should reimburse "the Kentucky taxpayer" for whatever pay she received on her trip. COAST was an early supporter of Rand Paul in his run for the United States Senate.

The funny part about this is Rep. Webb-Edgington responded to this request by attacking primary opponent Boone County Judge Executive Gary Moore.

What would you rather talk about?

A Frankfort reporter asked me yesterday if there was anything going on except for the state's debt problem or the legislature slipping ObamaCare into the state budget or the KRS going bust in three years.

Yes, I told him. The GOP establishment is still distracting itself with trying to kill off the Tea Party.

There is time to stop this from being the big news story on Monday, but I'm not holding my breath waiting for a handful of too-powerful Republican leaders to get with the program before then.

Don Butler takes on GOP tax hiker

Edmonton Kentucky Republican Don Butler tells voters in the state's 9th Senate district he will never follow the crowd in Frankfort in voting to raise taxes. On Thursday, he put that promise in writing.

Butler signed the Taxpayer Protection Pledge sponsored by Americans for Tax Reform (ATR), committing to "oppose and vote against any and all tax increases." So far, only four other state Senate Republicans have signed the ATR pledge. Butler's opponent in the May 22 Republican primary is not one of them.

"Most people don't realize what Frankfort has done to us in the last four years in terms of overspending and debt," Butler said. "The new legislators going up there next year will be under great pressure to raise taxes on Kentuckians and they just have to know that I won't be supporting that."

According to Kentucky's Comprehensive Annual Financial Report, state government in the last year has increased General Fund debt by $1 billion. Earlier this week, a federal whistleblower on the Board of Trustees of the Kentucky Retirement Systems said the state pension system will run out of money within three years, costing $600 million a year. Butler said the state's fiscal problems will only be fixed by cutting spending.

"In the last four years we have had enough overspending and tax increases to last us several lifetimes," Butler said. "We can't afford anymore to elect or keep politicians who buy our votes with our own money and pretend that everything will just work out fine." 

Butler faces incumbent Senator David Givens in the GOP primary.

More bipartisan Frankfort "hanky panky"

When the Securities and Exchange investigation of Kentucky's pension plan pay-to-play scandal finally blows up in a few short years, state Rep. Mike Cherry's comment about the legislative coverup will look particularly silly.


Rather than ban the practice of "placement agent" middlemen wasting millions of public dollars in the moribund Kentucky Retirement Systems, the legislature just made them permanent fixtures in Frankfort's political swamp. 


Cherry, the House State Government Committee Chairman, spoke to the Frankfort State Journal about his bill, HB 300, which didn't ban the wasteful practice. Instead the bill requires them to register with the toothless Executive Branch Ethics Commission.


“Having them register as lobbyists precludes any hanky panky regarding contributions and the like,” Cherry said.


This is a completely absurd thing to say because registering them in this way doesn't even require them to report their placement agent income, much less preclude in any way the vast amounts of contribution hanky panky that now gets to continue with state sanction.


Former KRS Board of Trustees member Chris Tobe says the state pension system will require $600 million annual payments starting in about three years. Enabling this waste and corruption will loom much larger when that happens.


The problem is that our representatives in Frankfort should be taking steps to correct this mess. Covering it up will just make it harder to fix later.

Governing by Google Alert

The federal whistleblower in Kentucky's ongoing pension investment placement agent scandal learned earlier today from an email Google Alert that Governor Steve Beshear prefers covering up the issue rather than dealing with it.

Chris Tobe, the whistleblower, had to read on the internet today that he has been replaced on the Board of Trustees of the Kentucky Retirement Systems.

Several other members of the Board have been subpoenaed recently to testify to the Securities and Exchange Commission in their ongoing investigation of the placement agent scandal.

Tobe says the state pension system will run out of money in about three years, necessitating annual payments of $600 million dollars to be made from other revenue sources.

The legislature failed to draw any attention to this situation by allowing scandal-enabling legislation (HB 300) to fly past them last week. The deafening media silence on this issue would not be happening if a Republican were Governor. This fact makes it all the more troubling that no Frankfort Republican could be bothered to speak out on this at all.

Kentucky goes whole hog for ObamaCare

Whether the U.S. Supreme Court strikes down some or all of the federal health insurance law known as ObamaCare may not make much difference in Kentucky thanks to language slipped into the budget bill by Governor Steve Beshear and approved by majorities of the House and Senate.

The last fifteen pages of the just-passed Kentucky budget bill (HB 265) creates a small business health insurance subsidy program, adds new ObamaCare style regulations and empowers Kentucky bureaucrats to seek and accept federal money and implement new regulations without limit. With all that, who needs ObamaCare?

The worst part of the new language goes far beyond Kentucky's 1994 flirtation with HillaryCare which destroyed our individual health insurance market and fit perfectly with Governor Steve Beshear's desire to implement ObamaCare in Kentucky without legislative approval. The two most horrible aspects of this health care power grab is that it, first, actually got legislative approval and, second, that it could create havoc in both individual and group health insurance markets in Kentucky even if ObamaCare is repealed.

Section 7(2) in the ICARE enabling language reads as follows:

(2)           The provisions of this section shall not give rise to, nor be construed as giving rise to, enforceable legal rights for any party or an enforceable entitlement to benefits other than to the extent that such rights or entitlements exist pursuant to the administrative regulations of the executive director of insurance.

 That means the executive director of Kentucky's Department of Insurance just became your health care czar. If your legislator voted for this mess, you should ask him or her to explain why. Some of us tried to warn you (here and here and here).

Shut up and eat your talking points

The Lexington Herald Leader's news article called it a "compromise budget" but couldn't find anyone to quote who recognized that Kentucky's final budget agreement still spends more than we have.

The Louisville Courier Journal's news article quoted Rep. Stan Lee saying the budget spent too much money, which was good, but also called the budget "lean," which is at best inaccurate.

The Associated Press news article called the budget "lean," "bare-bones," and said it includes "sharp cuts," which it does not and also couldn't find anyone who noticed that spending exceeds revenue way too much for any unbiased observer to use any of these terms.

Meanwhile, we are two days past final agreement on the budget and one day past final passage by both chambers of the legislature and the bill is still not available online.

Some "transparency." And what a disgraceful display of media bias at the conclusion of a three-month long disgraceful display of legislative arrogance and ineptitude. It would have been better to just skip the whole charade and have Governor Steve Beshear, Senate President David Williams and House Speaker Greg Stumbo issue a joint statement urging Kentuckians to shut up and eat their talking points.

Hold your wallet and your Constitution

As the clock runs out on Kentucky's legislative session, a brief encounter among budget negotiators Monday evening sheds light on the need for constant vigilance in protecting citizens from out of control politicians.

At 44:50 of this video, repeated Americans for Tax Reform pledge violator Rep. Bob Damron claimed that an unconstitutional spending provision he wanted in the budget wouldn't be a problem if no one actually fought it in court.

"It only is a problem if somebody challenges it," Damron claimed.

This is not only false, but dangerous and clearly emblematic of the mess our nation is in. The language Damron tried to get in the budget would let legislators create additional spending without going through the legal appropriations process.

In an era of huge public debt, structurally imbalanced budgets and enormous unfunded mandates allowing politicians like Damron to so casually dismiss the Constitution is something we can no longer afford to do.

Webb-Edgington strains at gnat, swallows camel

Kentucky 4th congressional candidate Alecia Webb-Edgington went on CN2 last week claiming that she had to vote against the House version of the state budget because of "fluff" in the bill. Asked to define the fluff, she explained that she couldn't vote for a budget that included a $14,500 appropriation for a curtain divider at a state park.

The amount of waste in both the House and Senate bills goes so far beyond $14k that it is incredible this example was all she could come up with.

I couldn't find the curtain divider in the Senate budget, but the last fifteen pages of both versions of HB 265, the executive branch budget, contain a framework for implementing ObamaCare in Kentucky through the Department of Insurance. That's a whole lot more than fourteen thousand dollars and much less useful than a curtain divider.

Also, both bills spend hundreds of millions of dollars we don't have and both do next to nothing to address the oncoming public employee pension system bankruptcy. Rep. Webb-Edgington should have to explain in greater detail how her incomplete lurch to the right on budget bills qualifies her to run for Congress.

Whether she votes for the final budget bill or not, Webb-Edgington missed a great chance to be a voice for fiscal reason before it is too late.

Kentucky Rep. John Tilley on drugs

CN2's Ryan Alessi asked Rep. John Tilley if this year's legislative session would be a success if the General Assembly passed several bills "cracking down" on drug abuse in Kentucky. Tilley said yes.

"I think so because considering the drug abuse problem, this scourge in Kentucky is the biggest problem we have period," Tilley said.

As someone who doesn't even like to take aspirin, much less anything hallucinogenic, I'm almost tempted to ask   for a hit of whatever Tilley is smoking. If the legislature does manage to pass a budget, it is certain they will do so without addressing the state's growing health care, debt and pension problems.

In fact, they seem poised to make them all worse.

The legislature has no apparent concern that Kentucky Retirement Systems should run out of money in three to five years or that bad health care regulation policy on both the state and federal levels or mismanagement in our public education system combine to cause problems that totally dwarf the public effect of a few people's substance abuse issues.

And again, if you want to start really addressing irresponsible drug use in Kentucky, then drug test welfare recipients.

Banner day for corruption in Frankfort

House and Senate leaders have worked out an agreement to keep surgical costs artificially high in Kentucky and to hinder recovery efforts of at least tens of millions of taxpayer dollars in the KRS placement agent scandal.

And you are very unlikely to read a word of it in the mainstream media.

Both HB 300 and HB 458 sailed through the Senate today. Both bills must go back to the House, but they will get quick approval there. The biggest problem with these bills is House and Senate leaders knew exactly what was in the bills and apparently none of the rank and file members bothered to understand or, perhaps, even read them.

HB 300 makes "placement agent" middlemen permanent fixtures in our already scandal-plagued pension system. The middlemen siphon off millons of dollars at a time from investment funds our elected officials should be protecting. Specifically, we should ban placement agents from our financial transactions, but instead we are writing them into the law as lobbyists who don't even have to report how much they are looting from us.

HB 458 keeps alive the seriously outdated and failed central planning of medical services scheme called "Certificate of Need." Governor Beshear is using the state's Certificate of Need program to implement ObamaCare. Senate President David Williams and House Speaker Greg Stumbo, by passing this bill, just made it easier for him to do that.

By keeping competition out of the health care industry, Williams and Stumbo are directly increasing your healthcare costs. But you don't have to thank them; the Kentucky Hospital Association already has.

How powerful is the industrial hemp issue?

There is no question that cultivation of industrial hemp has pockets of strong support in Kentucky, but the Republican primary for Kentucky's 17th state Senate district could show just how potent it has become.

Rick Hostetler, challenging Republican Senator Damon Thayer launched a new page on his web site chastising Thayer for a 2011 KET broadcast in which Thayer seemed to suggest that allowing farmers to grow hemp might lead to people taking hard drugs. See the page by clicking here.

Industrial hemp entered Kentucky Republican politics in the fall of 2010 when then-gubernatorial candidate Phil Moffett announced his support for hemp cultivation. He came in second in a three-way race in which both his opponents made anti-hemp statements similar to Thayer's.

Agriculture Commissioner Jamie Comer followed Moffett's pro-hemp statements in his successful 2011 campaign. Before long, nearly all of his opponents followed suit, including his Democratic general election opponent who publicly flip-flopped to a pro-hemp position.

By all indications, Senator Thayer has a very significant fundraising advantage over Hostetler. Industrial hemp advocates may or may not want to latch onto this race to gauge support for this free market issue, but it would be great to see it become a part of the discussion in 2012 and this looks like our only chance.  

Kentucky budget negotiators need Jed Clampett

On the old Beverly Hillbillies television program, when Jed Clampett's nephew Jethro would say or do something particularly stupid, an exasperated Jed would say "One of these days I gotta have a long talk with that boy." Too bad Jed isn't around to talk sense into Kentucky House Budget Chairman Rick Rand.

Kentucky's original budget document written by Gov. Beshear included nearly a billion dollars in new debt spelled out in the bill. The House reduced that debt by about a half and the Senate cut the amount of new debt by half again.

As Rep. Rand was explaining that he didn't want to agree to the Senate's changes, Rep. Stan Lee (R-Lexington) rose to ask a question on the bill.

"According to the newspaper, the Senate cut spending and cut the debt in its bill," Rep. Lee said. "If it's in the paper you know you can believe it. Is what the newspaper reported today correct about the Senate cutting spending and cutting the debt?"

Rand didn't take the bait, but he didn't answer the question accurately, either.

"We cut the debt by half when that bill passed the House," Rep. Rand said.

The answer he was looking for was "No."

We need to reduce spending and reduce Kentucky's debt, but overwhelming majorities in the House and Senate still count on most people not understanding the difference between a real cut and a cut in projected or requested growth. Besides that, the Senate did nothing to address the pension mess or the Governor's wish to implement ObamaCare administratively which the budget bill would allow him to do.

Rand Paul, Mitch McConnell need to see this

Kentucky Employees Retirement Systems is currently funded at 28%, less than any state fund in the country, KRS Trustee Chris Tobe said.

"Underfunding each year is like a hurricane devastating the pension," Tobe said. He predicts that within three to five years the pension system will require $600 million a year from the legislature just to make annual payments.

The lack of understanding in the legislature on this issue is made clear by the way House Bill 300 is flying through on its way to becoming law.

The problem is that both parties in both chambers of the legislature and much of the executive branch are caught up in a desire to keep this quiet. And the media blackout is at least somewhat understandable; if this were a Republican-only scandal there would already be a thousand news stories and editorials calling for blood.

As it is, there is zero chance of an Attorney General investigation. We need federal intervention quickly. The Securities and Exchange Commission is already looking into the placement agent problem just as the legislature is covering tracks with House Bill 300.

Tobe said requiring placement agents to register as executive branch lobbyists will actually make the problems worse.

He calls placement agents "looters" and says HB 300 "encourages looting with unlimited and undisclosed looting allowed as long as you sign in as a looter."


Senators Paul and McConnell have the biggest megaphones in the state. They should do us all a favor and use them to put a stop to this. 

Showdown coming on Certificate of Need?

House Bill 458 represents an attempt by the legislature to overturn a Kentucky court ruling in favor of freedom and competition in health care.

The bill sailed through the House in a form that would have shut down the same medical practices who fought successfully in court for their continued existence and to ensure the prohibition of any future such providers of surgical services outside of (much more expensive) hospitals.

The Senate has now amended the bill to grandfather in those existing practices but to prohibit any new providers from lowering consumer prices and improving quality of service through competitive forces.

So now the question becomes: which chamber of the General Assembly believes in the ridiculous certificate of need process more, the House or the Senate?

In other words, if innovation in health care delivery is so dangerous we have to force doctors to do outpatient surgeries in hospitals rather than provide a less expensive alternative then why are exempting anyone from certificate of need? And if those exemptions don't actually put consumers at risk, then why don't we drop this overly burdensome regulation for all Kentuckians?

Keystone Kops ride in Kentucky

For the third year in a row, Kentucky is about to make a law banning synthetic marijuana.

I'll wait right here for a minute while that sinks in. Read the first sentence again if you have to.

Lead sponsor Rep. John Tilley, the House Judiciary chair, seems pretty sure that he finally has a bill that will work. But he is wrong again.

Look up synthetic marijuana on Amazon.com. It is readily available (as is allergy medicine) and inexpensive. The most Tilley's grand scheme will accomplish is to move retailers of synthetic marijuana onto the internet or out of the state. (Hint to lawmakers: that means less sales tax.)

And lest you think anyone will be made safer by this, consider that retailers usually live in or near the communities they serve and can be made to answer for bad or even dangerous products. It's much harder to hold an internet retailer accountable.

So if you want to cost Kentucky jobs and tax revenue and probably even put more people in harm's way, then go ahead. Knock yourself out and support HB 481 and tell your constituents you fought to make them safer.

It's just not true.