JUDGE STEVE HORNER’S ROUNDUP FOR WEEK OF APRIL 5, 2008
The General Assembly passed on Apr. 2 and sent to Gov. Steve Beshear a highly controversial budget which cuts all state agency and higher education funding by 3% during the next biennium – down from the 3% cuts that Beshear ordered in December for the current fiscal year expiring on June 30 – and only gives teachers and state employees 1% cost-of-living raises for each of the next two fiscal years. The budget base-funds elementary and secondary education at the current year’s level, but inflation over the next two years will obviously erode the value of that spending to less than what it is now.
The bill was the latest rendition of a state budget crafted by a Senate-House conference committee that met for over a week to reconcile the widely divergent state spending plans passed by the two legislative chambers. The Kentucky Education Association even urged lawmakers to oppose the bill and to start over again on formulating a budget. But in the end, the compromise budget measure was passed first by the Senate 35-3 and three hours later by the House 74-21. The three “no” votes in the Senate were cast by two Democrats and one Republican, and all 21 opposing votes in the House were cast by Democrats.
Passage of the budget bill in the House was greased by a separate bill that earmarked $150 million in coal severance tax and tobacco settlement revenue for some pork (public works) projects in certain districts. The spending ran the gamut of ordinary pork such as little league fields, disabled veterans associations, and any number of purposes that a House or Senate member could go home and say, “This is what I brought home from Frankfort.” Without the separate projects deal – passed 38-0 in the Senate and 83-10 in the House – it is believed that the budget would not have been passed by the House. Former House Majority Leader Greg Stumbo (D-Prestonsburg) brokered the projects deal with Senate Pres. David Williams (R-Burkesville). “There was no way in my judgment that the budget could have passed without adding in those rural development projects,” Stumbo said, according to an Apr. 3 story by The Herald-Leader’s Ryan Alessi.
(Comment: By statute, coal severance tax and tobacco settlement revenue is supposed to be spent on “economic development” measures so it is highly questionable whether it can legally be spent on pork. But that didn’t stop this group from passing it.)
House Appropriations and Revenue Committee chairman Harry Moberly (D-Richmond) voted “no” on the budget in a stunning development. Moberly is the budget guru of the House and was thought to be one of the architects of the compromise budget during the eight-day conference committee’s marathon meeting which began in public and ended behind closed doors under Kentucky State Police guard. Moberly continually refused to allow pork in the budget if education and human services were being cut. “I don’t believe that we’ve done the best we can do,” Moberly said about the pork deal, according to a story by The Associated Press’ Joe Biesk that was posted by The Cincinnati Enquirer on Apr. 3 at its nky.com. “If this is the best we can do, that’s pathetic.” Moberly’s “no” vote on a budget bill was his first in his 29 years in the House, according to an Apr. 3 story by Jack Brammer and Alessi.
Moberly characterized the budget and separate projects deal as a “diabolical deal with the devil” in which elementary, secondary, and higher education were sold out so that some public works projects could be built. “They want to buy us off to punish education – they want to buy us off with projects,” Moberly said during House floor debate on the budget bill. Moberly said that Stumbo’s deal with Williams made Stumbo and other House Democrats appear to be “dancing on a string like puppets” controlled by Williams and “you might as well give (Williams) an emperor’s crown,” according to Alessi’s Apr. 3 story. Moberly warned of the long-term implications of essentially bowing to Williams’ will. “In the future, he will feel no hesitation to under-fund education and under-fund human services, which they don’t care about,” Moberly cautioned his House colleagues.
Williams referred to Moberly’s House floor remarks as “highly unprofessional and uncalled for,” according to an Apr. 3 story by The Courier-Journal’s Tom Loftus. Williams and Moberly had engaged in bitter, public insults while the budget conference committee was open to the public. Williams made these remarks about the budget, according to Biesk’s story: “We have done the prudent and the proper thing in these economic times. We cannot allow public employees, public officials, schoolteachers or any other group to be an island of individuals that are completely isolated from hard economic times when the budget problems come forward and the economy turns down.”
Official revenue forecasts project that the state will take in about $900 million less than would be necessary to keep state spending at the same level for each of the next two years that it had been spending for this fiscal year – that is before Beshear’s 3% across-the-board cut for this year. In addition to Beshear’s failed casino initiative that he said could bring in as much as $500 million each year in new revenue, the Governor proposed a 70-cents-per-pack increase in the cigarette tax – a measure also rejected by lawmakers. The House scaled down – from Beshear’s proposal – a cigarette tax bump to 25-cents-per-pack, but the Senate stood firm and said “no” to that, too. Thus, there will be significant state spending reductions that will cause grief to certain Kentuckians.
Beshear responded to the budget’s passage and to whether he might veto it in a statement to reporters on Apr. 3 in Lexington, according to an Apr. 4 story by Brammer and Alessi at polwatchers.typepad.com: “At this point, no, I’m not thinking of vetoing the whole budget at all, but I am going to be looking at all the various parts of it to see what’s in there and whether there are items that should be vetoed.” The Governor said that March revenue collections indicate an ever-worsening revenue outlook – with March revenue down 5.7% from one year ago. He even suggested that a special legislative session might be necessary for a tax increase. “If it gets a lot worse, to me, we have no alternative but to come together again and find ways of raising revenues to meet our obligations,” Beshear said.
During a speech later in the day in Lexington, Beshear said that he was challenged by a “dysfunctional leadership process,” according to an Apr. 3 story by The Courier-Journal’s Stephanie Steitzer posted at courier-journal.com. Beshear has until Apr. 14 to veto the budget bill or to make line-item vetoes of certain appropriation items. The General Assembly plans to meet on Apr. 15 for its 60th and last legislative day of this legislative session at which time it could over-ride a Beshear veto by at least a 51% majority in each chamber – 51 votes in the 100-member House and 20 votes in the 38-member Senate.
After making drastic cuts in many programs in new executive branch and judicial branch budgets, state lawmakers passed a legislative branch budget which funds their operations for the next two years at a 5% increase, according to a story by WHAS-TV’s Mark Hebert posted on Mar. 27 at his blog at whas11.com. House Appropriations and Revenue Committee chairman Harry Moberly (D-Richmond) said that the General Assembly needed its own “rainy day fund,” in case it was called into special session during the next two years by the Governor. Beshear told Hebert that he was disappointed that lawmakers weren’t willing to “share the pain” produced by projected revenue declines.
Former Gov. Brereton Jones, who endorsed Beshear and is believed to have been one of his strongest campaign supporters, criticized the Governor’s handling of a failed attempt to achieve General Assembly passage of a proposed constitutional amendment to authorize casinos. Jones said that Beshear should have brought key lawmakers together in December to develop the proposal, had it identified as “House Bill 1”, and promoted the concept in his Jan. 14 “State of the Commonwealth” address. Beshear waited, instead, until Feb. 14 – midway during the 60-legislative-day session – to roll out the initiative.
Jones said that it will be more difficult later for Beshear to accomplish the objective. “A governor is strongest on the first day in office,” Jones said, according to an Apr. 2 story by Brammer. “They then start making decisions and every decision offends someone. Your number of offenders accumulates and it’s harder to get things done.”
Vice-president Dick Cheney flew quickly in and out of Lexington on Mar. 31 for a brief two-hour appearance at a campaign fund-raiser for state Sen. Brett Guthrie (R-Bowling Green) who is running to replace the retiring US Rep. Ron Lewis (R-KY2), according to an Apr. 1 story by The Herald-Leader’s Jim Warren. UK head men’s basketball coach Billy Gillespie was among the approximately 125 guests to greet Cheney. “I’m from a little town in Texas, and to have the privilege of meeting the second greatest leader in the world was truly memorable,” Gillespie said.
Guthrie is running unopposed in the May 20 GOP primary and will face the winner of a Democratic primary contest between state Sen. David Boswell (D-Owensboro) and Daviess County Judge Reid Haire of Owensboro. Guthrie said that he didn’t know how much that the fund-raiser brought in, but that people from all over the state – not just the Second Congressional District – attended the event. “The 2nd District is an open seat and it’s going to take a lot of resources for the race, so we’re going to have to raise money statewide as well as inside the district,” Guthrie said.
Clinton Leads Obama 2-1 in KY
US Sen. Hillary Clinton (D-NY) has jumped out to a 2 to 1 lead over US Sen. Barack Obama (D-IL) in SurveyUSA’s first poll of Kentucky Democrats that was released on Mar. 31. Clinton’s lead stands at 58% to 29% with 9% preferring other candidates and 4% undecided. The poll with a 4.1% margin for error included interviews with 572 likely Democratic voters.
SurveyUSA’s editor posted the following commentary at surveyusa.com: “In a Democratic Primary in Kentucky today, 03/31/08, 7 weeks till the votes are counted, Hillary Clinton defeats Barack Obama 58% to 29%, according to a SurveyUSA poll conducted for WHAS-TV Louisville and WCPO-TV Cincinnati. Clinton leads narrowly in greater Louisville, but leads decisively in other parts of the state, including 4:1 in Eastern KY. Obama trails by 20 among men, trails by 37 among women.”
Clinton Family Speaks All Over State
Clinton brought her presidential campaign to Kentucky on Mar. 29 speaking to about 2,500 in Louisville and about 3,500 in Madisonville. At DuPont Manual High School’s gymnasium Clinton spoke for 38 minutes and repeated her oft-used reference to Obama: “This election isn’t about the speeches we give, it’s about the solutions we offer,” according to a Mar. 30 story by The Courier-Journal’s Lesley Stedman Weidenbener and Joseph Gerth. Obama’s national introduction occurred during the 2004 Democratic National Convention when he was invited to deliver the keynote address. He was then only an obscure IL state senator running as the Democratic nominee for the seat of the retiring US Sen. Peter Fitzgerald (R-IL).
At a nearly packed Madisonville North Hopkins County High School gymnasium Clinton alluded to the fact that she is trailing Obama in a very close delegate race. “I’ve never stayed down, and America’s not going to stay down,” Clinton said, according to a Mar. 30 story by Alessi and Bill Estep.
Clinton’s husband, the former President, campaigned for her in Frankfort, Paris, Maysville, and Morehead just four days earlier before heading to West Virginia. Bill Clinton returned to the state on Apr. 3 to speak on behalf of his wife’s candidacy to over 3,000 people at Pikeville’s East Kentucky Exposition Center. Long-time Pikeville resident and former Gov. Paul Patton introduced the former President and said that he made eight visits to the state while in office – more than any other President. Sandwiched between her parents’ stops in the state, former “first daughter” Chelsea Clinton was in Louisville and Lexington on Apr. 1 to campaign for her mother.
Beshear, who was born and raised in Dawson Springs in rural Hopkins County, was originally billed as the featured speaker at the Madisonville event held in honor of the county’s first native-son Governor – Ruby Laffoon who served from 1931-35. “Perhaps some of you are where I am right now,” said Beshear, a super-delegate at the Democratic National Convention scheduled to begin on Aug. 25. “I haven’t quite made up my mind where I’m going yet,” Beshear added, according to the story by Alessi and Estep. About Clinton specifically, Beshear said, “Senator Clinton not only was a great first lady, she’s also been a great senator from the state of New York,” Beshear said, according to Alessi’s Mar. 31 story. “She’s running a great campaign.”
Weidenbener reported in a separate Mar. 30 story on a Q. and A. interview that she had with Clinton that touched on a segment below on the Bush administration’s privatization efforts in highway and bridge construction.
“Q: The Bush administration has been backing off federal funding of some major highway projects in favor of private investment and tolling.
“A: That is such a mistake. This is not in line with American values or progress. We have always stepped up and invested in our country, built what we needed and created a strong and growing economy.
“It is typical of the Bush administration. They wanted to privatize Social Security. They want to privatize transportation. That is not the way a great country acts, and we’re not going to let it happen.
“Q: Do you think it will take an increase in the gas tax eventually to maintain highway funding?
“A: I want to look at a bonding program like we had during World War II. Americans lined up and bought bonds. If we’re going to be investing in our future, let Americans realize the benefits, not corporations and foreign entities.
“So let Americans buy Rebuild America bonds and then we can take the proceeds and put them to work and people will be able to see the results.”
Bad-boy Republican congressional candidate Chris Theineman still can’t make up his mind whether to avenge the public boot that he got from Jefferson County GOP officials by going full bore against former US Rep. Anne Northup’s (R-CD3) bid to reclaim her old seat in the US House. Theieneman said that he is “still on the fence” about the race even though he has already filed and his name will appear on the May 20 primary ballot, according to WHAS-TV’s Mark Hebert’s story posted on Mar. 28 at whas11.com. Theieneman was forcibly ejected from the Jefferson County Republican Convention on Mar. 15 and was stripped of his party chairmanship in the 44th Legislative District because he made a Jan. 31 comment to WHAS radio talk show hostess Francine Cucinello that he was dropping his bid against Northup and was endorsing US Rep. John Yarmuth’s (D-CD3) re-election.
Theieneman also explained to Cucinello that party officials intimidated him into withdrawing from the race against Northup. So these same officials removed him from the party internal reorganization meeting because of his party disloyalty. Theineman was once a Democrat and even lost a race for county offices as a Democrat. He said on the radio that he was changing his voter registration back to the Democratic Party, but reneged on that promise, too, and even ran for and was elected to a GOP party office as covered above.
Northup served five terms in the House and was even on the very powerful Appropriations Committee when she was upset by Yarmuth on Nov. 7, 2006 by only 5,890 votes. Two months later, Northup jumped in a controversial GOP primary against former Gov. Ernie Fletcher and accused him and his administration of unacceptable ethical improprieties in connection with a hiring scandal in which he and certain officials were accused of violating the state employee merit system laws. However, the Louisville Republican found that she was virtually unknown across the state and that raising money from Republicans against the first sitting GOP Governor in 32 years was nearly impossible. Although she crushed Fletcher in Jefferson County, Northup only received about 36% of the overall state-wide May 22, 2007 GOP primary vote to Fletcher’s 50%. Mega-millionaire Paducah businessman Billy Harper managed to get about 14%. Thus this year, Northup is making her third race in three years.
A story by The Washington Post’s Lyndsey Layton and Spencer S. Hsu that examined the highway privatization initiatives of US Transportation Sec. Mary Peters and her top staff was published in The Courier-Journal’s Forum section on Mar. 23. In connection with this column’s on-going coverage of the absence of US and state funding for four new interstate bridges planned to cross the Ohio River between Cincinnati, Louisville, and Henderson, several passages from this story are germane to the Kentucky discussions that have touched on privatization of these projects.
“…political appointees have spent the latter part of President Bush’s two terms laboring behind the scenes to shrink the federal role in road-building and public transportation. They have also sought to turn highways into commodities that can be sold or leased to private firms and used by motorists for a price. In (their) view, unleashing the private sector and introducing market forces could lead to innovation and more choices for the public, much as the breakup of AT&T transformed telecommunications…
“ ‘Everything they’re doing is designed to drive things to privatization,’ said Rep. Peter DeFazio, D-Ore., chairman of the House Transportation and Infrastructure highways and transit subcommittee. DeFazio said the nation long ago settled that roads are public goods. ‘They’re just trying to undo 200 years of history and go back to the Boston Post Road.’
“Even if the next president reverses its policies, the Bush administration will leave a legacy of new toll roads across the country, a growing number of public roads leased to private companies, and dozens of stalled commuter rail, streetcar and subway projects - including the $5 billion extension of Metro to Dulles International Airport…
“The focus on toll roads alarmed the transit industry, which argues that public transportation is the best way to fight gridlock in cities. Industry leaders say the DOT has made it increasingly difficult for expensive rail projects to qualify for federal dollars. The number of major new rail and bus projects on track for federal funding dropped from 48 in 2001 to 17 in 2007, even as transit ridership hit a 50-year high last year and demand for new service is soaring…
“Public distrust of privatization, however, remains high. Republicans lost control of the Indiana state legislature in 2006 partly because of controversy over Republican Gov. Mitch Daniels’ lease of a public highway to Macquarie. Political opposition has also forced governors in New Jersey and Pennsylvania to suspend plans to lease roads. Texas lawmakers put a two-year freeze on the governor's strategy to privatize a 4,000-mile network of tolled highways.
“Last month, the Government Accountability Office warned that tolls on privatized roads are typically higher than if the roads remain under public control, because of the need to generate steady profits for private investors. The report said the federal government needs to better protect the public interest….”
Mar. 29 – The Courier-Journal: “Taking care of no. 1”
“We’ve long advocated a strong legislative branch, so we can’t really complain about the $10 million increase the General Assembly has voted for its own operations over the next two years.
“The lawmakers and their staff have tried to draw down their own ‘rainy day’ fund over the past biennium, and they ended up taking the reserve a little too low. A little boost was justified.
“What’s mystifying is why they can’t be as responsible in funding other parts of government, like social services and health care, education and prisons. What kind of myopia lets them take care of the legislative branch but ignore real needs of the judiciary?
“We have one of the better legislative operations in the country, built on the efficient model suggested by the National Council of State Legislatures, with a centrally administered, nonpartisan and quite expert staff. It ought to be funded properly.
“So should the rest of state government.”
Mar. 30 – The Courier-Journal: “Gambling losses”
“If anyone seeks a case study on how to mess up a legislative proposal, they ought to look at the fate in Kentucky of expanded gambling.
“What Kentuckians witnessed in the past three months was the loss of the best chance yet for the state to retain hundreds of millions of gambling dollars spent across the border every year. The opportunity was missed even though studies show 80 percent of the public wants to vote on the issue, whether for or against…
“Until the voters get a chance to vote expanded gambling up or down, the possibility of all that money as the revenue source is going to keep Kentucky paralyzed. The paralysis has lasted for more than a decade now. Even a ‘no’ vote would be better than limbo.
“Lost in a lot of the discussion of expanded gambling plans this year was another reality: The horse industry matters in this state. It’s a huge economic engine, one being challenged by many other states.
“Giving the horse industry an advantage in an expanded gaming plan shouldn’t be dismissed as a way to bail out a bunch of rich horse guys. It’s a strategy for keeping an important part of the economy healthy.”
Apr. 2 – The Herald-Leader: “Budget inflicts unnecessary pain”
“Lawmakers can take little satisfaction today in approving a two-year budget that falls far short of meeting Kentucky’s needs.
“The damage to health care, social services and environmental protection has yet to be detailed. But it must be massive since the good news is that higher education gets cut only three percent. (That comes on top of last year’s three percent cut for a cumulative loss of six percent. Can you say ‘tuition hike’?)…
“One possibly good thing about what one conference committee member called a scorched-earth budget: The pain that it will bring across Kentucky will make a cigarette tax increase more appealing, even to Senate Republicans, next year when the absence of legislative elections gives them more courage.”
Mar. 30 – Jill Johnson Keeney in The Courier-Journal: “Gambling defeat hurt Beshear”
“…the really big story last week came on Thursday afternoon, when Gov. Steve Beshear declared the expanded gambling bill dead. ‘We agree we do not have the votes necessary and no prospect of getting them in the time we have remaining,’ he said after conferring with House leaders in his office.
“Although no one was surprised that the bill didn’t make it through the entire legislative process, prominent Democrats were disturbed that it never even came to a vote in the House. The Governor campaigned on gambling; he had full financial support from the Kentucky gambling and horse interests; he made it the top priority of his legislative agenda. Then he turned out to lack the leadership skills and the ability to spell out a long-term vision for Kentucky that he needed to win over even his own party….”
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Lawreader: