LawReader : OUR MAIN - LAW DIGEST INDEX : JUDGE HORNER'S ROUNDUP FOR WEEK OF APRIL 19, 2008

A fitting capstone to this General Assembly’s effective funding cut of public education at all levels was its final act of increasing the pork projects it will take back to its members’ districts. During their “veto recess” after passing the main $19 billion no-new-taxes state budget on Apr. 2 – and a supplemental appropriations bill that cooks up $150 million of “the other white meat” – they decided that wasn’t enough, according to an Apr. 15 story by The Courier-Journal’s Tom Loftus. So on Apr. 15 they added another $75 million mainly for water and sewer projects of which $50 million will be borrowed at a cost of $2.1 million. “It takes $2.1 million worth of debt service in the second year. … We dropped a considerable amount of tobacco money to the bottom line, and we are just using some of that tobacco money,” Senate Pres. David Williams (R-Burkesville) told Loftus.

Although Gov. Steve Beshear did veto a handful of items in the Apr. 2 main state budget, he did not veto any of the $150 million in the Apr. 2 supplemental bill. However, with lawmakers adjourning sine die on Apr. 15, they will not have the opportunity to over-ride any Beshear vetoes of any legislation that they passed on Apr. 14-15 including this last $75 million. Beshear wouldn’t commit himself on the new pork slab, saying that he wants to review lawmakers’ justification for it. “We’ll have to look at the total amount of bonded indebtedness that the state may incur,” Beshear said, according to Loftus’s Apr. 15 story. “We’ll have to look at the source of funds that will pay the debt service. We’ll have to look at what they’re talking about financing.” Beshear added that borrowing for these projects while cutting education at all levels “is certainly a concern.”

House Speaker Jody Richards (D-Bowling Green) defended the grand total of $225 million of “projects” going into counties, saying that many line items were for water and sewer lines and treatment centers. On the fact that some people in the state still don’t have running water, Richards said, “I think it’s a travesty,” according to a story by The Herald-Leader’s Ryan Alessi posted by the newspaper on Apr. 14 at its polwatchers.typepad.com. Senate Appropriations and Revenue Committee chairman Charlie Borders (R-Grayson) said the projects are worthy and will create jobs. “Down (economic) times are the most critical time to do this,” Borders said, according to Alessi’s Apr. 16 story.

All the pork comes as the state faces a $900 million revenue shortfall over the next biennium if you use the current fiscal year’s original spending plan as a one-year benchmark, but that is if you don’t factor in Beshear’s 3% cut in state spending that he ordered in January to adjust to a $434 million revenue decline in this fiscal year ending June 30. Thus, higher education and most state agencies are bracing for a 6% net budget cut compared to what they started with on July 1, 2007. Base funding for K-12 public education will, however, remain flat, but that will be eroded by inflation over the next two years.

Lawmakers failed to pass a public pension reform act that would have scaled back retirement benefits for new state and county employees hired after June 30. At issue was the Senate’s insistence to merge a defined contribution component in with reductions in the current defined benefit plan. The House wanted less reduction in the current defined benefit plan and no required defined contribution piece. Richards said that the opposition of the Kentucky Education Association (“KEA”) and the Jefferson County Teachers Association (“JCTA”) – which opposed the Senate’s proposal – was a reason that no compromise bill on the subject was passed, according to Alessi’s Apr. 16 story at polwatchers.

Richards also said that the Senate’s attempted compromise bill only arrived in the House at 11:15 p.m. on Apr. 15 and that left not enough time – not even with the clocks stopped (see below) – for House members to read it and feel comfortable about voting for it before time expired, according to a story by WHAS-TV’s Mark Hebert posted on Apr. 16 at whas11.com. Richards said that was the Senate’s last minute strategy at trying to get its bills passed and “we’re just not going to take that from them anymore.”

Williams accused the KEA and the JCTA of threatening to withdraw support for certain House members’ re-election campaigns this year if they backed the Senate’s version of public pension reform, according to an Apr. 17 story by Alessi and Jack Brammer in The Herald-Leader. Williams asked, “The question rises now: Will we ever be able to pass meaningful pension reform if the House leadership and many of their members are completely captive to the public employee organization?”

KEA President Sharron Oxendine specifically denied Williams’ accusations, and public employee leaders solely blamed Williams for the debacle. They pointed out that Williams told reporters in February that public pension reform was so important that the Senate would go along with anything the House recommended to cut back on costs. “I was disappointed that they couldn’t work out a deal considering that the president of the Senate said that he would accept the House bill a couple months ago,” Kentucky Association of State Employees president Lee Jackson said, according to an Apr. 17 story by The Courier-Journal’s Stephanie Steitzer.

Some governmental and business leaders are now urging Beshear to call a special session on the subject of public pension reform, but Sen. Damon Thayer (R-Georgetown) said that a special session should be called only if there is complete agreement on pension reform beforehand, according to a story by The Cincinnati Enquirer’s Patrick Crowley posted on Apr. 17 by the newspaper at its nky.com. “We don’t need to spend that kind of money in a special session without an agreement reached ahead of time,” Thayer said. “It is very frustrating to us. It is two years now we thought we had an agreement only to see it fall apart.”

Beshear said that he prefers to let the 2009 regular session of the General Assembly deal with the pension issue, according to Steitzer’s story. Lawmakers return next January for a four-day re-organizational session and then in February for a 30-day session. Senate and House leadership elections will occur in the brief January session.

An ethics bill promoted by Beshear died after Senate Republicans insisted that it should prohibit state lobbyists and state contractors from contributing to a Governor’s re-election campaign. Beshear said that he would agree to that provision if the same provision applied to incumbent state lawmakers. But the Senate would not agree to Beshear’s added condition, so in the end the two separate bills passed by the House and Senate were not resolved. “I think in many ways it’s been a disappointing session,” Beshear said, according to Alessi’s Apr. 16 story at polwatchers.

Beshear’s signature issue – bringing casino gambling to the state – was abandoned weeks ago after not managing to even pass the House where support for the measure was greater than in the Senate. Beshear projected that, when up and running, a full complement of casinos would produce $500 million per year in added revenue for the state treasury. Kentucky gamblers are estimated now to be spending $1.5 billion per year in casinos in Illinois, Indiana, and West Virginia.

The state’s equine industry desperately backed the casino initiative in the hope of having some of the revenue diverted to subsidizing its industry. They say that Kentucky has lost its position as the nation’s leader in thoroughbred breeding as many states use casino revenue to supplement winning purses as bonuses to horses foaled in their states that win races there. Thus, they say breeders are packing up and moving out of Kentucky never to return, and that it will be a matter of time until they probably are all gone.

Some lawmakers were angry and upset about the closing moments of the General Assembly that included the clocks being stopped in both chambers so that bills could be passed (sort of like “in their dreams”) before the Apr. 15 midnight deadline. The real time sine die adjournment was at about 1:00 a.m. on Apr. 16 but the clocks on the Senate and House walls all read midnight. “I’ve been here 24 years. It was the worst ending I’ve ever seen,” House Speaker Pro-tem Larry Clark (D-Louisville) told The Associated Press’ Joe Biesk. “I’m embarrassed to be part of leadership, embarrassed that it happened that way,” Clark added, according to Biesk’s story posted on Apr. 16 at nky.com. (In the Senate when real time passed midnight but before the Senate adjourned “in their dreams” on Apr. 15, four senators sang “Happy Birthday” to Sen. and former Gov. Julian Carroll (D-Frankfort) who turned 77 on Apr. 16, according to Alessi’s Apr. 18 story.)

Former state Supreme Court Justice James Keller said that bills enrolled after midnight on Apr. 15 would probably have a constitutional defect, but he said someone affected by the legislation would probably have to file suit to have a new law invalidated. That is because all legislation passed by lawmakers is presumed valid unless a court later intervenes. “If they have evidence that clearly shows that these bills were enrolled on April 16, they (those bills) may be held to be enacted in violation of the constitution and therefore invalid,” Keller said, according to Alessi’s Apr. 17 story. (Section 56 of the state constitution addresses enrollment of bills – a term that requires that a bill has to be passed by both chambers and signed by the presiding officers of both chambers.)

State Atty.-Gen. Jack Conway declined to offer an opinion on the after-midnight issue. “That could be a matter brought to our office for an opinion if someone wants to challenge that legislation. I’m not inviting that, but I’m going to reserve judgment on that,” Conway told Alessi.

Richards told Alessi that he plans to run in January for another two-year term as House Speaker. It is unclear whether he will get opposition and whether the other four House Democratic leaders will seek re-election to their leadership posts. Richards only edged now-House Majority Whip Rob Wilkey (D-Scottsville) by one vote in being re-elected Speaker in January 2005. Richards did not draw opposition in 2007.

In the wake of the Council for Postsecondary Education’s (“CPE”) Apr. 14 selection of interim president Brad Cowgill as permanent president, Beshear requested in an Apr. 16 letter that Conway issue an official opinion on the legality of the CPE’s action, according to an Apr. 17 story by Alessi and Art Jester. Beshear contends that the CPE violated the “letter and spirit of the law” by not conducting a national search and by not hiring a professional educator of national reputation with experience in postsecondary education – requirements specified in the 1997 higher education reform statutes. Conway actually co-authored the law as an aide to then-Gov. Paul Patton who made the reform law the signature accomplishment of his administration. Patton rammed it through a special session of the General Assembly over the intense opposition by then-UK president William Wethington and by most other state university presidents.

CPE chairman John Turner responded by issuing a press release saying the CPE “believes that it has complied with both the spirit and the letter of the law.” Turner’s statement also said that “nothing in the law requires that the hiring of an interim terminates the search or requires that it be restarted.” Cowgill has been the interim president since Sep. 1 after leaving his prior post as budget director for Beshear’s predecessor, former Gov. Ernie Fletcher.

State law requires that the CPE permanent president is to be paid more than the highest paid president of any of the state’s eight public universities. Currently WKU president Gary Ransdell tops that list at a salary of $351,516, according to the story by Alessi and Jester. Cowgill’s only prior experience in education at any level was as general counsel to Fayette County School District and as chairman of the advisory board of Lexington Community College, now Bluegrass Community and Technical College.

During an interview, Turner acknowledged that a “majority” of the eight presidents oppose Cowgill’s appointment, according to the story by Alessi and Jester. Cowgill was selected by 10 of the CPE’s 12 members, with two abstaining. Beshear, by an Apr. 16 letter, has asked the CPE to defer its execution of a permanent employment contract to commence on May 1 until the legal questions surrounding the issue can be resolved. Cowgill’s interim contract expires on Apr. 30.

Williams criticized Beshear’s intervention into the matter, according to an Apr. 17 story by The Courier-Journal’s Nancy C. Rodriquez. “I think it’s the prerogative of the Council on Postsecondary Education to choose the person that they think will be the best president,” said Williams who believes Cowgill to be a strong leader. “I think the state and higher education would be better served if the governor didn’t meddle.”

State Sen. Tim Shaughnessy (D-Louisville) called the CPE’s action “irresponsible.” Shaughnessy added, “What is so sad about this is we are at such a crucial time in the efforts to continue to advance the progress this state has made in postsecondary education. And instead of focusing on the challenge we have, a lot of energy is going to be wasted on what is tantamount to political infighting.”

US Sen. Hillary Clinton (D-NY) is likely to defeat US Sen. Barack Obama (D-IL) in the May 20 Kentucky primary, and it is not going to be pretty. Clinton now leads Obama 62-26 with 9% preferring other candidates and 4% undecided in SurveyUSA’s poll released on Apr. 15. Thus, Clinton has increased her lead over Obama to 36% from the 29% margin she enjoyed in SurveyUSA’s earlier poll released on Apr. 1. The new poll has a 4.1% margin for error. The following is the poll editor’s commentary:

“In Kentucky, Clinton 36 Lengths In Front of Sputtering Obama: In a Democratic Primary in Kentucky today, 04/15/08, five weeks to the vote, Hillary Clinton defeats Barack Obama 62% to 26%, according to a SurveyUSA poll conducted for WHAS-TV Louisville and WCPO-TV Cincinnati. Compared to an identical SurveyUSA tracking poll released two weeks ago, Obama has lost ground among men and women, young and old, conservatives and moderates. In Western KY, Clinton had led by 30, now leads by 43. In Eastern KY, Clinton had led by 52, now leads by 63 in North Central KY, Clinton had led by 30, now leads by 39. In greater Louisville, Clinton had led by 12, now leads by 16.”

Two officials of Clinton’s campaign have criticized remarks by Obama about small town Americans, according to Hebert’s story that was posted on Apr. 12 at whas11.com. Obama, during a recent speech in San Francisco, said, “...it’s not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.”

Clinton’s regional campaign coordinator, Jerry Lundergan, said, “…The families of Kentucky are proud, not bitter. They are hungry for leadership that respects them and understands their struggles, not leadership that puts them down for their beliefs… Kentucky’s strength lies in our small communities. We are proud of the towns all across our 120 counties, full of people who look and sound nothing like those Senator Obama portrayed.” Lundergan is a former Kentucky Democratic Party Chairman.

State Rep. Greg Stumbo (D-Prestonsburg), formerly state House Majority Leader and state Attorney-General, released a statement saying, “…After representing eastern Kentucky for 25 years, I can tell you what we don’t need are stereotypes that discount our faith and our values. We need a President with a real plan that produces real results.”

Clinton has made a major bounce in Kentucky and is in a statistical dead heat with US Sen. John McCain (R-AZ) if the presidential election were held today between the two of them. McCain has a narrow 48-46 lead over Clinton in a SurveyUSA poll released on Apr. 17 with a 4.3% margin for error. Clinton has sliced 8% off McCain’s lead over her in the March poll. McCain would defeat Obama in KY by an overwhelming 63-29 if a contest between those two were held today. That margin is virtually unchanged since March.

Millionaire Louisville businessman Greg Fischer was the first of the US Senate candidates to announce what his first quarter campaign finance report would say – that he contributed $510,000 to his own campaign along with receiving just over $500,000 from individual donors, according to Alessi’s Apr. 6 story. “Dollar by dollar, voter by voter, momentum is growing stronger in every region of the state. We are confident that our campaign is positioned to defeat Bruce Lunsford on May 20,” Fischer said in a press release. “Voters are beginning to realize I am the real Democrat offering real change.”

Multi-millionaire Louisville Bruce Lunsford reported that he collected about $235,000 from individuals and donated $545,000 of his own funds to the campaign – a total of about $780,000 as of Mar. 31. Since then, Lunsford has donated $470,000 to his race, according to an Apr. 12 statement by campaign spokeswoman Allison Haley, to bring his overall but unofficial total up to about $1.015 million.

If the heavily-favored Lunsford wins the May 20 Democratic US Senate primary, the “millionaire’s amendment” in US campaign finance law is expected to kick in if he is engaged in a free-spending race with US Senate Minority Leader Mitch McConnell (R-KY). That provision allows contributors to non-millionaire candidates to triple (from $2,300 to $6,900) their maximum contributions if the millionaire opponent self-funds beyond $559,000 what the non-millionaire has given to his own campaign. Thus, McConnell – who will not likely give much if anything to his campaign – will likely persuade his wealthy contributors to give far beyond the ordinary $2,300 cap if Lunsford, as the Democratic nominee, goes into his own personal pocket to finance most of his campaign.

Fischer cannot take advantage of the amendment’s provision because at this point Lunsford has only put in slightly more than $500,000 (a total of $1.015 million) more than the amount ($510,000) Fischer has invested. Apparently, Lunsford is very carefully watching what Fischer does and may not go beyond the $559,000 threshold trigger that would allow Fischer the ability to do what McConnell will do against either candidate in the general election campaign. Lunsford’s other five opponents can immediately take advantage of the stepped-up limits from their donors, but it is unlikely that they have very many financial contributors who have the resources to do so.

McConnell’s campaign issued an Apr. 14 press release that it had brought in about $12.2 million since McConnell was re-elected in 2002 and had more than $7.7 million in the bank as of Mar. 31, according to Alessi’s Apr. 15 story at polwatchers.

Rumors were confirmed in an Apr. 5 story by The Courier-Journal’s Joseph Gerth that Fischer is the only Democratic candidate who has refused to sign a pledge to avoid negative campaigning against his opponents. The pledge was requested by state Democratic chairwoman Jennifer Moore. Fischer’s campaign operatives have made no secret of their intentions to go hard negative on the offensive against Lunsford.

The pledge against negative campaigning was originated by Lundergan, Moore’s predecessor, who was successful in persuading Beshear, Lunsford, Richards, and every other Democrat in last year’s gubernatorial race to abide. Former Lt. Gov. Steve Henry was accused of stepping slightly over the line to criticize Beshear as Beshear steadily pulled away from Henry and the rest of the field as the campaign progressed last spring. Henry was the front-runner when the campaign kicked off. Lundergan’s initiative is credited with engineering both a remarkably civil primary campaign and post-primary Democratic Party unity that translated into Beshear’s 180,000-vote victory over the GOP’s Fletcher.

Fischer is distributing campaign material that criticizes Lunsford’s past endorsement of Fletcher and his contributions to McConnell during McConnell’s early years in the US Senate, according to a story by Crowley that was posted on Apr. 17 at nky.com. Lunsford abandoned his candidacy four days before the 2003 Democratic gubernatorial primary won by then-state Atty.-Gen. Ben Chandler. In October that year, Lunsford endorsed Fletcher and later headed Fletcher’s state government transition team. Lunsford has apologized for his support of both Fletcher and McConnell in the past, and points out that last year he was the first of Beshear’s primary opponents to endorse Beshear as a way of quickly uniting the Democratic Party after the primary.

Fischer unveiled his TV campaign on Apr. 12 in an ad that he calls “The Promise.” Fischer says that Kentucky wants someone who is “not a part of the system because the system’s broken” and “we need to get our country back.” The ad, which does not mention Lunsford or McConnell, is running in all state media markets, according to Fischer campaign spokeswoman Nicole Candler. Fischer began a three-week tour of the state on Apr. 7, according to a story by The Herald-Leader’s John Stamper that was posted on Apr. 12 at polwatchers.

Part of Fischer’s expected attack on Lunsford will include an allegation that Lunsford is the party establishment’s candidate and is, thus, beholden to US Senate Democratic leaders who are seen as part of the overall DC problem, according to a Mar. 26 story by The Kentucky Gazette’s Kate McCann. Lunsford has the open support of Beshear and US Sen. Chuck Schumer (D-NY), chairman of the Democratic Senatorial Campaign Committee (“DSCC”). Fischer state campaign manager Kim Geveden said about his candidate, “He’s not obligated or in debt to the politicians in Washington. And he can advocate and fight for meaningful change that Bruce Lunsford can’t.” Geveden said Lunsford will have to be “complicit” in following the DC status quo if he gets elected.

Lunsford political consultant Dale Emmons disputed Geveden’s remarks and said that the ultimate insider in the race is McConnell – not Lunsford. “They’re going to have to stretch big time to make us the establishment candidate, because Bruce Lunsford has never held elected office in his life. He has never held a government job,” Emmons told McCann. “He’s never been an insider. So he’s had to get to know these guys, and that’s the big difference.”

“Kentucky lawmakers who claim they didn’t raise taxes this year may be fooling themselves. But they aren’t fooling the students at the state’s public universities, or anyone helping those students foot the bill.

“University of Kentucky was the first to reveal its plans for increasing tuition next year, and the number came in at 9 percent. That means costs will be bumped up another $717.50 in the fall, putting the total bill for instate tuition, housing, dining and mandatory fees at $13,572.50 a year.

“And even if it isn’t the kind of a tax that gets rabid anti-taxers like Grover Norquist stirred up, by what flaky reasoning is it supposed to be more acceptable than some of the minor tax increases lawmakers could have chosen instead?...

“…It’s easy to point to the Governor and say, ‘You didn’t get your bills passed; you didn’t get your way.’ But Gov. Beshear is working with a legislature that is now more independent that it probably ever has been. We’re seeing a manifestation of changes made over the years that has given the legislature this independence, yet now we criticize the executive for not being able to push the lawmaking body around. Why is there an assumption that because House Speaker Jody Richards is a Democrat he has to agree with legislation put forward by a Democratic Governor? Or, that because Senate Pres. David Williams is a Republican, he’ll naturally disagree? As citizens, we should be glad the system has such checks and balances.

“To use a cliche`, Gov. Beshear is trying to turn around a big ship, and that can’t be done in 100 days. People are used to doing things ‘the way it’s always been done,’ and look where we are. We’re is a sea swimming with low educational achievement, comparatively low per capita income, and parochial desires for projects and pork that consume money that could better be used elsewhere.”

“Mark Hebert of WHAS11-TV reported recently that Chief Justice Joseph Lambert is expected to recommend an increase in filing fees of $50 for circuit court civil cases, $25 for district court civil cases and $26 for wage garnishment filings. The reason? To offset budget cuts imposed on the judicial branch by the General Assembly.

“Deborah Yetter of The Courier-Journal recently reported that some of the 35 boards and commissions regulating various professions in this state may be forced to raise licensing fees for members of those professions. The reason? Lawmakers raided these agency’s restricted funds to help balance the current budget as well as the spending plan for the next two years. The total haul from the raid was more than $11 million.

“University of Kentucky President Lee T. Todd Jr., announced Tuesday that he will propose tuition increases for the 2008-2009 academic year of 9 percent for in-state undergraduates and 6.6 percent for out-of-state undergraduates. (Expect the state’s other public universities and colleges to follow suit.) At least part of the reason was the 3 percent cut the new General Fund budget would impose on state universities, which comes on top of the 3 percent cut ordered by Gov. Steve Beshear to make up a projected revenue shortfall in the current fiscal year.

“To refer to these as fee increases and tuition increases is an exercise in semantics. Realistically, they are tax increases imposed on litigants, licensed professionals and students and their families. And the blame for these tax increases rests not with the courts, the regulatory boards and commissions or the institutions of higher learning.

“Kentucky’s lawmakers bear the sole responsibility for these tax increases, particularly those lawmakers who lacked the guts to support proposals to generate state revenue either through an increase in the cigarette tax or by approval of casino gambling.

“When they go before their constituents to brag about not raising taxes, they will be lying through their teeth. They raised these particular taxes by virtue of their inaction on other revenue proposals. But this way, these spineless wonders forced others to do their dirty work for them.”

“Grover Norquist, the neo-cons’ anti-tax idol, is famous (or infamous, depending on your leanings) for saying, ‘My goal is to cut government in half in 25 years, to get it down to the size where we can drown it in the bathtub.’ I hate to be the one to break the news to Norquist, but he’s a little soft on government compared to the Kentucky General Assembly.

“According to figures the state Personnel Cabinet provided to The Courier-Journal’s Tom Loftus for an April 6 story, there were 39,297 state workers on June 30, 2000. Thursday, The State Journal reported Thursday that the state payroll totaled 33,673 as of March 14. I suspect years of revenue shortfalls, aided by a General Assembly that would rather cut off its collective arm than raise taxes, had something to do with the shrinkage.

“Now, facing another shortfall, the General Assembly has passed a budget that dictates a reduction in the state work force of about 3,400 jobs (supposedly through the attrition of a mass retirement exodus). Since I doubt that the number of state workers has increased dramatically since June 30, 2007, my calculations tell me this reduction in force will leave the state with about 30,000 employees, or about 22 percent less than on June 30, 2000.

“If the General Assembly continues this trend, the number of state workers would be cut in half in less than 20 year period, more than five years faster than Norquist's timetable for the federal government.

“…‘Stopping the clock’ and refusing to recognize the midnight hour and final minute of the legislative session has been done in past legislative sessions. But that was before everything was computerized. So one has to wonder if any actions logged into the legislative computers after midnight this morning will be valid. There’s probably no way to alter the log in times on the LRC computers. I’m headed to Frankfort this morning to pick up the pieces off the scrap heap known as the 2008 Legislative session.”

“Total chaos. Utter confusion. An indifference toward legal niceties that led to a resurrection of the good old days of stopped clocks and floor sessions that ran beyond the constitutional midnight witching hour into the wee hours of the morning. (Darn those computerized time stamps.)