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JUDGE HORNER’S ROUNDUP FOR WEEK OF AUG. 9, 2008
Saying that higher inflation and falling gasoline tax revenue are the reasons, Gov. Steve Beshear announced at an Aug. 4 press conference that the state cannot build the highways that lawmakers want and that he will review every pending highway project on the basis of true need, according to an Aug. 5 story by The Herald-Leader’s Beth Musgrave. Beshear has formulated an initiative called “Practical Solutions” which he said would set forth some standards for review of the planned projects. The Governor did not lay out a certain dollar target of how much he intended to save in spending, but he stressed that highway and bridge safety was at the top of his list of priorities. (See interstate bridges summary below.)
“We will simply tackle more projects sooner by being judicious in how we design and how we build,” Beshear said, according to a story by The Associated Press’ Joe Biesk posted on Aug. 4 at The Herald-Leader’s Kentucky.com. “Of course we’re going to still build four-lane roads where needed, but plenty of other projects can and will be scaled back…We must choose wisely when deciding where and how to invest our limited transportation dollars… The only question is: Can it be built more cost effectively and cost efficiently and still accomplish the intended purpose?”
State Transportation Cabinet Sec. Joe Prather said he expected future income for the state’s road fund would be “downsized dramatically,” according to Biesk’s story. Figures now indicate that the state will receive at least $190 million less from the Federal Highway Trust Fund than anticipated for the next fiscal year. Because the state’s fiscal year just began on July 1, it is too early to forecast how much under projection that state gasoline taxes will bring in. The budget was passed by the General Assembly back in early April before crude oil briefly rose to about $147-per-barrel before setting back to about $120 where it is currently. Drivers nation-wide and in Kentucky have consequently curtailed their gasoline purchases. Asphalt and other highway-construction costs that are directly related to the cost of energy have skyrocketed.
Beshear emphasized that the cabinet would hold the line on insisting that winning highway contract bidders must not exceed the cabinet’s own confidential cost estimate of a particular road project. The administration of former Gov. Ernie Fletcher is currently under a FBI inquiry that press reports say relates to allegations that officials allowed contractors to know in advance the confidential cost estimates so that they could make bids to always get the maximum number that the cabinet was willing to pay for a project. US laws may have been broken because so much federal money is used for these projects. During the Fletcher administration, the state was flush with money from its own gasoline tax revenue and highway bond issues passed by lawmakers. Beshear derailed Fletcher’s re-election bid last Nov. 6 by about 180,000 votes.
“This cabinet over the years has been a cesspool of cronyism and inefficiency – not because of the thousands of employees out here who have done a conscientious job, but because it has been overly political,” Beshear said, according to an Aug. 5 story by The Courier-Journal’s Tom Loftus.
The proposed $4 billion Ohio River Bridges Project at Louisville – to include two new interstate bridges – will be a part of Beshear’s overall highway construction review (see above segment). “That project is not immune from the look we’re going to take,” said Prather, according to Loftus’ story. But Beshear said that a re-examination of whether Louisville needs two bridges will not be reviewed as the administration is still going through with a plan to build both – one downtown and one upriver near Prospect.
The Aug. 1, 2007 collapse of an I-35 westbound bridge in Minneapolis that killed 13 and injured 145 motorists is having an impact on how US and state fuel taxes are spent for interstate highway projects. “Our first priority should be maintaining those bridges and highway projects that we already have and I think (the state) has done a reasonable job given the limited resources that they have,” said state Rep. Don Pasley, chairman of the state House budget review sub-committee on transportation, according to a July 31 story by The Courier-Journal’s Marcus Green.
The cabinet has not yet estimated the total amount of money necessary to repair about 2,800 bridges throughout the state that the cabinet believes are “structurally deficient or close it,” according to Green’s story. But it has only $87 million for such work during this fiscal year, and that is the exact amount that the cabinet’s estimate is for the 45-year-old I-65 Kennedy Bridge’s needs alone. The 19 other most heavily bridges in the state in need of repair are the 19 I-65 bridges crossing Louisville surface streets from the Kennedy south to Broadway. “The need far outweighs the budget we currently have,” said cabinet spokeswoman Robin Jenkins. Cabinet officials stress, however, that none of the 2,800 Kentucky bridges that they have examined are in danger of collapsing as the I-35 bridge did last year.
Cabinet officials blame the problem on the decline in federal funds. The 18.4-cents-per-gallon US fuel tax has not been increased since 1993. Consequently, 15 years of inflation and fewer gallons of fuel purchased by US drivers operating more fuel-efficient vehicles – plus the huge drop-off in Americans’ driving recently – has just about brought the trust fund to its knees. US Transportation Sec. Mary Peters has said for two years that beginning on Oct. 1 there will no longer be any funds for new highway construction, and that the trust will only divvy up money for maintenance of existing highways and bridges.
US officials estimate that $65 billion is necessary to repair the country’s bridges. But, of course, this number does not include the billions of dollars of repairs that the interstate highways’ surfaces currently need also.
The 128th annual St. Jerome’s Roman Catholic Parish picnic at Fancy Farm in Graves Count usually has at least one major political surprise each year. This year’s event on Aug. 2 featured the return of US Sen. Jim Bunning (R-KY) who claimed that he and his wife, Mary, were roughed up by Democrats during the 2004 event. Bunning then swore that he would never attend the event again. But Bunning – in tow with US Senate Minority Leader Mitch McConnell (R-KY) – was there this year campaigning for the Louisville Republican’s re-election. Bunning’s wife was also there.
“I can understand why Bunning would do that,” said McConnell’s opponent, Democrat Bruce Lunsford, according to a story by The Cincinnati Enquirer’s Patrick Crowley posted on Aug. 2 at the newspaper’s nky.com. “As Mitch McConnell’s people say, Bunning couldn’t win (his Senate seat) without McConnell. So now maybe Bunning thinks” that McConnell can’t win without his help. Lunsford, a multi-millionaire Louisville businessman, was referring to McConnell’s 24-7 blitz for Bunning during the last week prior to the 2004 election that enabled Bunning to barely beat back Lt. Gov. Daniel Mongiardo’s fast-closing campaign by about 1.5%.
Reporters’ stories about the event stressed that McConnell will be the sole issue in the upcoming Senate campaign – that he has been good for Kentucky or that he has helped Pres. George Bush to drag the national economy down. Sec. of State Trey Grayson, of Richwood in Boone County, told a GOP gathering on the picnic’s eve that McConnell has repeatedly “delivered for Kentucky” by bringing in funding for projects (a/k/a “pork”), according to an Aug. 2 story by The Herald-Leader’s Ryan Alessi and Jack Brammer.
“Ladies and gentlemen, if Mitch McConnell tells you he’s not for sale, for once you can believe him, because clearly he’s already been bought and paid for,” state Treasurer Todd Hollenbach of Louisville told the Aug. 1 crowd at the Marshall County Democratic Bean Supper, according to the story by Alessi and Brammer.
The Fancy Farm speeches by McConnell and Lunsford did not break any new ground. McConnell, a four-term incumbent, mainly criticized US Barack Obama (D-IL), the presumptive Democratic presidential nominee, and let Bunning attack Lunsford, 60, for being responsible for high gasoline prices in Kentucky – a theme that McConnell has used in three TV ad’s so far. Lunsford’s speech was essentially a counter-attack assigning blame to McConnell, 66, for high gasoline prices – also a continuation of the message in Lunsford TV ad’s currently running.
Bunning apparently had a lot of pent-up demand to speak when it was his turn at the Fancy Farm podium, because he ran over his allotted time to such an extent that the band struck up a tune called “Foggy Mountain Breakdown” to drown him out, according to a story by Brammer that was posted on Aug. 2 at The Herald-Leader’s Kentucky.com. The master of ceremonies – state House Majority Leader Rocky Adkins (D-Sandy Hook) – then remarked, “Let’s give the band another hand.”
Beshear was the lead-off speaker at Fancy Farm. The Associated Press’ Bruce Schreiner reported a story posted on Aug. 2 at Kentucky.com that Beshear had a comment about Bunning’s reversal of his 2004 pledge never to return to Fancy Farm. “I think I had something to do with it,” Beshear said. “Because I called his office and offered to call out the National Guard to protect him down here if he really needed it.”
Crowley reported on Aug. 3 that Bunning, of Southgate in Campbell County, said that he was committed to running for re-election in 2010. Bunning will be 79 in November that year. His 2004 re-election almost ended in disaster, but he edged Mongiardo by about 23,000 votes out of over 1,724,000 votes cast. Bunning even had a closer race when he just barely squeezed past then-US Rep. Scotty Baesler (D-KY6) by about 6,700 votes in his 1998 election to the Senate after having served six terms in the US House.
“I will try to be at about a half a million by the end of the year,” said Bunning, whose campaign fund has $176,259 on hand as of last month, according to Alessi’s story posted on Aug. 2 at polwatchers.typepad.com. “Of course I haven’t raised any money in Kentucky. I stayed out of Kentucky and raised a few bucks up in Washington.” Bunning said that he will begin fund-raising in Kentucky when McConnell’s race is finished. Alessi reported that Mongiardo said that it was too early to discuss whether he will run in 2010 again against Bunning.
According to press reports, the speeches by McConnell, Lunsford, Bunning, and Beshear were not among the most memorable in Fancy Farm’s long history. Although the actual picnic is a fund-raiser for the 600-family parish, in the early years state-wide politicians – mostly Democrats campaigning in heavily Democratic far western Kentucky – would attend as one of their last campaign stops before the state’s then-early August primary election was held. But the Fancy Farm “political speaking” on the first Saturday in August was so traditionally entrenched that, even after the primary was moved to late May around 1940, it has continued to this day, and is even a bigger spectacle than old-timers could have ever imagined.
At first, speakers just got up on a wagon to address the crowd who had come by horseback, wagon, or had just walked from their homes. Over time a rickety stage was erected with a cramped little seating area for the main speakers under a small cover for shade. Over time a few bleachers were placed out in front of the stage on a grassy area that was mud-filled if during a raining season. Now, a spacious, covered stage for speakers to wait their turns to speak rises high above a large open-air seating area on a concrete pad under a covered roof.
In a move signaling a more active interest by national Democratic Party leaders, Lunsford has named Michael Donilon as his new media consultant. Donilon was US Sen. John Kerry’s (D-MA) overall media consultant during Kerry’s failed attempt four years ago to wrest the White House from Pres. George Bush. Though that was a loss, Donilon is highly thought of by the Democratic Senatorial Campaign Committee (“DSCC”) and its chairman, US Sen. Chuck Schumer (D-NY).
“We just wanted to bring in someone with a fresh perspective,” Lunsford spokesman Cary Stemle said, according to an Aug. 6 story by The Courier-Journal’s Joseph Gerth.
“This has always been one of the top races in the country,” said DSCC spokesman Matthew Miller, according to Gerth’s story. “I know McConnell for months has tried to poor-mouth this race and pretend that he doesn’t have anything to worry about, but the truth is he does and he’s shown that by starting TV ads in December and launching negative ads this month.” McConnell’s campaign had no comment about Lunsford’s move.
The Cincinnati TV market has so far run the fifth highest number (2,724) of TV ad’s by both Obama and the GOP nominee-in-waiting, US Sen. John McCain (R-AZ), of all US TV markets, according to a story by The Cincinnati Enquirer’s Howard Wilkinson posted on July 30 at Cincinnati.com. Wilkinson’s source was the University of Wisconsin Advertising Project which has tracked about 100,000 ad’s nation-wide since the end of the primary season on June 3 through July 26. Only the markets in Philadelphia, Detroit, Cleveland, and Grand Rapids have seen more ad’s. Only Pennsylvanians have seen more ad’s than Buckeye State residents, too. The average of seven major polls indicates that Obama has a slight 2% lead over McCain in Ohio, well within all the polls’ margins for error. Thus, Ohio is destined again to remain in the cross-hairs of both campaigns.
The projected ribbon-cutting of a new Louisville arena to open the 2010 UofL men’s basketball season is getting more unlikely by the week. “We’ve got about two months of what I call wiggle room here to keep us on schedule so we won’t miss our deadline,” was the way Arena Authority Chairman Jim Host summed up the situation, according to a July 25 story by Green. Host’s comment followed news that Moody’s Investors Service had just put the authority’s latest bond insurer on its “watch list” – a precursor to a downgrade that would add about $60 million to the total debt payback on a bond issue which previously was calculated at about $600 million on a projected $360 million bond issue. The actual construction cost of the project is now estimated at $249 million. The UofL men’s basketball program would be the “anchor tenant” of the facility.
Bermuda-based Assured Guaranty was the authority’s second bond insurer to hit a financial snag with Ambac Financial Group already nixed earlier in the year by the authority after Ambac’s downgrade by Moody’s. Investors will insist on a much higher rate of interest if they are willing to buy uninsured bonds, and the Louisville Metro government – and that means we Louisville taxpayers – is ultimately on the hook to pay the bondholders if arena revenue on its own doesn’t meet the bond payments. The arena authority’s principal consultant said that at least 120 events per year – including about 20 UofL home games – would be necessary to make the facility’s revenue stream adequate to pay its expenses and pay off the bondholders. Critics question whether that many events could be scheduled each year on a long-term basis.
Judy Wesalo Temel, director of credit research at Samson Capital Advisors, said that this is the first time in years that she has seen so many uninsured municipal bond issues, according to a July 31 story (reporter unknown) in The Courier-Journal’s business section. Wesel said that “investors need to be more careful. You really need to look at the tax and revenue sources of these issuers.” Tesel said that tax shortfalls are another worry as local governments grapple with the weakening economy.
Instead of a bond issue, an alternative being explored is a loan from a consortium of banks. Such a loan would carry a far higher interest rate than bonds thus spiking the overall cost of the project to ever greater heights from the $660 million now estimated for an uninsured bond issue. The arena authority will meet on Aug. 18 to possibly review such an alternative funding plan.
Work has already begun on the site along the Ohio River in downtown Louisville to remove existing buildings purchased with a $75 million state grant appropriated during the administration of Fletcher, who intended to make the projected 2010 ribbon-cutting in the state’s largest urban area the defining, signature accomplishment of his administration.
– Governor Steve Beshear has appointed the Honorable Ernesto Scorsone to the office of Circuit Judge for the 22nd Judicial District, Division 7.
Scorsone is currently a Kentucky state senator representing the 13th district in Fayette County. He received his Juris Doctorate from the University of Kentucky College of Law. This appointment shall serve until the general election on Nov. 4, 2008.
Rep. Kathy Stein of Lexington was selected by the Democratic Party to run for Scorsone's Senate seat in November. And the party chose the Rev. Kelly Flood, of the Unitarian Universalist Church of Lexington, to replace her on the ballot for her House seat. Republicans have chosen Chuck Ellinger II to run for the Senate seat but have not selected a candidate for the House seat.
Governor Steve Beshear Friday August 8th, appointed Daniel J. Venters to the Supreme Court vacancy created by the retirement of Chief Justice Joseph Lambert. Venters, a Republican. under rules put into place by former Chief Justice Lambert Venters will not be eligible for a salary and judicial retirements benefits
His official swearing in will be held on Sept. 8th.
Daniel J. Venters is a former Circuit Court and District Court judge who practices law as an attorney in Somerset, focusing on civil litigation. His areas of practice include real estate, contracts, insurance and probate. He has also represented clients in criminal and family law cases. He was a judge for the 28th Judicial Circuit, which consists of Lincoln, Pulaski and Rockcastle counties, from 1984 to 2003. From 1979 to 1984, he served as a judge for the 28th Judicial District, which consists of Pulaski and Rockcastle counties. He served as assistant commonwealth’s attorney for Lincoln, Pulaski and Rockcastle counties from 1975 to 1979. He was admitted to practice by the Kentucky Bar in 1975, the U.S. District Court – Eastern District – in 1977, the U.S. Supreme Court in 2001 and the U.S. District Court – Western District – in 2004. He earned his juris doctor from the University of Kentucky College of Law, graduating in 1975. He has a bachelor’s degree from The Ohio State University
Aug. 3 – The Courier-Journal: “The belt tightens”
“…The state is trapped in a revenue shortage made worse by the General Assembly’s refusal to expand gaming or to raise cigarette taxes.
“Just consider this headline: ‘Almost 1,000 school jobs cut – State’s districts have dim outlook.’
“It’s just the latest in a series of alarms that have been sounded since the miserable 2008 legislative session came to a not-so-merciful close, but it may be the most depressing.
“What Senate President David Williams dismisses as a little ‘belt-tightening’ has resulted in personnel and program cuts at state mental health agencies, in prosecutors' and public defenders’ offices – in truth, across state government. Public colleges and universities have tried to make up some of the difference by imposing tax increase – big new tuition hikes – on students and their families.
“But perhaps the most sickening upshot of the legislature’s cowardice and calculation is the damage done in school district after school district, with worse to come next year. A new survey by the Kentucky School Boards Association in 138 of the state’s 174 districts found that 89 have cut about 450 certified positions and 520 classified jobs….”
Aug. 3 – The Herald-Leader: “Welcome back to less, kids”
“Kentucky has fewer teachers than a year ago. Massachusetts has fewer smokers.
“Why, you ask, would these two items show up in the same thought?
“Here’s why: The legislature in Massachusetts is driving the decline in smoking by, among other things, raising the cigarette tax.
“The legislature in Kentucky is driving the decline in the education work force by not raising the cigarette tax.
“As Kentucky students return to school this month, they’ll feel the effects of $43 million in cuts.
“Adjusted for inflation, the state’s funding of K-12 education will decline by $172 million this fiscal year and $171 million the next, according to the Council for Better Education, an organization of Kentucky superintendents.
“School districts report that they have eliminated almost 1,000 jobs, including 450 teachers, counselors and administrators.
“The number of lost jobs will rise as more districts report, says the Kentucky School Boards Association, which is collecting the data….”
Aug. 2 – WHAS-TV’s Mark Hebert at whas11.com: “Fancy Farm First Impressions – Boring!!!! Beshear Best Speech”
“…All in all, the most boring election year Fancy Farm Picnic I’ve attended. One political consultant said it right.....everybody is trying so hard just to get through it without any mistakes and without saying something that’s not politically correct, that the speeches and antics aren’t any fun.”
Aug. 5 – John David Dyche in The Courier-Journal: “Beshear’s course improving”
“…Beshear, whose early missteps have been much and scathingly maligned, is making appropriate course corrections. Naming Adam Edelen chief of staff was a steady first step toward political recovery.
“Edelen, 33, is a partisan Democrat, but no liberal ideologue. This results-oriented pragmatist with a business background was politically weaned in Paul Patton's effective and increasingly admired administration…
“Something big may soon be in store for the Transportation Cabinet, too. A federal investigation of past cabinet contracting practices is apparently focusing on leaks of internal cost estimates to potential bidders. High-profile indictments could give Beshear a mandate for reforms more dramatic than would otherwise be possible.
“Beshear is being proactive to prevent potential crisis in Kentucky’s signature industry. He reconstituted Kentucky’s Horse Racing Commission and created a task force to study the industry’s economic soundness, its drug testing effectiveness and the adequacy of state regulation. Beshear wants specific recommendations by December, including on ‘the need and opportunity for alternative forms of gambling.’…
“Bolstered by positive feedback during his ‘listening tour,’ Beshear will surely try again to raise the cigarette tax. Resulting revenues, along with funds from racetrack slots, could let him at least contemplate restoring some budget cuts and expanding early childhood education. The latter beckons as Beshear’s potential legacy issue….”
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