Frankfort politicians heaped more than $1 billion in new debt on Kentuckians in the fiscal year that ended June 30.
That’s according to data buried deep in a new report issued today by the Beshear administration’s Office of Financial Management. The OFM (the same people who last week pulled down the only site clearly displaying debt statistics) probably isn’t going to send out a press release with this information.
The Beshear administration is still reporting a $157 million budget surplus for the fiscal year and his Republican opponent, Senate President David Williams, hasn’t mentioned the discrepancy.
Kentucky state legislators have pre-filed two bills for 2012 so far to make felons of people who have “knowledge” of a dead body but don’t report it. That’s two more bills than have been filed to address a real Kentucky problem like our state debt.
But compared to the impossibility of proving someone was aware of a fatality, demonstrating that state officials know about our debt situation is a snap. For people who like to hear themselves talk as much our our politicians do, their silence on the debt issue is all the evidence we need.
If state politicians have any plans to do anything about our mounting debt, the need to start telling us about it now.
Last week we noticed Gov. Steve Beshear’s administration pulled down the link to the only web site in state government clearly tracking at least some version of Kentucky’s state government accumulated debt.
All politicians talk about government transparency these days. So why doesn’t Beshear want you to know how high Kentucky’s public debt has grown and why isn’t his opponent making a big deal out of it?
A Kentucky Knows Best email yesterday about the poorly written state law being used against Attorney General candidate Todd P’Pool stirred up some interesting information.
Republican Todd P’Pool is being hounded by Jack Conway using a law Governor Steve Beshear wrote thirty seven years ago and that the Kentucky Supreme Court found unconstitutional ten years ago.
Now is a great time to go through Kentucky’s campaign finance laws to justify what we can (which won’t be much) and throw out the rest.
Thanks to Marcus Carey for the heads up on the Supreme Court case.
We keep talking about how we need common sense answers to political problems. Here is one.
Kentucky Auditor candidate John Kemper proposed a solution today to the state’s immediate need to make a $28 million interest payment to the federal government and avoid the loss of $640 million in tax credits by Kentucky businesses related to unemployment insurance loans.
“Governor Beshear should go ahead and pay the money out of the rainy day fund on September 30 when it is due,” Kemper said. “Frankfort is gridlocked trying to score political points over this, while Kentucky taxpayers twist in the wind. We can’t afford to play these games. An independent auditor would tell them to get on past this as efficiently as possible, so that’s what I’m doing.”
John is right. You will hear more about this over the next few weeks as the players in Frankfort jockey for position, calling for a special session or trying to figure out a way to delay this interest payment. Other states have already taken the tax hit for putting off the inevitable payment. And the last thing we need is another expensive special legislative session to fix a problem that can be solved with the stroke of a pen. Technically, someone could file suit against Gov. Beshear for paying this money out of the state rainy day fund, but the alternatives are all worse. I say let them threaten to sue. Even with a lawsuit, this is the cheapest option and we have other fish to fry.
In six weeks, Kentucky’s Finance and Administration Cabinet is required by law to report how much extra debt the state had accumulated by June 30.
You won’t find that information reported in the media and you won’t find it on the appropriate state site that hasn’t been updated in more than three years.
In contrast, state government started talking up having a budget surplus for the fiscal year ending June 30 at the beginning of May. Breathless news reports speculated how large the surplus might be for three months before breathlessly reporting at the end of July the official number: a $156 million surplus for the year.
We can speculate without any fear of contradiction that the state increased its debt by several times that amount during the fiscal year to finance regular, ongoing government functions.
But we can’t prove it till the end of September. And, even then, we will have to dig to find the information. And the media won’t report on it at all.
And leaders of both major political parties in Frankfort will ignore the true measurement of our fiscal health because claiming credit for coming together and “balancing” budgets is a bipartisan game.
The idea of proudly claiming solvency because you have money in your checking account while running up a much larger credit card balance would only be entertaining to people who enjoy playing hide-and-seek all by themselves.
The people who run Red Buck Cigars, manufacturers of filtered cigars in Russell Springs, Kentucky must be able to smell the desperation coming out of Frankfort.
Early in 2009, Congress more than doubled federal cigarette taxes to pay for children’s health care and Kentucky’s bipartisan legislature doubled up their own tax to help cover yet another revenue shortfall. The then-Democratic Congress didn’t think twice about the consequences of funding excessive spending with the diminishing returns of a cigarette tax increase. Most Frankfort politicians didn’t either.
“Sin” taxes are usually easy to pass because they directly hit relatively small constituencies. But fiscal conservatives should stand strong against the coming effort to increase the size of government by creating a new law to wipe out the competitive advantage of a Kentucky manufacturer operating within the law. Put simply, it’s more important than just stopping a tobacco processor from exploiting a loophole in tax law; this is about the power we allow government to have in our lives.
We need less government regulation, not more. We need fewer schemes designed to fund wasteful government. And if we don’t start now, protecting a product we may not like from the nanny staters and big taxers, when are we going to start?
Please tell your representatives we won’t accept more tax increases of any kind and that the solution to their revenue problem is to cut spending and to reduce the size and scope of government.
Kentucky Knows Best
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