Kentucky has yet to tackle its biggest issues
Governing magazine describes itself as “the nation’s leading media platform covering politics, policy and management for state and local government leaders.” It claims “the most credible and authoritative voice” in the field and to provide “nonpartisan news, insight and analysis.”
Earlier this year, Governing listed “10 big issues states will look to tackle in 2014.” Most of these issues still confront Kentucky at year end, but do not expect much meaningful movement on them in the upcoming 2015 short session of the General Assembly.
Not surprisingly, Medicaid tops the list. Much media and the public uncritically accept Gov. Steve Beshear’s claim that his expansion of Medicaid under Obamacare has been a big success, but specific facts supporting this boast are few.
Kentucky is among the states that bought into Obamacare’s expansion of Medicaid to adults earning up to 138 percent of the federal poverty level. For the first three years, the federal government foots the bill for the added costs, but states then pick up a portion.
John Cheves of the Lexington Herald-Leader recently noted that Kentucky already “struggles to pay $1.3 billion a year for its 30 percent share of traditional Medicaid costs,” and “will have to dig even deeper as Uncle Sam gets less generous.” When asked in July how much that would cost the commonwealth, state Medicaid Commissioner Lawrence Kissner confessed that he did not have even a guess.
There are other Medicaid issues, too, like whether it actually improves health outcomes, a provider shortage, payment problems, and coverage gaps. Kentucky is flying blind to a frightening extent as Medicaid voraciously sucks up state resources.
Income tax revision is second on Governing’s list. Former Lt. Gov. Jerry Abramson headed a big task force on this issue, but Beshear never got behind its recommendations.
Some say divided government, like Kentucky’s in which Democrats control the House and Republicans the Senate, is the best time to tackle tax reform since blame and credit can be shared. But the reality is that there will not be tax reform here until that inevitable day when Republicans control at least both legislative chambers and maybe the Governor’s Mansion, too.
Meanwhile, none of the declared gubernatorial candidates, Democrat Jack Conway or Republicans James Comer and Hal Heiner, has put forward a specific tax reform plan. Comer talks about “comprehensive tax reform” and Heiner touts taxing consumption instead of work. Perhaps they will provide details as their primary campaign progresses, but don’t ever expect anything substantive from Conway.
Governing puts minimum wage laws in third place. Democrats from President Obama down want to increase the minimum wage despite the job-killing effects of doing so, but Kentucky’s Senate Republicans will block that. Any action on this issue will be at the local level, as in Louisville where liberals on the local council are pursuing a wage hike that makes good symbolism, but will end up hurting those they profess to want to help.
Public pensions are next on the Governing list. Bloomberg recently ranked Kentucky as having the second most underfunded public pension plans of all states. The largest state plan is only 21 percent funded and apparently headed down to 15 percent. The total pension funding shortfall in the state systems is over $34 billion!
Legislators, including Comer’s running mate, Republican Sen. Christian McDaniel, pre-filed several pension bills. More transparency is essential, and Democrats want to issue bonds to supposedly shore up the teacher retirement fund, but some knowledgeable observers predict that either benefit cuts, a big tax increases, or both are ultimately inevitable.
Next on Governing’s list is immigration. Significantly, Conway, currently Kentucky’s attorney general, has not joined a suit by the attorneys general of 24 other states challenging Obama’ executive action effectively granting amnesty to several million illegal immigrants. One can only assume Conway supports Obama on this, as he does court-imposed gay marriage.
Governing says, “State and local governments are grappling with how to care for their neediest residents amid diminished federal aid.” This is perennially a big issue to some liberal legislators like Louisville representative Jim Wayne, but does not really register on the legislative radar screen. Economic jobs and growth is the best answer.
Higher education funding and reform follows on the Governing list. It is one thing to say that strengthening our state’s higher education system should be among our highest priorities, but quite another to say where more money for that should come from amid myriad competing needs.
State employee compensation comes next according to Governing. Kentucky’s two-year budget approved earlier this year gave state employees and teachers modest raises many thought overdue, but this issue will certainly arise again in 2016.
Transportation funding is also on thelist. In the upcoming General Assembly session this issue will again include proposals to permit public-private partnerships, or “P3s,” as an option for greater private participation and responsibility in major transportation projects. 33 states allow some P3s, but Beshear vetoed a P3s bill that passed in the last session citing an anti-tolling “poison pill.”
Regulating drones rounds out the Governing list. Privacy and safety concerns compete here. The General Assembly session will involve a lot of droning, but will probably not produce significant legislation on this issue.