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Election opens door for real change

By: Mr. Aaron L. Morris

The election is over. Yard signs are down and bumper stickers are disappearing. But the message sent by the vote totals is clear: Kentuckians want better results from Frankfort.

Our state continues to lag behind much of the rest of the nation with an unfair tax code, a broken-down budgeting process and a futile public education system. Kentucky’s future depends largely on the courage of our newly elected legislature in a few critical areas.

First, lawmakers must address the absence of a budget.

Kentucky’s founders clearly established that the primary responsibility of lawmakers was to pass a biennial budget. A few years ago, Frankfort politicians convinced voters to approve annual sessions for the General Assembly. Since that time, no budget has passed on time.

The lack of a spending plan threatens the balance of power between government’s three branches.

Without a budget, Gov. Ernie Fletcher runs the state with his own spending plan. But Kentucky’s founders placed the responsibility for the establishment of a budget instead squarely on the shoulders of the people’s representatives.

Policymakers should approve placing a constitutional amendment on the 2006 ballot that requires representatives to remain in session during budget sessions until a spending plan is passed. Any additional days spent in passing it should be at the expense of legislators, and not cost taxpayers another penny. Failing to pass a budget is a precedent that must end.

In addition, addressing Kentucky’s budget stalemate must be accompanied with an emphasis on tax reform. Kentucky languishes behind its neighbors largely because of a burdensome tax code that shuns new businesses, deters jobs that pay high incomes and repels new investment.

The next round of Tax Modernization should establish a system of taxation that will make Kentucky as economically competitive as the states that surround us.

Second, the recent special legislative session produced at best a band aid to deal with the hemorrhaging health care costs of government employees. The solution lies not with shifting these rising costs to Kentucky taxpayers, but rather with altering the incentives that will cause them to use their plan more efficiently.

State employees are not the only ones facing higher costs. Health costs continue to soar and choices are fewer for all Kentuckians because of the shortsightedness inherent in past policy decisions.

The 1994 General Assembly imposed restrictions on insurance companies’ ability to negotiate with health care providers. The controversial “Any Willing Provider” law produced an unsound public policy requiring all insurance companies to cover all high-risk operations and conduct business with all willing providers. Forty-five health insurance companies abandoned Kentucky within two years. Policymakers should remove these restrictions and invite insurers to return.

The legislature also should seriously consider allowing tax deductions for companies that provide employees with Health Savings Accounts (HSAs). Such a plan could provide the necessary impetus for the creation of new small businesses across the state.

A survey by the Center for Health Transformation indicates that small businesses have lowered their health care costs by as much as 44 percent by using HSAs. For instance, Horizon, Inc., a small nonprofit company in Washington State, saved 50 percent in its first year of using an HSA plan.

Third, parents deserve to see measurable improvements in the delivery system of public education in Kentucky.

Sixty percent of the state budget is spent on education. Yet test scores and graduation rates remain stagnant even as the number of high school graduates requiring remedial courses for entry into college rises further.

Even with such a dismal performance, Kentucky’s public education officials stubbornly resist changing the status quo. Their motto seems to be “Kentucky: Backward and looking forward to staying that way.” Kentucky parents deserve better.

Kentucky’s public schools suffer from a lack of competition.

A good place to begin would be to allow dissatisfied parents to transfer their children, along with public funding, to any public school either in or outside their school district, as long as parents bear the cost of transportation. Public education should first be about what is best for children, not teachers, the administration and the school buildings.

In this most recent election, Kentuckians showed they yearn for strong leadership and real change. Politicians who cannot think beyond the status quo will resist such a call. But honorable lawmakers who serve for the right reasons will rise to the challenge Who knows? They may even get hired again the next time voters go to the polls.

-- Aaron Morris is the fiscal policy analyst for the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank.
 

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