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Celebration or consternation?

The Kentucky Budget

By: Jim Waters

Kentucky’s political leaders are close to throwing their shoulders out of joint while vigorously patting themselves on the back … for passing a budget.

Yet this remains the primary task required of legislators by the Kentucky Constitution. After more than a year of political wrangling combined with abandoning sound fiscal principles, should passing a budget be cause for celebration? Hardly.

We’ve heard comedian Chris Rock compare such bragging to a law-abiding citizen wanting to be congratulated for staying out of jail. “That’s what he’s supposed to do, isn’t he?” Chris would howl.

The big-spending politicians protest by pointing to the overwhelming consensus in favor of this bill. “Doesn’t that count for something?” they clamor.

After such self-righteous agitation, one might think they were setting up taxpayers for a pay raise.

Alas, an eleventh-hour, smoky back-room decision by Frankfort politicians confirmed our suspicion. Leadership in both chambers emerged with a provision that granted themselves a healthy increase in their retirement benefits.

The expanded contributions to their pension plan will cost taxpayers $465,000 more per year and result in an increase of up to 80 percent in retirement benefits for legislators.

Gov. Ernie Fletcher characterizes the 2005 General Assembly as an “unprecedented” session. The characterization is right in that the session produced an “unprecedented” increase in spending.

This year’s final spending plan offers taxpayers little cause for celebration and plenty of reason for consternation.

Taxpayers are stuck with $2.1 billion in special projects – more than double the previous biennium record. Lawmakers say this mammoth increase in spending is needed to make up for projects delayed in last year’s legislative session that ended without a budget.

In fact, this year’s legislative session turned into a love fest rather than a repeat of the barnyard brawls that have characterized recent legislative sessions. Why? Because there was enough pork produced so all legislators could feast at the trough!

This spending plan also ensures that next year’s budget discussions will begin with the need to address a nearly $400 million deficit. This will not be a cause for celebration among Kentucky’s taxpayers.

What’s all this overspending about?

Too many legislators mistakenly believe that folks back home grade their performance by the quantity of pork deposited throughout their districts. Instead, most constituents want to spend their own money on their own projects.

They want Frankfort to engage in a budgetary process that places taxpayers first, and makes secondary the voracious spending appetites of lobbyists, special interests and legislators. Now is the time to enlist such a process.

In our budgetary handbook, “Planning for Kentucky’s Future,” the Bluegrass Institute offers a number of reasonable approaches toward creating taxpayer-friendly state budgets. In it, co-author Geoffrey Segal of the Reason Foundation recommends that lawmakers stop soliciting credit for bringing home the bacon.

“As long as we give credit to legislators who secure taxpayer dollars for their districts, incentives will remain for involving Washington (or Frankfort) in many activities that belong in the private sector or with local governments,” Segal writes.

The 2005 General Assembly bypassed several significant opportunities to deliver services using private means that have traditionally been inefficiently operated by Frankfort.

For example, Gov. Fletcher abandoned his plan to privatize a new $92 million prison in Elliott County. Raucous union bosses and their hired hands successfully conducted a withering campaign to hire merit-system employees at a much higher cost than that of a private-prison contractor.

Legislators also surrendered by eliminating a budget proposal that would have funded a study on privatizing government functions. Is this cause for celebration? Only for union bosses and their political pals in Frankfort who stand to lose if more government services are outsourced.

Other states are succeeding in their efforts to improve services, save money and deliver high levels of constituent satisfaction. The best ones establish a results-based department that specializes in outsourcing operations and management of services ranging from golf courses to prisons to parks.

Opponents know about these successes yet resort to political pandering to halt the momentum towards the results-based government that now is progressing in such states as Florida, South Carolina and California.

The governor is right. Decisions by the 2005 General Assembly were “unprecedented.” But upon reflection, the session was unparalleled primarily in indulging those hooked on government spending.

The new budget confirms once again that those addicted to spending taxpayers’ dollars will go to almost any length to support their habit – including making the best interests of taxpayers a low priority.

-– Jim Waters is Director of Policy and Communications for the Bluegrass Institute (www.bippps.org), Kentucky’s free-market think tank.

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