Kentucky editorial roundup
Summary of recent Kentucky newspaper editorials:
Lexington Herald-Leader on competition in alcohol sales:
A liquor license is a valuable possession in some parts of Kentucky. But should it be?
That’s one question raised by Senate Bill 110, which, like many wet-dry elections, is uniting preachers and package store owners.
The preachers fear that lifting population-based limits and allowing the free market to determine the number of bars and package stores in a locale, as the Bevin administration proposes, would drive up alcohol abuse.
The package store owners want to protect their turf and fear that new competition would drive down their profits or maybe drive them out of business. Some owners see their liquor license as their retirement plan. But if the state lifts the caps, the license would lose its value as an asset that can be sold and resold.
For consumers, increased competition would lower prices and provide greater choice. That’s reason enough to defeat SB 110, which would preserve monopolies enjoyed by some license-holders by saving the population-based caps.
It’s true that under deregulation some “mom and pop” businesses would lose out to high-volume chains. At the same time, new opportunities for entrepreneurship, leisure and tourism would open as more venues (spas, galleries, boutiques, museums, “paint and sip” art studios) gained licenses to sell adult beverages.
SB 110, sponsored by Senate President Pro Tem Jimmy Higdon, R-Lebanon, would halt the deregulation initiated in December by the Alcohol Beverage Control Board and put into law the population ratios that were set by regulation decades ago: 1 package store license for every 2,300 residents and 1 license to sell drinks for every 2,500 residents. Cities can petition to lower the ratio to 1 license for every 1,500 residents but the process is cumbersome.
To relieve an acute shortage of available liquor licenses in Northern Kentucky, Higdon supports a proposal by Sen. Wil Schroder, R-Wilder, that would allow counties with more than 85,000 population to petition the state to allow 1 license for every 1,000 residents.
Now, if, say, you wanted to open a bourbon bar in Covington — to capitalize on the B Trail, the Bourbon Trail’s new northern extension — you would have to wait for 23 licenses to be revoked or surrendered. Or you’d have to buy a license from someone who already has one. The wait for a license in Campbell County (Alexandria and Newport) is even longer.
The transfer of a liquor license must be approved by the state, but such sales are privately negotiated and are not public record, so the going rate is unknown. But knowledgeable people say it would be in the tens of thousands of dollars, or more.
Bowling Green has no available drinks licenses. Neither do Maysville, Morehead, Corbin or Grayson. No package store licenses are available in Corbin, Mayfield, Russell, Radcliff, Barbourville, London, Somerset, among others.
Statewide, though, there is a surplus of licenses available for both package stores and drinks. That should ease worries about a proliferation of alcohol outlets. Competition may well reduce the number. Also, the state puts no population-based caps on beer or any of the many other alcohol licenses (restaurants, convention centers, microbreweries, transporters, etc.), and that doesn’t seem to be causing problems.
Kentucky’s licensing regime protects license holders, not the public, and blocks competition and enterprise. Only 17 states have population-based caps. Kentucky should make it 16.
Bowling Green Daily News on losing local commercial air service:
We were excited in 2016 when it was announced that commercial air service was coming to Bowling Green.
We, along with airport and elected officials, advocated for a local commercial option in the 40 years since the last commercial flight flew out of here. It would be great for southcentral Kentucky to have a steady commercial air-travel presence - mainly as a matter of convenience, but also because it means more money stays in our community, rather than going to Nashville or Louisville, where for decades many area residents have boarded commercial flights.
It was an exciting time when we learned that Tennessee-based Contour Airlines would offer service from here to Atlanta and to Destin, Florida. Many people initially used the flights to Atlanta to either visit the city or to use it as a hub to catch a connecting flight. Many others used the flights to Destin, a popular vacation destination for many of our residents.
We were hopeful that Contour would be successful here. The ticket prices were certainly appealing to prospective flyers. Then we learned last year that Contour was canceling its flights to Atlanta after just three months because not enough tickets were being sold to make the service economically feasible. Then it was announced last year that Contour would only offer seasonal flights to Destin. The three weekly flights were offered from May to August last year, and a little more than 60 percent of the seats on the flights were sold - less than the 80 to 85 percent most airlines look for in terms of load capacity to break even. But passenger numbers increased as the summer progressed.
While it was disappointing that Contour cut its flights back, we were glad they were at least continuing the flights during the summer months. It looked like there was still hope for Contour to make it here with the Destin flights.
That hope faded away last week when we learned Contour would no longer offer flights to Destin and would no longer operate out of Bowling Green.
A large reason for Contour pulling out of our city was because its federal subsidies ran out, as did their fleet of aircraft for this size market. The flights were also not financially viable, with the local airport providing Contour subsidies for providing the service. Also, Contour was recently awarded contracts to provide some flights through the Essential Air Service program, in which the federal government subsidizes the cost of providing air service in smaller markets. As a result, Contour told local officials it did not have aircraft available to continue the Bowling Green flights.
Bowling Green Airport Manager Rob Barnett, who worked tirelessly for years to get a commercial service here and deserves a lot of credit for doing so, said Contour looked at downsizing from a 30-seat plane to 19 or nine seats, but they did not have available aircraft.
Bowling Green is not eligible for EAS subsidies because it is considered to be adequately served by the Nashville airport.
With the subsidies now gone, any airline coming to Bowling Green will have to operate on its own financially.
Unfortunately, this will make it a lot less appealing to airlines wanting to come here, but we hope that Barnett will find another passenger airline to come here. We know his quest could be a difficult one, however.
We do have a few things going for us to attract another passenger service, though. One advantage the airport has is that the infrastructure for commercial flights is already in place in terms of equipment and a terminal building. Barnett also said local officials have established a strong relationship with the Transportation Security Administration, which performs the federally mandated passenger screening for commercial flights. He said the TSA has agreed to staff the airport with screeners if commercial service returns.
We might be down at the moment for commercial air service, but we are not out. We were fortunate to have had Contour Airlines service our city for two years and hopefully in the near future we will have another airline come here to provide passenger service for our citizens.
The Daily Independent of Ashland on Kentucky’s pension crisis:
The harsh reality of the Kentucky pension crisis and the abject dysfunction of state government was laid bare this week in Frankfort.
Here’s what we know: the unfunded pension plan is $10s of billions in the hole. The governor’s initial recommendations, which held a good chance of at least beginning to make a dent in this problem, have been uniformly rejected. And, it is now clear the Kentucky Legislature does not have the courage to take the incredibly painful steps to fix this problem because its members are more worried about being re-elected.
So, it’s official. The can has been kicked.
The lack of leadership here is astonishing and will ultimately result in a world of pain for everyone involved when the pension system collapses under its own, unfunded weight. The public employees. The taxpayer. Local governments. The state of Kentucky — they will all suffer. What the Legislature will accomplish, if this legislation does make it through, is simply delay the reckoning.
Let us briefly revisit the events of last year. Gov. Matt Bevin wanted to hold a special session to fix this. Never happened. Other proposals from a consultant called for difficult steps ranging from freezing accrued benefits, conversion of new employees to a 401-k style defined contribution plan, and eliminating cost-of-living adjustments accrued from 1996 to 2012 to fix a staggering deficit. Not happening.
Instead, weeks-late legislation was quietly unveiled late on a Tuesday afternoon. It wasn’t until the following day that the sponsors eventually had a press conference. CNHI Kentucky’s Ronnie Ellis reports the proposed legislation does not force new employees into defined contribution or 401-K style plans. It would instead extend a 2013 change in the retirement system for state workers to newly hired teachers, moving them into what is called a hybrid-cash plan. The plan seeks to save $4.8 billion over 30 years during which time the state will make “level dollar” contributions to the systems and eventually eliminate the roughly $43 billion combined unfunded liability of the state’s various pension plans.
Teachers won’t be required to contribute 3 percent more of their salaries for health care for retired teachers (between time of retirement and age 65 when they become eligible for Medicare). Retired teachers would see their annual cost-of-living-adjustment shrink from 1.5 percent to 0.75 percent for 12 years. Legislators said costs of health care will be dealt with in the budget, but of course no specifics are offered.
Ellis reported a significant change is for all future hires they will not be covered by the so-called “inviolable contract,” guaranteeing their benefits in statute. Look for this to be watered down or eliminated as the legislation moves forward. And, instead of coming up with new revenues or more cuts, we are told local governments’ increased contributions would be “phased in” and contributions wouldn’t grow by more than 10 percent each year at least through June 30, 2020.
Translation — put your boots on. There’s a can to be kicked.
All of this avoids true solutions. We’ve said it before — the state has to meet its promises to its employees while forever fixing a public compensation program that is not sustainable. The old way of compensating public employees does not work. This, in turn, requires new funding sources, drastic cuts, a dramatic new approach to compensation, or a combination of both.
None of those potential solutions are present here.
The state needs to think outside of the box. Allow casinos in to fund pensions? Let’s debate it. Legalize marijuana and tax it to raise the money to fix this quagmire? Let’s debate it.
Instead we stick our heads in the sand. When the plan collapses, remember the Legislature and governor’s failure of leadership in 2018, and remember the unwillingness of anyone to do anything but look out for themselves.