Kentucky editorial roundup
Summary of recent Kentucky newspaper editorials:
Lexington Herald-Leader on state House Republicans questioning pension overhaul:
Lawmakers balking at the idea of moving Kentucky’s public employees into individual retirement accounts have a solid reason for their reluctance: The change would cost taxpayers more, and the outcomes would be worse.
Bravo then to the House Republicans who are raising smart questions rather than bowing to pressure from the deep-pocketed donors and a D.C. lobbyist who waded into the pension debate last week with an ill-informed email.
Paying more for less is a bad deal anytime, but especially when it also would leave retirees poorer and make it harder for Kentucky to compete for teachers, firefighters, police and other public employees.
As this legislative session hits mid-point, we have to assume that no pension overhaul bill has been unveiled because it’s difficult, if not impossible, to make the numbers work on anything resembling what Gov. Matt Bevin and the authors of last week’s email say they want.
It’s telling that Bevin is fighting to keep the cost of the plan he touted last fall secret by bottling up an actuarial analysis.
The governor was unable to suppress an analysis of the effects on the Teachers Retirement System, however. It showed that shifting teachers from a defined benefits to a defined contribution plan would cost an extra $4.4 billion over the next 20 years. Among the costs are hefty transition expenses and a loss of liquidity from new employees entering the system. Without that liquidity, the fund would lose the ability to diversify its investments.
Consulting firm Cavanaugh McDonald figured that Bevin’s proposed changes would leave TRS 71.3 percent funded in 2038, a deficit of $11 billion. The firm calculated that if the state retains the current system and makes its required contributions each year, TRS would be 80.6 percent funded in 2038, with a deficit of $9.6 billion.
Even figures presented by PFM Group Consulting, which the state has paid $1.25 million to advise the administration, reveal the costs of changing to individual accounts would be higher than sticking with the current system. Now state and local employees (but not teachers) hired after 2013 go into a cash-balance plan that reduced employer risk by combining individual accounts and traditional pensions.
An analysis by the Kentucky Center for Economic Policy also explains that Bevin’s plan would raise costs because teachers, who do not receive Social Security, and their employers would have to start paying into Social Security. But, no sweat, said PFM, just push the new costs onto school districts. Fortunately, lawmakers understand that few districts could afford the new burden, especially since some already are in danger of bankruptcy.
No doubt an analysis completed in November for the Kentucky Retirement Systems also showed a high cost from switching to individual retirement accounts. A coalition of public employees and retirees sought release of that analysis under the Open Records Act. On Feb. 8, the attorney general’s office ruled that the analysis is in its final form and should be available to the public. No word yet on whether Bevin will go to court to keep the cost of his plan secret.
None of the smart questions being raised by lawmakers were addressed in the email they received last week calling for moving all future employees into a defined contribution system. Organized by the Pegasus Institute, a conservative think tank in Louisville, the missive had 19 signatures, including prominent Kentucky Republicans, business execs, former state Chamber of Commerce chairman Bill Lear and anti-tax lobbyist Grover Norquist.
The email blames the pension crisis on “inherent structural problems.” In fact, governors and lawmakers created the crisis by shortchanging the pension funds.
Rep. John “Bam” Carney, R-Campbellsvile, is right when he suggests the solution is to “stay with defined benefits and fully fund them.”
The Daily Independent of Ashland on an investigation over an email former U.S. congressman Carroll Hubbard sent:
Carroll Hubbard, a disgraced former U.S. congressman from Western Kentucky who grew up in Ashland, is back in the news for a harassing communications investigation.
In what was originally an anonymous letter sent to another attorney, the former Congressman called the attorney and her spouse “pitifull (sic) fat, ugly lesbians.”
Retired Kentucky Supreme Court Justice Bill Graves of Paducah told the Courier-Journal in Louisville last week that while Hubbard’s recent conduct does not sound “wholesome” or “professional,” he may have had a First Amendment right to send the letter.
A person is guilty of harassing communications in Kentucky when, with intent to “intimidate, harass, annoy, or alarm,” he communicates with a person “anonymously or otherwise . in a manner which causes annoyance or alarm and serves no purpose of legitimate communication.” The crime is a misdemeanor punishable by a maximum fine of $250 and up to 90 days in jail.
Whether Hubbard’s inflammatory letter to his opposing attorney leads to formal charges against the 80-year-old former congressman and gubernatorial candidate remains to be seen, but it is another blemish on the record of the former nine-term U.S. Representative who was one of the early favorites for the 1979 Democratic nomination for governor before he tripped over his ego and misdeeds.
Since then it has been mostly downhill for Hubbard, who spent much of his childhood in Ashland. He pleaded guilty in 1994 to charges stemming from an investigation into a House banking scandal. He admitted he obstructed justice by staging a burglary of his district office to make it appear his campaign and House bank records had been stolen, and that he misappropriated more than $50,000 in campaign money for illegal use. He also admitted ordering his congressional staff to perform personal and political tasks for him while they were being paid by the government.
Hubbard was disbarred following his guilty pleas. In 2001, the Kentucky Bar Association’s board of governors voted 16-0 against reinstating Hubbard to practice but the Kentucky Supreme Court found he was of “good moral character” and voted unanimously to return his law license.
Hubbard is back in the news after being accused of sending an anonymous letter to another Paducah attorney, Alisha Kay Bobo, his opponent in a heated family law case. The letter included photos of Bobo and her same-sex spouse at a fundraising event and described them in disparaging terms.
When Bobo on Jan. 31 asked in court if his handwriting was on the letter, Hubbard initially said no. When reminded he was under oath, he refused to answer. He eventually cited his Fifth Amendment right not to incriminate himself after Family Court Judge Deanna Wise Henschel reminded him of that constitutional right.
Bobo told Courier Journal the mailing was “appalling” — especially coming from an attorney.
Except for Hubbard’s past ties with this community, this story would attract little interest in this part of Kentucky. It is just another example of how pride, prejudice and arrogance continue to cause a once respected and somewhat effective member of the U.S. House of Representatives to fall from grace. How disappointing that is for those of us who once thought Carroll Hubbard showed great promise — promise that was never fulfilled.
The State Journal of Frankfort on how lobbying impacts local economy:
Paid to push policy initiatives for their clients, lobbyists receive deserved scrutiny for their relationships with lawmakers.
While some lobbyists at the national and state levels push for policies that are benign or beneficial to Kentuckians, others advocate for and are successful in pushing ideas that do the opposite.
However, here in the state’s capital, lobbying is a part of the web of state government-related activities that contribute to Frankfort’s economy.
That web includes people such as Frankfort Mayor Bill May, who is a registered lobbyist. The executive director of the Kentucky County Clerks Association, May is listed as the organization’s lobbyist on the Kentucky Legislative Ethics Commission’s website.
In Monday’s State Journal, reporter Alfred Miller wrote that lobbying resulted in nearly $200,000 in meal receipts, close to $230,000 in advertising and roughly $690,000 on “expenses related to lobbying activities.” Through taxes, some of that money is passed on to local governments.
But that’s not all. If we’re truly trying to measure the effect of lobbying on our economy, we must consider total compensation, too. A Legislative Ethics Commission report shows private companies, nonprofits and other associations spent a combined $18.8 million on “legislative agent compensation” — in other words, paying lobbyists.
Compared to two decades ago, that’s a significant chunk of change. In 1998, for example, total “legislative agent compensation” paid to lobbyists was just $7 million, according to the Legislative Ethics Commission. By 2008, it had more than doubled to $14.7 million.
In cases where lobbyists list Frankfort as their primary place of business, local government benefits through payroll taxes. Local governments likely don’t see the full benefit of $18.8 million in payroll taxes, but the city and county government collect taxes on a portion of that pay. “Legislative agent compensation” is another way that lobbying affects our local economy.
The range of businesses paying lobbyists in Kentucky includes large banks such as J.P. Morgan Chase, large companies such as Duke Energy and Ford Motor Co., colleges, teachers’ organizations and trade groups such as the Kentucky Distillers’ Association.
Lobbyists aren’t inherently bad. While Kentuckians and the general American public should be concerned about or at least aware of the degree to which money from corporations and their lobbyists influences politics, for Frankfort residents, it’s a double-edged sword. It poses the potential to result in laws that will hurt average Kentuckians but also results in important spending at local establishments.