KyKurmudgeon

Sunday’s column:

For more than three hours Wednesday, Democrats and Republicans argued the pros and cons of a two-year state spending plan crafted by House Democratic leaders after they ditched Gov. Steve Beshear’s proposal.

When the verbal pyrotechnics fired off by 24 separate speakers finally ended as afternoon slid into evening, just one vote had switched sides from the previous week’s debate over House Bill 530, a revenue-generating measure promoted by Democrats as a means of helping fill an estimated $1.5 billion gap between projected revenue for the next biennium and current spending levels.

Rep. Will Coursey, a Western Kentucky Democrat who sided with Republicans in voting against the revenue measure, voted for the budget, House Bill 290, even though it also contained all of HB 530’s revenue-producing provisions.

Democratic leaders added them to HB 290 to ensure that Republicans couldn’t take credit for any of the goodies in the spending portion of the budget without also accepting blame for the nasty dose of revenue medicine that would pay for the goodies.

Not that such a ploy was absolutely necessary. All of HB 290’s pork … Oops! Make that all of HB 290’s “Kentucky Jobs for Kentucky Families” rewarded the districts of representatives who backed the revenue portion of the bill when it faced a stand-alone, up-and-down vote the previous week. The only Republican on that particular A List was Rep. Jim Stewart. So, the rest of the party’s House members had no goodies to gain by voting for the budget whether or not it included revenue provisions.

But back to those three-plus hours of sound and fury. They merit a couple of observations, the first of which comes in the form of friendly advice for lawmakers of both parties and both chambers.

In debates such as the one conducted Wednesday, lawmakers whose love of the limelight is such that they want to see themselves delivering a sound bite on the evening news or read their words in the next day’s papers need to jump into the fray early.

After an hour or so of listening to members of both parties cover, re-cover and re-re-cover the same territory, the cameras from the commercial TV stations start to dwindle and other media grunts start putting down their pens and turning off their recorders because they already have enough quotes to fill several editions of today’s downsized newspapers.

At that point, it takes something really novel to bring those pens, recorders and cameras back into use. Something along the lines of proposing that we let the state’s racetracks conduct cockfights between racing meets and tax the ensuing betting action.

Hey, this venerated Kentucky tradition that dates back to colonial days, according to House Speaker Greg Stumbo, easily ought to be good for generating $1.5 billion in new state revenue – maybe more.

Return to seriousness alert, semi-seriousness anyway.

If Wednesday’s three-plus hours of sound and fury didn’t exactly signify nothing, as the Shakespeare quote goes, they didn’t exactly signify very much either.

Everybody knows the budget bill that now has journeyed from the east end to the west end of the Capitol’s third floor soon will be sliced, diced and respliced by the Republican rulers of the Senate. I suspect the slicer was already running when the bill came through the door of that chamber.

When the product of that process hits the Senate floor, we will witness more sound and fury, again signifying not very much.

Once that is over, House and Senate leaders will get together and work out a budget deal that serves their purposes. Then, they’ll go back and ram it through their respective chambers before anyone has a chance to read the fine print that tells us who walks off with the farm and who gets hosed.

So, while all the fiery rhetoric and posturing about what’s in and what’s left out and who’s doing what to whom at various stops along the way makes for good political theater and may prove useful in future campaign ads, it’s largely irrelevant to the process because what’s in and what’s left out and who’s doing what to whom may well switch places in the final version.

Then, the ensuing sound and fury could signify a lot. But it will be too late to matter.

Sunday’s column:

FRANKFORT — “This has been an amazing budget process,” state Rep. Harry Moberly opined Thursday during floor debate on House Bill 530, which would generate an estimated $371 million in additional revenue to help balance the next two-year state budget.

Note the use of the term “additional revenue” rather than (Horrors!) “new taxes.”

After all, proponents of HB 530 assure us — without even the hint of a wink or a smile — that it does not raise existing taxes or impose new taxes. It just magically generates extra cash, and that truly is “amazing.”

OK, truth in punditry notice: Unlike me, Moberly wasn’t being facetious when he described the process as amazing. The Richmond Democrat who formerly chaired the Appropriations and Revenue Committee went on to say HB 530 and the budget to come, which few have seen yet, represent one of the “highlights in the history of the House of Representatives.”

I, on the other hand, freely admit to harboring a healthy dose of skepticism about every aspect of the House budget process. (And an even healthier dose of skepticism about HB 530 being able to work all of its revenue-producing magic once the Republican-controlled Senate gets through with it.)

Start with the fact that the revenue portion of this two-step dance came first.

Ostensibly, a court ruling led to separation of the revenue and spending portions of the budget process. Skeptic that I am, though, I can’t help but note how conveniently that worked out for House Democratic leaders. They got to see who among the congregation sided with the angels on revenue before distributing the manna from heaven in the “jobs program” portion of the spending plan.

In case you haven’t paid attention during these recessionary times, “jobs program” has become the politically correct term for what used to be called “projects” or, in a more vulgar vernacular, “pork.”

These days, lawmakers don’t bring home the bacon. They create jobs that put people back to work. If the result of this labor oinks a bit, well, that’s the redeye gravy on the country ham.

Gov. Steve Beshear’s short-lived budget proposal contained a $1.8 billion “jobs program.” Look for the House version to be similar in scope but not in the details.

For instance, about half of Beshear’ proposal would have funded the top capital priorities of the eight state universities and the Kentucky Community and Technical College System. But why waste all that money on a few buildings for the academic crowd when it could finance hundreds upon hundreds of miniature “bridge to nowhere” equivalents back home in House members’ districts?

Besides, who really cares about preparing the state’s young ’uns to compete in a high-tech global economy? If we do that, they may start believing in fantasies such as “climate change.” Gotta protect them from that awful fate.

Another reason for my skepticism was last week’s assertion by House Democratic leaders that they are “plugging the leaky bucket” — a reference to a report from the Kentucky Chamber of Commerce that described the state budget as a leaky bucket because spending on corrections, Medicaid and public employee health insurance is draining away tax dollars that could be spent on education.

This feat of magic on the spending side of the ledger is no less amazing than the one that generated new revenue without raising taxes or imposing a new tax.

Bottom line for the House leaders’ claim: $4.61 billion in savings, including a $3 billion reduction in the unfunded liability of the Kentucky Teachers Retirement System.

But a good chunk of the remaining $1.61 billion represents assumed savings, including assumed savings in the next biennium of $730 million due to Medicaid efficiencies, $151 million due to changes in health insurance and $30 million from releasing non-violent felons from incarceration.

Assumptions are iffy things, however, and particularly so when referring to Medicaid “efficiencies.” While that’s a familiar tune in the halls of state government, humming it on key can be a difficult task.

Even if all these assumptions work out, it seems a bit disingenuous for House leaders to claim they are heroically “plugging the leaky bucket.” They are merely setting goals with these assumptions.

In essence, then, they are handing the leaky bucket to the Beshear administration and saying, “Here, get out the caulking and make it happen.”

Hmm. Now that I think about it, budgetary magic isn’t all that amazing when you leave the heavy lifting to others.

Sunday’s column:

FRANKFORT — Forget apples and oranges. A comparison of dissimilar fruit didn’t prompt the numbers game House Democratic leaders and the Beshear administration have been playing over how many non-merit employees roam the halls of state government these days.

However, you might say the widely disparate numbers coming from the two sides were the result of comparing grapefruit to oranges. For just as one citrus fruit differs significantly from another member of the citrus family, one non-merit state job can differ significantly from the next even though they, too, are members of the same family.

So, when House leaders put the current number of non-merit employees at 3,417, they are in the ballpark. According to numbers supplied by the administration Friday, the number of non-merit employees was 3,635 on Jan. 31, even more than House leaders claimed.

But whichever of the two numbers you use, it’s a number arrived at by putting all of the grapefruit and oranges in the same box. And that presents a misleading picture, one House leaders knowingly or unknowingly have made even more misleading by implying in their comments that a non-merit employee and a political appointee are one and the same. They are not.

Just as important, not all political appointees in the executive branch of government answer to Gov. Steve Beshear, although the comments of House leaders would make you think they do.

When you bore down into the numbers, you find that, of the 3,635 non-merit employees the administration cites as being on the personnel roles as of Jan. 31, 1,222 were employed by elected officials other than the governor — commonwealth attorneys, county attorneys and the other statewide constitutional officers.

Another 672 were teachers in career and technical schools or the state schools for the blind and deaf. And 346 more were employed by agencies that, by law, operate their own personnel systems — Kentucky Educational Television, the Council on Postsecondary Education and the Kentucky Historical Society, to name just three.

Like the teachers, the staffs of these agencies are career professionals whose tenure spans multiple administrations, both Democratic and Republican. They are about as far from being political appointees as you can get in government.

When you bore all the way to the bottom line, you find that Gov. Beshear appointed just 826 of the 3,635 non-merit employees in the executive branch on Jan. 31.

But I can understand why House leaders might want to blur the line that separates one non-merit job from another. They face the daunting if not impossible task of filling a $1.5 billion hole in the next two-year budget with something other than funny money.

By painting with a broad brush, they can create the perception — misleading and disingenuous as it may be — that, if the budget they’re drafting orders Beshear to axe as many 125 political appointees, they are subtracting that number from more than 3,000 non-merit jobs rather than from the 826 Beshear has appointed.

It’s just as understandable — and just as misleading and disingenuous — that, in choosing the dates of comparison between the number of non-merit employees in the Beshear administration and that of former Gov. Ernie Fletcher, House leaders did resort to comparing apples and oranges.

Comparing numbers from the end of Fletcher’s term to Beshear’s mid-term numbers creates the appearance that the number of non-merit jobs has increased significantly under Beshear, thus making it easier for House leaders to order a 125-job reduction in force.

But once Fletcher lost his bid for re-election in early November 2007, his political appointees had good reason to look for a place to land — and to do so quickly. Thus, it’s only logical to assume that several of those appointees had already bailed by the end of his term in December 2007. By choosing that point in time to take a snapshot of the Fletcher administration, House leaders distorted the picture of the Beshear administration.

A fairer comparison would be to look at mid-term picture for both administrations. According to those numbers the Beshear administration supplied Friday, if you make that comparison, you find that the total number of non-merit jobs grew by nine (3,626 to 3,635) from one administration to the other and that the number of gubernatorial appointees grew by 26 (800 to 826).

Mind you, I’m not poking holes in the House leaders’ arguments because I think it’s wrong for them to draft a budget that orders some personnel reductions. Considering what the private sector has gone through lately and the magnitude of the budget hole they’re trying to fill, it would be difficult if not impossible for them to justify not trimming the state payroll.

I just wish they would be more stand-up in doing so. Because if they are engaging in such misleading tactics on a budget item that at best will add a few million dollars to the total, we can only wonder what depths of deception they will plumb in dealing with the budget’s big ticket items.

Sunday’s column:

FRANKFORT — It’s a perennial lament. At some point, it always pops up in the hallway chatter.

“This is the strangest, damnedest, expletive deletedest General Assembly session ever” — or other expletive deleted words to that effect.

This time, though, it rings more true, more real, more apropos than in the past. Because this really is one weird session.

How weird?

Well, the other day, the House adopted a resolution categorizing horses as a natural resource of Kentucky and urging the General Assembly to grant horses all the tax exemptions afforded to other natural resources.

Excuse me ladies and gentlemen of the House, you are the General Assembly — or at least half of it. Why pass a resolution encouraging yourselves to do something when you can just go ahead and pass a bill that actually does the something you want to do and then send it down the hallway to see if the Senate wants to do it, too?

Weird. Definitely weird.

Each day, the House speaker’s office puts out a summary of legislation awaiting action in that chamber. On successive days last week, it described House Bill 180 in the following words:

“The bill prohibits knowingly allowing, aiding or abetting a person to practice message therapy without a license.”

Message therapy? Is that what a spin doctor does? If it is, the halls of state government — indeed, government at all levels — are filled to overflowing with unlicensed practitioners of that, uh, art.

But enough of the “Ha, ha” weirdness. Let’s move on to the seriously weird world of budgeting.

Remember Gov. Steve Beshear’s proposal? The one thrown immediately into the legislative trash can because it “assumed” $780 million from racetrack slots even though that particular form of gambling is not yet legal in Kentucky?

Bad as it may have been, it didn’t leave a hole of up to $200 million in the spending plan for the second year of the biennium. The House version broadly outlined — very broadly outlined — last week does.

During a joint press conference with Senate President David Williams Friday, House Speaker Greg Stumbo expressed some hope the economy would recover in time to fill that hole. If not, well, there will be plenty of time to fix it after most legislative incumbents have survived the November election.

But I’m a bit puzzled. Beshear budget? Bad, because it assumes money that isn’t there yet. House budget? Good, because there’s hope the money that isn’t there yet will be there when it’s needed. I guess hope trumps assumptions.

Still, the House spending plan is just as full of assumptions as Beshear’s plan was.

It assumes Uncle Sugar will drop another $220 million or so in Medicaid stimulus money in Kentucky’s lap. It assumes $100 million in savings in the Medicaid program, $150 million in savings on health insurance for state workers and a $90 million windfall from accelerated sales tax collections.

But we mustn’t assume House leaders put their plan together with smoke and mirrors because, in outlining the proposal for the media Thursday, Stumbo specifically said no smoke and mirrors were involved.

However, he did not rule out wishful thinking. And there seems to be plenty of that in the House budget.

Before it’s over, there will be plenty of bond-financed projects, too. Of course, that Christmas list won’t be compiled until votes are counted. Only then will legislative leaders know who’s been naughty and who’s been nice in this session.

One oddity in the House budget involves the proposal to eliminate 105 non-merit jobs in the executive branch and reduce spending on personal service contracts.

Mind you, those cuts might well be justified. However, if the speculation is correct that Stumbo has gubernatorial aspirations of his own, the precedent he proposes to set in this budget could well come back to haunt him in the future.

Oh well, strange things happen in a weird session.

Sunday’s column:

FRANKFORT — Hump Day for the 2010 General Assembly arrives this week, assuming Mother Nature doesn’t do to Kentucky’s capital city what she did to the seat of national government. With the end of the uphill portion of this slog in sight, it seems an appropriate time to take stock of where we are.

Some good stuff is moving, most notably in the areas of domestic violence, texting while driving and increased accountability for those wild and crazy party animals at the Kentucky League of Cities and the Kentucky Association of Counties.

Some bad, uh, stuff is moving, too, including the perennial proposal to allow the mass murder of trees and other living things so motorists can have an unobstructed view of those scenic wonders known as billboards.

This session hasn’t lacked for entertaining diversions, particularly in the Senate where reports of secret videotaping were followed by allegations of naughty language being uttered on the floor of that bastion of decorum. (Gasp! Horrors! My sensitive ears can’t take it!)

And of course, there is the budget. What can you say about that 900-pound gorilla?

Continuing a tradition that dates all the way back to last Sunday’s column, we look through the vault of oldies but goodies for a song title that aptly describes the budget’s current status. Ah, there it is: the Temptations’ 1970 classic Ball of Confusion.

After years of “balancing” structurally imbalanced budgets with smoke, mirrors, chewing gum, baling wire, raids on every available source of one-time money, massive debt and “assumptions” that defy the laws of mathematics, Kentucky lawmakers finally have met a $1.5 billion hole they can’t patch — at least not now.

They threw Gov. Steve Beshear’s plan out like it was dirty dishwater almost immediately after he unveiled it on Jan. 19. But nearly four weeks later, they still haven’t settled on an alternative.

Everyone knows the general goal: Use the last of the federal stimulus package to limp through the November election cycle. Then, start praying for another federal bailout of cash-strapped state governments.

But putting the parts together to even get through November can be problematic, as last week’s confusion over Medicaid funding demonstrated. Was Peter really being robbed to pay Paul’s Medicaid bills, or was he just being a generous benefactor?

I don’t know. I’m as confused as everyone else, including the governor. His Thursday letter to all 100 House members urging them to revisit the slots issue showed him to be confused enough to bet on a dead horse rising from the grave and winning the Kentucky Derby at the wire.

But back to that goal of limping through the November election cycle. It’s important because incumbent lawmakers who want to remain incumbents instead of falling victim to the “throw the bastards out” fever sweeping the land don’t want Kentuckians to feel the pain before Election Day. After that, well, whatever budget gets enacted now will start to unravel, revealing itself for the work of fiction it will be.

For instance, whether or not Peter got robbed, that Medicaid fix just gets the state through Dec. 31. No further. Barring the miraculous congressional passage of another federal stimulus targeted at Medicaid, it will be time to slash and burn or come up with more revenue.

Of course, our lawmakers remain confident — for public consumption at least — that Congress will bail out the states with another general stimulus package as well as more Medicaid money. In their budgetary ball of confusion, I guess they missed the memo about the Democrats losing the filibuster-proof, 60-vote Senate majority they need to do good deeds for the states.

And no matter how legislative leaders spin it, their assumption of more federal stimulus money is just as fallible as the assumption of slots revenue in Beshear’s proposal, an assumption those same legislative leaders rejected out of hand.

Cynic that I am, my scenario of how things will play out is somewhat less rosy than the one envisioned by our legislative Pollyannas. I suspect a day will dawn, shortly after the November election, when it becomes clear no more pennies will rain down from Washington heaven. Then, lawmakers will face the very same choices they’re ducking now: Raise taxes, enact slots legislation, or grab the ax and lighter fluid.

My guess is it will be a combination of the first and third of those options.

Mind you, I’m not predicting. I’m just supposing.

Like I’m supposing there is no significance at all to the fact that the General Fund budget, the Road Fund budget and the judicial budget have been introduced, but not the legislative budget.

Even as cynical as I am, I wouldn’t dare suggest lawmakers are waiting to see how many dollars they can wring out of the other branches of state government before deciding how many they get to play with themselves.

Sunday’s column:

FRANKFORT — “Sign, sign, everywhere a sign … ”

Pardon the flashback to 1971 when the Five Man Electrical Band had its signature hit. But the intro to the topic of the day involves signs – signs that a Democratic governor and a Democratic-controlled state House coexist in a world without love. (Yeah, I know, that’s time traveling even further into my youth.)

Sign: No member of House Democratic leadership has signed on as a co-sponsor of Gov. Steve Beshear’s budget proposal.

Sure, Democratic leaders snubbed former Gov. Ernie Fletcher, a Republican, in the same way. But Rep. Harry Moberly, a former Appropriations and Revenue Committee chairman who has been in the House since 1980, could not recall any other time a Democratic governor’s budget proposal didn’t have some members of leadership signed on as co-sponsors.

“There’s no significance to that,” House Speaker Greg Stumbo said in an interview last week. “I’ll co-sponsor it if they want me to.”

“We really didn’t mean to slight (Beshear),” Stumbo added. “ … I just forgot about it, to tell you the truth.”

But in that same interview, Stumbo said he generally sponsored all legislation proposed by governors, including the budget, “as a courtesy to the governor” during his many years as majority floor leader. Odd how a politician as practiced and savvy as Stumbo “just forgot” that kind of tradition.

Sign: The Jan. 29 edition of This Week in Frankfort, a newsletter produced by the non-partisan Legislative Research Commission’s staff, began this way: “If there’s such a thing as a reverberating thud, the last echoes of a big one faded away in the Capitol this week, as the governor’s dead-on-arrival budget proposal receded into memory and the General Assembly turned toward drafting its own.”

Having referred to Beshear’s budget landing with a “thud” myself, I’m reluctant to criticize others who do the same. Still, a governor with friends in high General Assembly places might expect an LRC newsletter to be a bit more respectful than a curmudgeonly old newspaper columnist.

Sign: Aside from a budget briefing open to the leadership of both parties in both houses, House Democratic leaders had not met with Beshear this year until this past Monday, the 18th day of a 60-day session.

A governor and House leaders of the same party who are on the same page don’t wait until a session is nearly one-third of the way to the finish line to start discussing budgets and other issues. They’re plotting strategy together from Day One.

You might expect a disconnect between a D governor and an R-controlled Senate, but a disconnect between that same governor and a D-controlled House needs a bit of explanation.

Part of it stems from the shift in the balance of power in state government over the past three decades. During that time, Kentucky moved from a strong governor and weak legislature to a strong legislature and weak governor — at least during legislative sessions. Between sessions, a Kentucky governor still wields considerable power.

To illustrate this transition, one need only look at how budget politics have changed. Back in the day, strong governors used budgets introduced late in the session to reward or punish lawmakers for their voting habits during a session. Today, budgets are still used to reward and punish. But governors now are required by statute to present their budget proposals early in the session, leaving legislative leaders plenty of time to transform them into their own system of rewards and punishments.

In addition, this shift in power has produced greater legislative oversight of executive branch activity and has reduced gubernatorial patronage powers. That latter circumstance represents an improvement over a past when governors could call lawmakers in and buy their votes by promising contracts or leases to their friends. All of this has made it more difficult for governors to influence legislative elections. So, lawmakers have less reason to fear them.

Today’s lawmakers, regardless of party, relish their freedom and power and aren’t inclined to sacrifice any of it, even if it means sacrificing the agenda of their own party’s governor. After all, governors come and governors go. Lawmakers hang around forever.

But the changing balance of power doesn’t fully explain the disconnect between Beshear and House Democrats. If that were the only factor in play, former Gov. Paul Patton might never have been able to get his higher education reforms enacted in 1997.

Style comes into play as well. As legislative power has grown, so have legislative egos. Their continuing takeover of the Capitol Annex to provide them with ever larger and better offices — some of which make the Governor’s Office pale by comparison —  reflect their improved self-image.

Where lawmakers of the distant past marched to daily orders from the Capitol’s first floor, today’s legislators expect to be stroked. But stroking does not appear to fit Beshear’s nature. He has confidence in himself and his staff. And he expects the rightness, the sensibility, the wisdom of the policies they collectively produce to sell themselves.

But Patton didn’t succeed by dropping higher education reform in lawmakers’ laps with the expectation that they would approve it because a governor said it was the right thing to do. He not only stroked them, he spent months crisscrossing Kentucky pitching his ideas to anyone who would listen. Because of that effort, and only because of that effort, he slew the most powerful political dragon in the land at the time — the University of Kentucky’s network of community colleges.

Beshear has not exerted that kind of effort and commitment in pursuit of his own No. 1 goal: expanded gambling that makes Kentucky racetracks competitive with their counterparts in “racino” states. Had he done so, his relations with House Democrats might not be any better. But his won-loss record might be improved.

Finally, there is this: Beshear and House D’s do not appear to trust each other, with good reason.

Beshear got ambushed by House D’s in his first attempt at getting expanded gambling through the General Assembly. But during that same session, he sprang his own ambush by proposing, out of the blue and without consulting House D’s, a 70-cent increase in the tax on a pack of cigarettes. This year, he ignored House leaders who urged him not to introduce a budget that anticipated revenue from racetrack slots.

He doesn’t listen to House D’s; they don’t listen to him. And based on their past experiences, I suspect each side believes the other would throw them under the bus if it were politically expedient to do so.

Trust issues and communications breakdowns are signs, too, signs of a fractured relationship.

“Sign, sign, everywhere a sign … Can’t you read the sign?”

Sunday’s column:

FRANKFORT — This and that as we await the real liftoff for the 2010 General Assembly, which should finally occur sometime after Tuesday’s 4 p.m. filing deadline for folks masochistic enough to want the responsibility of solving future $1.5 billion budget holes without (a) voting for expanded gambling in an election year or (b) voting for a huge tax increase in an election year:

Gov. Steve Beshear’s budget bomb landed with a thud (rhymes with dud) Tuesday night. By Wednesday, his proposal to include $780 million in revenue from racetrack slots in the two-year spending plan was the subject of considerable derision, even among House Democrats who passed a racetrack slots bill last year only to see it die in a Senate committee.

When I heard Beshear might include slots revenue in his budget plan, I must admit my initial reaction included the word “stupid.” After further reflection, though, I realized he had nothing to lose.

If he had sent lawmakers a plan based on current revenue projections, they might have passed it with few if any changes. Then, when the pain started to be felt in education, social services, Medicaid, environment protection, criminal justice and every other aspect of state government, they would be in a position to point fingers at Beshear and say, “We gave him just what he requested.”

This way, responsibility for making those cuts will rest solely with lawmakers — in a legislative election year. Beshear offered them a way out of the $780 million hole. If they choose not to take it, they — not he — will have the targets on their political backsides if a pared-down budget prompts marches on Frankfort by teachers, state workers or ordinary voters who feel the pain from lost services.

That’s really the way it should be. Governors can only propose budgets. Legislators enact them. And ever since former Gov. John Y. Brown Jr. ended the era of strong governors who sent representatives and senators their marching orders on a daily basis, budgets increasingly have become the offspring of lawmakers, carrying far more of their DNA in recent years than any governor’s.

Mind you, Beshear is hardly wearing a clean white hat here. In a way, he passed the buck. But the legislative leaders who spent the last few weeks urging him not to include slots revenue in his budget proposal were passing the buck as well. They wanted him to make the tough choices for them, so they could blame him for the consequences.

In what you might call a political game of chicken, Beshear didn’t swerve to avoid a crash. But the crash may have made him political road kill by rendering him irrelevant in the budget discussions to come.

Slots revenue will not be a part of those discussions — not unless Senate President David Williams experiences a light-in-the-road-to-Damascus conversion on the subject.

Don’t count on tax reform either. If the group of House members Speaker Greg Stumbo has working on the issue do arrive at an acceptable compromise, it’s more apt to be dealt with in a special session than in this one.

That leaves cuts and the world’s full supply of smoke and mirrors in lawmakers’ hands as they go about building a budget from scratch. Expect them to use more of the latter than the former.

One option is to craft a budget that uses the last of the stimulus money to minimize the damage in the first year — after all, it’s a legislative election year — and shove all the real pain into a second-year budget balanced with wishes, hopes and pipe dreams. Doing so would allow lawmakers to delay the serious cutting until 2011, when they can do it themselves in a non-election year for them or pass the buck back to Beshear in his own re-election year by simply authorizing him to make whatever cuts are necessary.

Hmm. The former requires lawmakers to act responsibly. The latter allows them to get even. I like the odds on the latter.

                                                    * * *

One of the hopes some Kentucky legislators still cling to is that Congress will bail states out with another stimulus package.

If Beshear’s budget plan was “delusional,” as Rep. Mary Lou Marzian suggested, continuing to dream of another stimulus in the wake of Tuesday’s election results in Massachusetts qualifies as “delusional in the extreme.” A second stimulus package probably died when Republican Scott Brown upset Democrat Martha Coakley in the race to fill the late Sen. Edward Kennedy’s seat.

                                                    * * *

Those Massachusetts results represent a national example of what we have seen so often at the state level in recent years. Democrats have an infinite capacity for self-destruction.

They returned to power in Congress because voters tired of the arrogant and heavy-handed way Republicans ran things. But as soon as they took control, Democrats began displaying the same arrogant, heavy-handed ways the Republicans used. The only change was in the policy goals the ruling party pursued.

You would think one of the parties would learn from the mistakes of the other, if not from their own. Democrats didn’t learn from the Republican mistakes, and they paid the price in Massachusetts.

Sunday’s column:

FRANKFORT — Admittedly, listening to a bunch of economists talk tax policy for three-plus hours doesn’t register on my list of favorite ways to spend a wintry morning. Extra snooze time in a warm bed offers far more comfort for body and soul.

Still, there I was Wednesday, sitting in the Capitol Annex listening to those economists describe the myriad ways Kentucky’s tax policy sucks wind – big time.

Not that this in itself was news. Numerous studies over the years have reached basically the same conclusion. All of them continue to gather dust while resting peacefully somewhere in the halls of state government. Such has been the commitment of our elected leaders to giving this state an equitable, stable and sustainable revenue base. Unfortunately, that seems unlikely to change in the 2010 General Assembly.

But if the tax symposium sponsored by the University of Kentucky’s Martin School of Public Policy and Administration didn’t make news in regard to the overall performance of the state’s tax structure, it did provide some interesting reminders of why it sucks wind – big time.

For instance, there is the shrinking sales tax base. In 1979, the state’s sales tax base as a percentage of personal income was almost 55 percent, according to William Fox, the University of Tennessee economist known best in Kentucky for producing one of those studies gathering dust somewhere in this capital city. By 2008, that number was down close to 40 percent.

No doubt one of the reasons for this decline has been the growth of the service economy. Kentucky taxes the sale of things, but not the sale of services. We won’t have a modern tax structure until it’s tied to that fastest growing part of the economy.

But another factor stems from the fact that, nearly every time the General Assembly comes to town, some industry or segment of the business community drops by asking for tax breaks. Too often, lawmakers grant these requests. Earlier in January, the Herald-Leader reported on the consequences of these actions.

In fiscal year 2010, the story noted, the state will collect about $3 billion in sales tax revenue. But it will take a pass on another $2.4 billion in potential revenue from sales that have been granted exemptions.

As University of Kentucky economist David Wildasin noted at Wednesday’s symposium, specialized tax breaks amount to selective subsidies of the affected industries. Kentucky tax law is full of such breaks.

Another problem mentioned several times by the economists is Kentucky’s heavy reliance on income taxes as opposed to property taxes. That has multiple negative consequences, according to their presentations.

Income taxes are more volatile than property taxes. That has been evident during the worst recession of most of our lifetimes. Property values have taken a hit, but nothing like the hit double-digit unemployment rates have inflicted on income.

Even more than business taxes, individual income taxes on company executives tend to be a deciding factor when corporations think about locating facilities in a state.

Along Kentucky’s borders with neighboring states, particularly Tennessee, high-income families are more apt to live in the neighboring states with lower income taxes.

And Kenneth Troske, another UK economist, made the point that Kentucky’s taxes favor older workers who own property but hurt younger, highly educated workers whose wealth is in human capital. This circumstance, Troske said, limits the state’s ability to attract the kind of high-tech companies that employ the younger, better educated crowd.

In all three of these instances, Kentucky’s antiquated tax code works to the detriment of its economic development efforts.

A few other items of interest gleaned from Wednesday’s discussion:

* The best tax policy would include a broad base and low rates. Kentucky’s tax policy has produced just the opposite — a narrow base with high rates, higher as a share of income than our neighboring states.

* People hate income taxes more than they hate sales taxes. I see that as one more argument for shifting our emphasis to an expanded sales tax base, particularly in the service sector of the economy. Oh, and picking up a bit of that $2.4 lost to exemptions would be a good idea, too.

* Tobacco taxes don’t translate into revenue growth. But as a nine-year survivor of lung cancer, I would argue the health benefits of raising tobacco taxes are well worth the effort.

Somewhere in all of the information shared at this symposium, there ought several items of interest to a governor and General Assembly facing a $1.5 billion hole in the next two-year budget. But a recession is no time to do tax reform, says Gov. Steve Beshear. And few are the lawmakers rushing to tell him he’s wrong.

Guess we’ll just keep sucking wind — big time.

Sunday’s column:

FRANKFORT — More than once in this column, I’ve noted the sight that often greets folks leaving the Capitol late in the day.

Buzzards. Hundreds of buzzards circling the sky above the seat of state government. Hundreds more roosting in the trees lining the nearby Kentucky River.

They come to mind again as another General Assembly begins because their numbers and the sense of impending death these carrion convey make them a fitting symbol for the likely outcome of the triangular political maneuvering that will play out below them during the next few months.

Call this the Buzzard Triangle, because it can be just as deadly as the fabled Bermuda Triangle. Not for ships, sailors and passengers, mind you. But rather for reason, common sense and any semblance of bipartisan support for good public policy that can drag Kentucky out of the mid-20th century — if not the 19th — onto the doorstep of the 21st century’s second decade.

Gov. Steve Beshear occupies one corner of this triangle. He wants Kentucky racetracks to get slots, and not solely because it would put them on an equal footing with their counterparts in “racino” states where purses and breeding incentives are fattened with revenue from expanded gambling. Taxes from racetrack slots would make it a bit easier for Kentucky to deal with a $1.5 billion revenue shortfall over the next two-year budget cycle.

But Beshear repeatedly has voiced opposition to enacting comprehensive tax reform during a recession. Never mind that real reform would give relief to low- and middle-income Kentuckians at a time of their most desperate need. Never mind that it would give the state the stable, sustainable revenue base that would make it more resilient in future economic downturns. Now is not the time to do tax reform, according to Beshear.

In another corner of the triangle sits House Speaker Greg Stumbo. He, too, supports racetrack slots. He even pushed a bill through the House last summer only to see it die in a Senate committee.

Unlike Beshear, though, Stumbo has made positive noises about addressing some level of tax reform in this session. His stated motive is that he doesn’t want to turn his back on education, which has been protected from the effects of other recent revenue shortfalls but may be at risk now.

That leaves the third corner, where Senate President David Williams talks about slots as if they are a societal ill, even though he has acknowledged frequenting casinos himself.

Williams also has indicated a willingness to address tax reform. But his recent comments regarding the size of the revenue shortfall (he puts it at something less than $1 billion) suggest he’s more inclined in this session to reduce the size of state government and make it live within its means. Of course, that probably would involve layoffs of state employees that increase the state’s jobless rate as well as the demand for the very state services that get cut in the process.

Beshear needs a win. Midway through his first (and perhaps only) term, his administration’s achievements, commendable as some of them may be, fall considerably short of “legacy” status.

Partly, that is the result of having to deal with a series of revenue shortfalls that not only demanded much of his attention during the past two years, but also left no spare budget change for sexy new initiatives.

But a significant share of the blame rests with Beshear himself. He squandered much, if not all, of his post-election political capital in a disastrously unsuccessful attempt to keep Lt. Gov. Daniel Mongiardo’s former Senate seat in the D column. He has never fully recovered from that debacle and has yet to demonstrate the political and persuasive skills a governor must bring into play if he wants to bend the legislative process to his will.

Stumbo’s recent comments on taxes and education (following his success at pushing expanded gambling through the House after Beshear failed in his first attempt) at least suggest he may be positioning himself as a strong, progressive alternative to a weakened, hesitant incumbent in the 2011 Democratic primary.

Upset by Beshear’s attempts to improve Democratic numbers in the Senate by appointing incumbent Republicans to plum jobs, Williams can be expected to make life as difficult as possible for the governor during this session. Of course, if obstructionism by Senate Republicans produces Draconian results, well, that has a down side, too.

So, there it is. Welcome to the Buzzard Triangle.

Mixing comparisons, if not metaphors, the inscription at the entrance to Hell in Dante’s Inferno provides an apt warning of what lies ahead as this triangle maneuvers through the 2010 session: “Abandon hope, all ye who enter here.”

Hooray! Column time again. But this is the last one for the year. We’ll be shorthanded next week, and I’m outta here the following week. So, happy holidays to all.

Sunday’s column:

You win some; you lose some.

Gov. Steve Beshear and the Kentucky horse industry won one, barely, in a special election to fill the state Senate’s 18th District seat. Then, they lost one, big time, in a 14th District special election.

After Rep. Robin Webb won the 18th District seat vacated when Beshear appointed Republican Charlie Borders to the Public Service Commission, Democrats figured they had found a winning formula for taking back the Senate after 10 years of being exiled from power.

On the other side, the unsuccessful pitch Senate President David Williams and Sen. Damon Thayer made to a horse industry group about  linking expanded gambling to a vote of the people suggested Republicans were hearing hoofbeats.

So, Beshear tried the “appoint and conquer” gambit again, naming former Majority Leader Dan Kelly to a circuit judgeship. But the second attempt turned into a big “Oops!” for Beshear and the horse industry when Republican Rep. Jimmy Higdon soundly defeated the Democratic candidate, former state Rep. Jody Haydon, in the special election to fill the 14th District seat.

For different reasons, Beshear and U.S. Sen. Mitch McConnell tried to spin the result into a reflection of the national mood — Beshear to deflect blame, McConnell to argue the public is outraged at the Democratic powers that be in Washington.

But even though Republicans used some national issues in this race, all politics is local. And this race was as local as it gets.

First, the horse industry hurt its own cause by going negative early and often. Higdon, a likeable candidate well known in the district, no doubt picked up some sympathy votes as a result.

Second, Beshear angered some Democrats in the district by appointing a Republican to a judgeship coveted by members of his own party. Angry members of your own party don’t help you win elections.

Third, appointing one Republican to a cushy job in hopes of electing a Democratic replacement can be spun as something other that what it really was. But a second appointment establishes a pattern that looks remarkably like a power grab, and voters tend to dislike power grabs.

Finally, Higdon may have started the race with an edge in name recognition because he had been on the legislative campaign trail more recently than Haydon and because the geography of the district put him in proximity to more of its voters. Marion County, Higdon’s home, borders three of the district’s other four counties while Nelson County, where Haydon lives, borders just two.

Even though he’s 1-1 in special elections created by appointment, Beshear probably won’t try it again anytime soon.

So, what does the horse industry do next in pursuit of racetrack slots?

Well, if it can’t change the 20-17-1 Republican-Democrat-Independent dynamic in the Senate, maybe it can exploit the division in the Republican Party over gambling to change the dynamic within the Senate Republican caucus.

Williams has the caucus aligned with the party’s voting base, which opposes expanded gambling. But that upsets many Republicans because it has cut off some of the flow from its money base, which traditionally has included the Thoroughbred industry as a major player.

It still can be a player if, instead of just giving money for any Republican cause, it focuses on fielding well-financed, pro-slots primary opponents for incumbent Republican senators who have let a “red” industry down.

Even in safe districts for one party or the other, the fear of well-financed primary opponents can concentrate incumbents’ minds, perhaps enough so in this case to change some of those no Republican votes into yeses.