August 1, 2011
Williams' father-in-law donates $1 million
The Kentucky Gazette reported this afternoon that Terry Stephens of Russell Springs, the father-in-law of Republican gubernatorial candidate David Williams, donated $1 million in June to the Republican Governors Association. The RGA said before the donation that it planned to be “aggressive” in the commonwealth this year, because the Kentucky governor's race is one of only four in the nation. On July 11, the RGA launched a TV ad on Williams’ behalf. To read more, go to the Gazette’s website at www.kentuckygazette.com.
September 3, 2010
The Julian Carroll Story
Note to readers: This article ran in the September 2010 issue of the National Conference of State Legislature's magazine.
Smooth as a Flat Rock
The Kentucky senator has seen Bluegrass politics from the statehouse to the governor’s mansion and back again. September 2010
By Lowell Reese
When Kentucky Governor William Goebel was shot to death in 1900—the only American governor ever assassinated while in office—he was succeeded by Lieutenant Governor J.C.W. Beckham. As lieutenant governor, Beckham was also president of the Senate, and a month earlier he had been speaker of the House.
Since then, only one other person has held Kentucky’s top two jobs in the legislative branch and the top two jobs in the executive branch: Julian Carroll. He became speaker at age 37, lieutenant governor and Senate president at 40, governor at 43. Now at 79, he’s halfway through a second term in the Kentucky Senate. And unlike Beckham, no one had to die for him to achieve the milestone.
When Carroll, a Democrat, ran for lieutenant governor and governor in the 1970s, Kentucky’s diversity was a challenge for statewide candidates. There was coal in the east and cotton in the west. Cocktails were served before political rallies in the north, prayers were offered before rallies in the south. Old-fashioned stump speaking and wooing of local courthouse officials were the tools of the trade. In all of those dimensions, Carroll—attorney, orator and lay preacher—was capable and smooth as a flat rock.
Always a leader, Carroll was also often lucky. He was born in western Kentucky, called the “Rock of Gibraltar” in political circles because the region was the state’s largest enclave of Democrats.
Destined for Politics
In 1949, Carroll was elected governor of Kentucky Boys State, a mock-government program for high school students. When Carroll and the other Boys State governors met in Washington, D.C., Vice President Alben Barkley spoke to them. They also met President Harry Truman, who asked the 18-year-old Carroll where he was from. When Carroll replied, “Paducah,” Truman quipped, “Seems like I’ve heard of that town.” It was Barkley’s hometown.
Carroll’s public life reads like the fulfillment of a destiny. After earning a B.A. and then a law degree at the University of Kentucky, he entered the Air Force in 1956. He spent three years in uniform, most of it at Carswell Air Force Base in Fort Worth, Texas, where he was the attorney for the base commander, Brigadier General Nils Olman.
The general was so impressed with Lieutenant Carroll that he held a going-away party for him when he left the service. Generals don’t usually do that. It became a tipping point in Carroll’s career.
When he returned to Paducah in December 1959 to practice law, the local newspaper ran a large article about the general’s party for Carroll. Soon afterward, a delegation of local business leaders came to his law office and asked if he would lead a community effort to pass a referendum to allow the city to buy the Kentucky Utilities facility in town and convert to low-cost electricity from the Tennessee Valley Authority.
Carroll agreed and voters approved the referendum by almost 3-to-1. His name became a household word. He was on his way to a long career in politics with a statewide base of support in the electric utility industry.
Carroll was elected to the Kentucky House of Representatives in 1961. When he arrived at the Capitol in January 1962, Democrats outnumbered Republicans in both chambers, and Democratic Governor Bert T. Combs, like other governors of the period, dominated the legislature. He named the leaders, including committee chairs, and told legislators how to vote, and they complied.
“I remember Governor [Edward T. “Ned”] Breathitt coming to the floor of the House in his first legislative session in 1964,” Carroll says. “Breathitt spoke. The floor leader introduced the governor’s budget. We recessed the House. The budget bill was referred to the Statutes 1 Committee. … which met in the corner of the chamber and reported the bill out while the governor was still on the floor shaking hands. The next day, the bill was voted on and passed out of the House.”
Change Comes
In 1967, Republican Louie B. Nunn won the governor’s office and brought a major change to Carroll’s political fortunes. The House Democrats, still a majority, were now free from gubernatorial control.
Carroll saw it coming. A group of House Democrats called the “Young Turks”—which included now Lexington attorney W. Terry McBrayer—backed him for speaker, a position he held during Nunn’s four-year term.
“We rallied around Julian. He was just a hair older and ahead of us politically,” says McBrayer, who was Carroll’s speaker pro tem in the 1968 session and majority floor leader in the 1970 session. “He was clean, articulate, extremely bright, and he came from the far west where the most Democrat votes were at the time.”
Speaker Carroll made significant changes in the House structure and procedures. Previously, out of 47 standing committees, only two really counted. Bills the governor wanted passed went to Statutes 1, and bills the governor wanted killed went to Statutes 2. There was no danger of reporting a bill out of Statute 2, Carroll says. “It never met.”
Carroll reduced the number of standing committees in the House to 18 and did away with the statutes committees. Most of the standing committees he established are still operating. And he wrote the House and Senate rules that are used today.
The Planets Align
The Republican governor’s term was up in 1971, and former Governor Combs announced he would seek the office again.
Carroll’s friend J.R. Miller, whom he knew from their effort to form the Big Rivers Electric Corporation, told Carroll he was going fishing with Combs in Canada. While they were together, Miller said he planned to ask him to choose Carroll as his running mate for lieutenant governor. Combs agreed, though in those days the governor and lieutenant governor were elected independently.
After the fishing trip, however, Miller switched his support from Combs to Lieutenant Governor Wendell Ford, who was from Miller’s hometown. In the primary, Ford defeated Combs. Carroll won his race and became Ford’s running mate in the fall. “It was not a very friendly relationship,” Carroll says, “but we ran together, and we were both elected.” Ford was term limited, and his people didn’t want Carroll to succeed him. So in 1973, they tried to talk Carroll into running for the U.S. Senate in 1974 against incumbent Republican Marlow Cook.
Instead, Carroll called Robert Strauss in Washington, D.C., the Democrats’ national chairman, and explained how Ford could beat Cook in the Senate race. Strauss agreed and Ford ended up running against Cook and winning. The move made Carroll Kentucky’s 54th governor.
Carroll ran for a full term as governor in 1975 as an incumbent and won.
Defining Events
Carroll faced two momentous events a year and a half apart that helped define his governorship.
In the final weeks of the 1975 election, Louisvillians rioted over the racial issue of forced school busing.
Mayor Harvey Sloane, anticipating destruction of property and potential violence, called the governor, and Carroll sent in 500 state police and the Kentucky National Guard. That broke the riot.
Sloane, a physician and now director of public health for the Washington, D.C.-based Eurasian Medical Education Program, recalls how difficult the decision was for Carroll in context of the election.
“Had there been a poll, only about 10 percent would have favored it,” Sloane says.
Then on May 28, 1977, the Beverly Hills Supper Club fire in Southgate, the third deadliest nightclub fire in U.S. history, killed 165 people. The fire broke out around 9 p.m. Carroll was at the governor’s mansion with Kentucky native and movie star Lee Majors, “The Six Million Dollar Man.”
Carroll left Majors at the mansion and rode up the interstate in a state police car at speeds exceeding 100 mph. Throughout the night, he went from the scene of the tragedy to the hospital to the morgue.
“I watched them carry body bag by body bag out,” Carroll says. “I went down to the gymnasium where they were all laid out.”
Carroll fired the state’s fire marshall and immediately launched an investigation, which led to various reforms.
Roy Stevens, one of Carroll’s top staff officers, helped organize the investigation. He said the fire “brought into clear focus Julian’s finest qualities”—calm in a crisis, compassion for the victims, committed to getting the facts and doing what was needed in making changes.
Playing Each Role Well
While Carroll may have done more for legislative independence than anyone, as governor he exercised the full traditional powers of that office.
“A cockroach couldn’t crawl across the Senate floor without an OK from the governor stamped on its back,” says one observer in the book “New History of Kentucky.”
Representative Jody Richards, former speaker of the House, says Carroll knew how to hold the reins of power tightly. “One quality that made him effective was he knew when to dispense authority and when to use it. He allowed certain members to take home largesse and exercise limited authority from time to time.”
Carroll was persuasive, too. “I was known as ‘the blackboard governor,’ ” he says. On major legislation, he invited legislators to the basement of the mansion where he had set up a large blackboard. “I made my presentations in detail, they asked questions, and when they left, they would be for my bills.”
Carroll is regarded as Kentucky’s last powerful governor. His successor, Democratic Governor John Y. Brown Jr., in the 1980 session, yielded to a rebellious band of Senate Democrats called the “Black Sheep Squadron,” who chose their own leaders. Other reforms to follow would make the legislative and executive branches equal.
In July 1978, the FBI launched an investigation of Carroll and others associated with his administration over leases and contracts. He testified before a grand jury, but was never indicted. He was called as a witness at the trial of another individual and took the Fifth Amendment, which made big news.
“My lawyers wouldn’t let me testify,” Carroll says. “They felt the Justice Department was trying to get me to testify in hopes I would commit perjury, and then they would indict me for that.”
The governors of five other states were being investigated at the same time; four were convicted.
In part, to restore his reputation, Carroll ran for governor again in 1987. Although he lost in the primary in a five-man field, “The thing that race did for me … it cleared my name,” Carroll says.
Eighteen years later, he ran for the state Senate and won.
Different Era
Carroll never returned to Paducah to live after serving as governor. Instead, he bought a 109-acre farm outside of Frankfort, and began practicing law in the capital. As a state senator, his district has some of Kentucky’s famed horse farms, but his constituents are primarily government employees.
His committee assignments line up well with his district. He serves on State and Local Government, Health and Welfare, and Banking and Insurance—committees with jurisdiction over most issues dealing with government employees. No other senator serves on as many working committees as Carroll. He is on eight committees, in part, because he lives close to the Capitol, he says.
In this final chapter of his political career, he is best known for his floor speeches on a wide range of subjects, especially education, health care and the budget.
The arena has changed strikingly, however, since Carroll began his political career. The governor no longer dominates the legislative process, nor does one party. Carroll is unaccustomed to being in the minority, in the Republican-controlled Senate, but he is nonetheless involved and persuasive.
“I think he’s effective because he is active,” says Robert Sherman, director of the Kentucky Legislative Research Commission, the staff arm of the legislature. “Julian likes to get into detail. He likes people. He’s an old-time politician in that way. You don’t see much of that now. He can talk. He’s a preacher.
“He has a blend of skills that make him a force, like a force of nature.”
Lowell Reese is the editor and publisher of Kentucky Roll Call, a newsletter on government, politics and business. He lives in Frankfort, Ky.
Smooth as a Flat Rock
The Kentucky senator has seen Bluegrass politics from the statehouse to the governor’s mansion and back again. September 2010
By Lowell Reese
When Kentucky Governor William Goebel was shot to death in 1900—the only American governor ever assassinated while in office—he was succeeded by Lieutenant Governor J.C.W. Beckham. As lieutenant governor, Beckham was also president of the Senate, and a month earlier he had been speaker of the House.
Since then, only one other person has held Kentucky’s top two jobs in the legislative branch and the top two jobs in the executive branch: Julian Carroll. He became speaker at age 37, lieutenant governor and Senate president at 40, governor at 43. Now at 79, he’s halfway through a second term in the Kentucky Senate. And unlike Beckham, no one had to die for him to achieve the milestone.
When Carroll, a Democrat, ran for lieutenant governor and governor in the 1970s, Kentucky’s diversity was a challenge for statewide candidates. There was coal in the east and cotton in the west. Cocktails were served before political rallies in the north, prayers were offered before rallies in the south. Old-fashioned stump speaking and wooing of local courthouse officials were the tools of the trade. In all of those dimensions, Carroll—attorney, orator and lay preacher—was capable and smooth as a flat rock.
Always a leader, Carroll was also often lucky. He was born in western Kentucky, called the “Rock of Gibraltar” in political circles because the region was the state’s largest enclave of Democrats.
Destined for Politics
In 1949, Carroll was elected governor of Kentucky Boys State, a mock-government program for high school students. When Carroll and the other Boys State governors met in Washington, D.C., Vice President Alben Barkley spoke to them. They also met President Harry Truman, who asked the 18-year-old Carroll where he was from. When Carroll replied, “Paducah,” Truman quipped, “Seems like I’ve heard of that town.” It was Barkley’s hometown.
Carroll’s public life reads like the fulfillment of a destiny. After earning a B.A. and then a law degree at the University of Kentucky, he entered the Air Force in 1956. He spent three years in uniform, most of it at Carswell Air Force Base in Fort Worth, Texas, where he was the attorney for the base commander, Brigadier General Nils Olman.
The general was so impressed with Lieutenant Carroll that he held a going-away party for him when he left the service. Generals don’t usually do that. It became a tipping point in Carroll’s career.
When he returned to Paducah in December 1959 to practice law, the local newspaper ran a large article about the general’s party for Carroll. Soon afterward, a delegation of local business leaders came to his law office and asked if he would lead a community effort to pass a referendum to allow the city to buy the Kentucky Utilities facility in town and convert to low-cost electricity from the Tennessee Valley Authority.
Carroll agreed and voters approved the referendum by almost 3-to-1. His name became a household word. He was on his way to a long career in politics with a statewide base of support in the electric utility industry.
Carroll was elected to the Kentucky House of Representatives in 1961. When he arrived at the Capitol in January 1962, Democrats outnumbered Republicans in both chambers, and Democratic Governor Bert T. Combs, like other governors of the period, dominated the legislature. He named the leaders, including committee chairs, and told legislators how to vote, and they complied.
“I remember Governor [Edward T. “Ned”] Breathitt coming to the floor of the House in his first legislative session in 1964,” Carroll says. “Breathitt spoke. The floor leader introduced the governor’s budget. We recessed the House. The budget bill was referred to the Statutes 1 Committee. … which met in the corner of the chamber and reported the bill out while the governor was still on the floor shaking hands. The next day, the bill was voted on and passed out of the House.”
Change Comes
In 1967, Republican Louie B. Nunn won the governor’s office and brought a major change to Carroll’s political fortunes. The House Democrats, still a majority, were now free from gubernatorial control.
Carroll saw it coming. A group of House Democrats called the “Young Turks”—which included now Lexington attorney W. Terry McBrayer—backed him for speaker, a position he held during Nunn’s four-year term.
“We rallied around Julian. He was just a hair older and ahead of us politically,” says McBrayer, who was Carroll’s speaker pro tem in the 1968 session and majority floor leader in the 1970 session. “He was clean, articulate, extremely bright, and he came from the far west where the most Democrat votes were at the time.”
Speaker Carroll made significant changes in the House structure and procedures. Previously, out of 47 standing committees, only two really counted. Bills the governor wanted passed went to Statutes 1, and bills the governor wanted killed went to Statutes 2. There was no danger of reporting a bill out of Statute 2, Carroll says. “It never met.”
Carroll reduced the number of standing committees in the House to 18 and did away with the statutes committees. Most of the standing committees he established are still operating. And he wrote the House and Senate rules that are used today.
The Planets Align
The Republican governor’s term was up in 1971, and former Governor Combs announced he would seek the office again.
Carroll’s friend J.R. Miller, whom he knew from their effort to form the Big Rivers Electric Corporation, told Carroll he was going fishing with Combs in Canada. While they were together, Miller said he planned to ask him to choose Carroll as his running mate for lieutenant governor. Combs agreed, though in those days the governor and lieutenant governor were elected independently.
After the fishing trip, however, Miller switched his support from Combs to Lieutenant Governor Wendell Ford, who was from Miller’s hometown. In the primary, Ford defeated Combs. Carroll won his race and became Ford’s running mate in the fall. “It was not a very friendly relationship,” Carroll says, “but we ran together, and we were both elected.” Ford was term limited, and his people didn’t want Carroll to succeed him. So in 1973, they tried to talk Carroll into running for the U.S. Senate in 1974 against incumbent Republican Marlow Cook.
Instead, Carroll called Robert Strauss in Washington, D.C., the Democrats’ national chairman, and explained how Ford could beat Cook in the Senate race. Strauss agreed and Ford ended up running against Cook and winning. The move made Carroll Kentucky’s 54th governor.
Carroll ran for a full term as governor in 1975 as an incumbent and won.
Defining Events
Carroll faced two momentous events a year and a half apart that helped define his governorship.
In the final weeks of the 1975 election, Louisvillians rioted over the racial issue of forced school busing.
Mayor Harvey Sloane, anticipating destruction of property and potential violence, called the governor, and Carroll sent in 500 state police and the Kentucky National Guard. That broke the riot.
Sloane, a physician and now director of public health for the Washington, D.C.-based Eurasian Medical Education Program, recalls how difficult the decision was for Carroll in context of the election.
“Had there been a poll, only about 10 percent would have favored it,” Sloane says.
Then on May 28, 1977, the Beverly Hills Supper Club fire in Southgate, the third deadliest nightclub fire in U.S. history, killed 165 people. The fire broke out around 9 p.m. Carroll was at the governor’s mansion with Kentucky native and movie star Lee Majors, “The Six Million Dollar Man.”
Carroll left Majors at the mansion and rode up the interstate in a state police car at speeds exceeding 100 mph. Throughout the night, he went from the scene of the tragedy to the hospital to the morgue.
“I watched them carry body bag by body bag out,” Carroll says. “I went down to the gymnasium where they were all laid out.”
Carroll fired the state’s fire marshall and immediately launched an investigation, which led to various reforms.
Roy Stevens, one of Carroll’s top staff officers, helped organize the investigation. He said the fire “brought into clear focus Julian’s finest qualities”—calm in a crisis, compassion for the victims, committed to getting the facts and doing what was needed in making changes.
Playing Each Role Well
While Carroll may have done more for legislative independence than anyone, as governor he exercised the full traditional powers of that office.
“A cockroach couldn’t crawl across the Senate floor without an OK from the governor stamped on its back,” says one observer in the book “New History of Kentucky.”
Representative Jody Richards, former speaker of the House, says Carroll knew how to hold the reins of power tightly. “One quality that made him effective was he knew when to dispense authority and when to use it. He allowed certain members to take home largesse and exercise limited authority from time to time.”
Carroll was persuasive, too. “I was known as ‘the blackboard governor,’ ” he says. On major legislation, he invited legislators to the basement of the mansion where he had set up a large blackboard. “I made my presentations in detail, they asked questions, and when they left, they would be for my bills.”
Carroll is regarded as Kentucky’s last powerful governor. His successor, Democratic Governor John Y. Brown Jr., in the 1980 session, yielded to a rebellious band of Senate Democrats called the “Black Sheep Squadron,” who chose their own leaders. Other reforms to follow would make the legislative and executive branches equal.
In July 1978, the FBI launched an investigation of Carroll and others associated with his administration over leases and contracts. He testified before a grand jury, but was never indicted. He was called as a witness at the trial of another individual and took the Fifth Amendment, which made big news.
“My lawyers wouldn’t let me testify,” Carroll says. “They felt the Justice Department was trying to get me to testify in hopes I would commit perjury, and then they would indict me for that.”
The governors of five other states were being investigated at the same time; four were convicted.
In part, to restore his reputation, Carroll ran for governor again in 1987. Although he lost in the primary in a five-man field, “The thing that race did for me … it cleared my name,” Carroll says.
Eighteen years later, he ran for the state Senate and won.
Different Era
Carroll never returned to Paducah to live after serving as governor. Instead, he bought a 109-acre farm outside of Frankfort, and began practicing law in the capital. As a state senator, his district has some of Kentucky’s famed horse farms, but his constituents are primarily government employees.
His committee assignments line up well with his district. He serves on State and Local Government, Health and Welfare, and Banking and Insurance—committees with jurisdiction over most issues dealing with government employees. No other senator serves on as many working committees as Carroll. He is on eight committees, in part, because he lives close to the Capitol, he says.
In this final chapter of his political career, he is best known for his floor speeches on a wide range of subjects, especially education, health care and the budget.
The arena has changed strikingly, however, since Carroll began his political career. The governor no longer dominates the legislative process, nor does one party. Carroll is unaccustomed to being in the minority, in the Republican-controlled Senate, but he is nonetheless involved and persuasive.
“I think he’s effective because he is active,” says Robert Sherman, director of the Kentucky Legislative Research Commission, the staff arm of the legislature. “Julian likes to get into detail. He likes people. He’s an old-time politician in that way. You don’t see much of that now. He can talk. He’s a preacher.
“He has a blend of skills that make him a force, like a force of nature.”
Lowell Reese is the editor and publisher of Kentucky Roll Call, a newsletter on government, politics and business. He lives in Frankfort, Ky.
August 25, 2010
Five myths about Fancy Farm
The 130th annual Fancy Farm political picnic held in that small Graves County community on the first Saturday in August is now in the books. Great theatre. It was fun and worthwhile. But much of the aura that surrounds it is mythical. My myth-count is five.
1. Somebody in the press always mentions that it kicks off the fall campaigns in Kentucky. That’s one of several exaggerations about the World’s Largest Picnic. If it kicks off the fall political season, why does the county seat of Mayfield not allow any candidate to put up a yard sign in the city limits until Sept. 3 — the Friday before Labor Day?
2. The image of the Fancy Farm Picnic is tightly bound to nostalgic old-timey political speech-making. But there are no Lincoln-Douglas style debates — no even a thoughtful speech. Quality plays second fiddle to theatre. The speakers are rushed through like cattle at a stockyard sale, with two to seven minutes each to put on a show. The politicians are expected to go on stage and act a little crazy — say some bad things they might not say in a normal setting. That can be fun and memorable, and puts a demand on creativity, which Sen. Mitch McConnell has been a master of over the years. But not this year. His scripted message was excellent, but his delivery was mild and perfunctory. All in all, Fancy Farm is a good church fund-raiser, but not much on inspirational speech-making.
3. The Fancy Farm Picnic is a media event, more than a political event. A handful of print and broadcast journalists from Paducah, Lexington and Louisville show up every year — about 15, maybe 20 — and file stories on Fridays and Saturdays that give the event its celebrity aura. The picnic is a creature of the media, more specifically, a creature of the Lexington and Louisville media. Even so, more than half of Kentucky’s 23 daily newspapers printed no stories — zilch — during the weekend of the event this year.
4. How many visitors stand in the August sun, around the Fancy Farm pavilion — or sit under the pavilion’s overhead shelter — to listen to the politicians? The media, unintentionally but dependably, repeat year after year an exaggerated count. For instance, this year a Paducah Sun story prior to the picnic estimated an overall attendance of 15,000, of which 2,000 would listen to the speakers; in a post-picnic story in the same paper, the same writer had 10,000 attending and 3,000 listening. Associated Press used the overall 10,000-attendance figure this year in its report on the event, but gave no estimate of the number who paid attention to the politicians.
I’ve been to more than 20 Fancy Farm picnics, beginning in 1973, and I’ve never seen anything close to 3,000 people listening to the speakers. This year, the crowd was the largest in many years. About 1,200 people stood or circulated around the pavilion, sat in lawn chairs or on table benches; another 300 or so were inside the pavilion, under its shelter.
The 10,000 or 15,000 number, the count of total visitors, has to be an accumulative number of people coming and going on Friday and Saturday. On Saturday afternoon during the political speeches, 5,000 would be a stretch, even this year with attendance up.
5. My conclusion is a bit milder. The Fancy Farm Picnic is a social, political and career opportunity. It’s a place to meet politicos and candidates, to spend time with professional colleagues and friends, and to network. One can make a political statement by simply showing up — or by not showing up. It’s all of those. But hardly to the degree it’s held out to be. Sure, a lot of junkies attend and count the years like notches on a gunslinger’s pistol in the days of the Old West. Elected officials and wannabes mingle with each other, and with donors and voters; and some end up in a news story. Fancy Farm does offer networking benefits. However, very few state legislators attend: maybe 15 or 20. Representatives of the media outnumber legislators. But one can easily have brief, meaningful conversations with 30 or 40 people — and be seen by others. But going to Fancy Farm for the networking? For me, marginal.
##
To read related stories, go to Kentucky Roll Call's main Web site at www.kentuckyrollcall.com. The site is password accessible, but we give free temporary passes to all visitors. Just send an e-mail to reese@kentuckyrollcall.com, and we'll e-mail back to you a free users name and password good for 10 days.
1. Somebody in the press always mentions that it kicks off the fall campaigns in Kentucky. That’s one of several exaggerations about the World’s Largest Picnic. If it kicks off the fall political season, why does the county seat of Mayfield not allow any candidate to put up a yard sign in the city limits until Sept. 3 — the Friday before Labor Day?
2. The image of the Fancy Farm Picnic is tightly bound to nostalgic old-timey political speech-making. But there are no Lincoln-Douglas style debates — no even a thoughtful speech. Quality plays second fiddle to theatre. The speakers are rushed through like cattle at a stockyard sale, with two to seven minutes each to put on a show. The politicians are expected to go on stage and act a little crazy — say some bad things they might not say in a normal setting. That can be fun and memorable, and puts a demand on creativity, which Sen. Mitch McConnell has been a master of over the years. But not this year. His scripted message was excellent, but his delivery was mild and perfunctory. All in all, Fancy Farm is a good church fund-raiser, but not much on inspirational speech-making.
3. The Fancy Farm Picnic is a media event, more than a political event. A handful of print and broadcast journalists from Paducah, Lexington and Louisville show up every year — about 15, maybe 20 — and file stories on Fridays and Saturdays that give the event its celebrity aura. The picnic is a creature of the media, more specifically, a creature of the Lexington and Louisville media. Even so, more than half of Kentucky’s 23 daily newspapers printed no stories — zilch — during the weekend of the event this year.
4. How many visitors stand in the August sun, around the Fancy Farm pavilion — or sit under the pavilion’s overhead shelter — to listen to the politicians? The media, unintentionally but dependably, repeat year after year an exaggerated count. For instance, this year a Paducah Sun story prior to the picnic estimated an overall attendance of 15,000, of which 2,000 would listen to the speakers; in a post-picnic story in the same paper, the same writer had 10,000 attending and 3,000 listening. Associated Press used the overall 10,000-attendance figure this year in its report on the event, but gave no estimate of the number who paid attention to the politicians.
I’ve been to more than 20 Fancy Farm picnics, beginning in 1973, and I’ve never seen anything close to 3,000 people listening to the speakers. This year, the crowd was the largest in many years. About 1,200 people stood or circulated around the pavilion, sat in lawn chairs or on table benches; another 300 or so were inside the pavilion, under its shelter.
The 10,000 or 15,000 number, the count of total visitors, has to be an accumulative number of people coming and going on Friday and Saturday. On Saturday afternoon during the political speeches, 5,000 would be a stretch, even this year with attendance up.
5. My conclusion is a bit milder. The Fancy Farm Picnic is a social, political and career opportunity. It’s a place to meet politicos and candidates, to spend time with professional colleagues and friends, and to network. One can make a political statement by simply showing up — or by not showing up. It’s all of those. But hardly to the degree it’s held out to be. Sure, a lot of junkies attend and count the years like notches on a gunslinger’s pistol in the days of the Old West. Elected officials and wannabes mingle with each other, and with donors and voters; and some end up in a news story. Fancy Farm does offer networking benefits. However, very few state legislators attend: maybe 15 or 20. Representatives of the media outnumber legislators. But one can easily have brief, meaningful conversations with 30 or 40 people — and be seen by others. But going to Fancy Farm for the networking? For me, marginal.
##
To read related stories, go to Kentucky Roll Call's main Web site at www.kentuckyrollcall.com. The site is password accessible, but we give free temporary passes to all visitors. Just send an e-mail to reese@kentuckyrollcall.com, and we'll e-mail back to you a free users name and password good for 10 days.
July 18, 2010
Koppel and Krauthammer on national debt
The national debt of the United States today is $13.2 trillion and by some estimates that will grow in the next 15 to 20 years to $34 trillion. Ted Koppel, former anchor of "Nightline," speaking at a Kentucky Chamber of Commerce event earlier this week in Louisville, said, "I believe that the deficit in front of us is the greatest danger that the United States has ever faced."
How much is a trillion dollars? Koppel said, imagine a business that started the day Christ was born, and run by idiots (who worked hard, however), and the business lost $1 million the first day. And it lost $1 million every day for a year, and for a thousand years, and for two thousand years (today) -- it still would not have lost $1 trillion. It would be another thousand years before the business lost $1 trillion. Koppel's point: We cannot grow our way out of this. The four choices are: (1) borrow more, (2) raise taxes, (3) cut spending, or (4) print more money. which would fuel inflation.
While Koppel called the deficit (national debt) the “greatest danger,” nationally syndicated columnist Charles Krauthammer, in a column a few days after Koppel’s remark, wrote that the nation’s debt “will necessitate huge tax increases.”
Krauthammer noted that the real money in the federal budget goes to entitlements, most specifically Medicare and Medicaid, and “Obamacare freezes these out as a source of debt reduction. Obamacare’s $500 billion in Medicare cuts and $600 billion in tax increases are siphoned away for a new entitlement — and no longer available for deficit reduction.
“The result? There just isn’t enough to cut elsewhere to prevent national insolvency. That will require massive tax increases — most likely a European-style value-added tax. Just as President Reagan cut taxes to starve the federal government and prevent massive growth in spending, Obama’s wild spending — and quarantining health-care costs from providing possible relief — will necessitate huge tax increases.”
Kentucky Roll Call’s observation on what Koppel and Krauthammer are telling us: The people we elected over the years, Democrats and Republicans, have created a situation that ultimately will leave only one way to avoid the dismantling of America — a massive tax increase.
How much is a trillion dollars? Koppel said, imagine a business that started the day Christ was born, and run by idiots (who worked hard, however), and the business lost $1 million the first day. And it lost $1 million every day for a year, and for a thousand years, and for two thousand years (today) -- it still would not have lost $1 trillion. It would be another thousand years before the business lost $1 trillion. Koppel's point: We cannot grow our way out of this. The four choices are: (1) borrow more, (2) raise taxes, (3) cut spending, or (4) print more money. which would fuel inflation.
While Koppel called the deficit (national debt) the “greatest danger,” nationally syndicated columnist Charles Krauthammer, in a column a few days after Koppel’s remark, wrote that the nation’s debt “will necessitate huge tax increases.”
Krauthammer noted that the real money in the federal budget goes to entitlements, most specifically Medicare and Medicaid, and “Obamacare freezes these out as a source of debt reduction. Obamacare’s $500 billion in Medicare cuts and $600 billion in tax increases are siphoned away for a new entitlement — and no longer available for deficit reduction.
“The result? There just isn’t enough to cut elsewhere to prevent national insolvency. That will require massive tax increases — most likely a European-style value-added tax. Just as President Reagan cut taxes to starve the federal government and prevent massive growth in spending, Obama’s wild spending — and quarantining health-care costs from providing possible relief — will necessitate huge tax increases.”
Kentucky Roll Call’s observation on what Koppel and Krauthammer are telling us: The people we elected over the years, Democrats and Republicans, have created a situation that ultimately will leave only one way to avoid the dismantling of America — a massive tax increase.
July 12, 2010
Tea Party slate for governor
The climate and culture in Washington and the characters on Wall Street created a ‘condition’ for the Tea Party to sprout and grow like a plant that flourishes in one soil or climate and droops in another. It grew; it wasn’t manufactured.
Now some of the activists — in effect, leaders — of the Tea Party in Kentucky seem to think that condition also exists in Frankfort. They are putting together a gubernatorial slate to run in the governor’s race year. David Adams told Kentucky Roll Call today in an email that some Tea Party activists are “close to putting together a gubernatorial slate to ensure regular Kentuckians' voices are heard in the Commonwealth. … Details should be available soon."
Adams was replying to my inquiry to one of his fellow Tea Party activists, after I had gotten wind of the possible gubernatorial slate. Adams is chairman of Rand Paul’s campaign for the U.S. Senate. In a telephone interview with me following his email, Adams said his statement and details about the slate, which he will release soon, are from him as an “individual activist” in the Tea Party — and not in his capacity with the Paul campaign.
While we don’t know yet whether the so-called Tea Party slate would try to run under the Republican banner in the 2001 gubernatorial primary, that’s a reasonable expectation.
Adams said the Tea Party’s greatest strength “is its lack of formal organization.” So, how would they go about backing a gubernatorial slate? Apparently, they would do it the same way they got behind Rand Paul. Some of the Tea Party activists in the major cities, and a few other places, conferred and agreed to back Paul.
If the Tea Party remains as viable through next year’s primary election as it seems to be today, this could dramatically alter the governor’s race, especially in the GOP primary. Richie Farmer would not get the nod — he’s not philosophically driven. David Williams supported Rand Paul in the primary, and this could serious alter that relationship in the fall. And, given the media amplification, it could even have a much larger meaning, especially if Paul wins in November.
##
To read related stories, go to Kentucky Roll Call's main Web site at www.kentuckyrollcall.com. The site is password accessible, but we give free temporary passes to all visitors. Just send an e-mail to reese@kentuckyrollcall.com, and we'll e-mail back to you a free users name and password good for 10 days.
Now some of the activists — in effect, leaders — of the Tea Party in Kentucky seem to think that condition also exists in Frankfort. They are putting together a gubernatorial slate to run in the governor’s race year. David Adams told Kentucky Roll Call today in an email that some Tea Party activists are “close to putting together a gubernatorial slate to ensure regular Kentuckians' voices are heard in the Commonwealth. … Details should be available soon."
Adams was replying to my inquiry to one of his fellow Tea Party activists, after I had gotten wind of the possible gubernatorial slate. Adams is chairman of Rand Paul’s campaign for the U.S. Senate. In a telephone interview with me following his email, Adams said his statement and details about the slate, which he will release soon, are from him as an “individual activist” in the Tea Party — and not in his capacity with the Paul campaign.
While we don’t know yet whether the so-called Tea Party slate would try to run under the Republican banner in the 2001 gubernatorial primary, that’s a reasonable expectation.
Adams said the Tea Party’s greatest strength “is its lack of formal organization.” So, how would they go about backing a gubernatorial slate? Apparently, they would do it the same way they got behind Rand Paul. Some of the Tea Party activists in the major cities, and a few other places, conferred and agreed to back Paul.
If the Tea Party remains as viable through next year’s primary election as it seems to be today, this could dramatically alter the governor’s race, especially in the GOP primary. Richie Farmer would not get the nod — he’s not philosophically driven. David Williams supported Rand Paul in the primary, and this could serious alter that relationship in the fall. And, given the media amplification, it could even have a much larger meaning, especially if Paul wins in November.
##
To read related stories, go to Kentucky Roll Call's main Web site at www.kentuckyrollcall.com. The site is password accessible, but we give free temporary passes to all visitors. Just send an e-mail to reese@kentuckyrollcall.com, and we'll e-mail back to you a free users name and password good for 10 days.
June 21, 2010
Hal Rogers made dent in Rand Paul's margin
In last month’s GOP primary for the U.S. Senate, U.S. Rep. Hal Rogers, R-Somerset, dean of Kentucky’s Washington delegation, did more than just endorse Trey Grayson. The election results suggest that Rogers actually plowed the fertile R-soil in the 5th CD for Grayson — and made a difference, although not enough to overcome the Rand Paul wave. Of the 29 counties in Rogers’ district, Grayson won eight, while in the state’s other 91 counties, he won only three (Casey, Crittenden, Fulton).
Another telling statistic: while voter turnout statewide in the Republican primary for the Senate race was 33.7 percent, in the 5th CD, it was 42.1 percent. That was an anomaly. Mountain counties almost always trail the state in turnout. It highly suggests a strong get-out-the-vote effort by Rogers. Still, Rand beat Grayson on Rogers’ turf, 54.9 percent to 45.1 percent.
A total of 87,227 Republicans voted in the 5th CD, which was 24.8 percent of the statewide Republican vote (in the U.S. Senate race). This debunks the myth recently repeated more than once by the national media — that the 5th CD has half of the votes in a Kentucky GOP primary.
In fact, 5th CD is no longer the runaway leader in Republican votes. There were 207,193 registered Rs in Rogers’ district on May 18. The 4th CD — the Ohio River counties from Oldham to Boyd — is right on the heels of Rogers’ district with 195,236 registered Rs. The 4th CD is Grayson’s home region. Rand Paul won it in a landslide, 65.3 percent to 31.4 percent, winning each of the 24 counties. Turnout in the 4th CD was 32.4 percent, a little below the statewide average.
This brings to mind: Will Rogers really push hard for the election of Rand Paul in the general election? The intensity of Rogers’ efforts could make the difference in a close statewide race. The late Wendell Butler, the state agriculture commission and holder of other musical chairs of the day, once told me a story about the pioneers in the Conestoga wagons on the Oregon Trail: “When a wagon got stuck in the mud, and the men folks put their shoulders to it to push … just because you’re gruntin’ doesn’t mean you’re pushin’.” We shall see. Or, will we?
Another telling statistic: while voter turnout statewide in the Republican primary for the Senate race was 33.7 percent, in the 5th CD, it was 42.1 percent. That was an anomaly. Mountain counties almost always trail the state in turnout. It highly suggests a strong get-out-the-vote effort by Rogers. Still, Rand beat Grayson on Rogers’ turf, 54.9 percent to 45.1 percent.
A total of 87,227 Republicans voted in the 5th CD, which was 24.8 percent of the statewide Republican vote (in the U.S. Senate race). This debunks the myth recently repeated more than once by the national media — that the 5th CD has half of the votes in a Kentucky GOP primary.
In fact, 5th CD is no longer the runaway leader in Republican votes. There were 207,193 registered Rs in Rogers’ district on May 18. The 4th CD — the Ohio River counties from Oldham to Boyd — is right on the heels of Rogers’ district with 195,236 registered Rs. The 4th CD is Grayson’s home region. Rand Paul won it in a landslide, 65.3 percent to 31.4 percent, winning each of the 24 counties. Turnout in the 4th CD was 32.4 percent, a little below the statewide average.
This brings to mind: Will Rogers really push hard for the election of Rand Paul in the general election? The intensity of Rogers’ efforts could make the difference in a close statewide race. The late Wendell Butler, the state agriculture commission and holder of other musical chairs of the day, once told me a story about the pioneers in the Conestoga wagons on the Oregon Trail: “When a wagon got stuck in the mud, and the men folks put their shoulders to it to push … just because you’re gruntin’ doesn’t mean you’re pushin’.” We shall see. Or, will we?
March 10, 2010
Rollback legislators’ uber-rich pensions
In the 2005 session of the Kentucky General Assembly, legislators made a bold raid on the public treasury. In a planned maneuver during the chaos caused by the logjam of bills in the closing days of the session, they sneaked through a bill (HB 299) without a public hearing. It enriched their own pensions so much, it made the infamous 1982 “greed bill” look like chicken feed.
As a result of the 2005 bill, for example, Rep. Harry Moberly is guaranteed a legislative pension of at least $168,686 a year, former Rep. J.R. Gray, is drawing an equivalent of around $400,000 a year as secretary of the Labor Cabinet, and House Speaker Greg Stumbo is locked in to a legislative pension of $98,824 a year* — all for working part-time as a member of the state Legislature. These are a few of the richest examples. Other enrichments, and potential enrichments, courtesy of the public treasury, exist in abundance. A detailed explanation of how the legislator’s retirement plan works is posted at www.kentuckyrollcall.com, archive, September 2009.
Gov. Steve Beshear took advantage of the legislators’ run-away greed last year by using their pensions to lure two GOP senators out of their elected seats, so the Democrats could try to win them in special elections — and, from there, possibly capture control of the Senate. Beshear gave Sens. Charlie Border and Dan Kelly state jobs. Borders went to the Public Service Commission as a commissioner at $117,000 a year. Kelly was handed a judgeship at $123,384 a year. But more than the salary or career change, it was, seemingly, about their pensions.
Under the 2005 bill, legislators who were serving in the General Assembly at that time or afterward are allowed to base their legislative pensions on the salary of a government job held once they leave the Legislature — or, before they came.
Borders’ ‘high-3’ salary as a legislator was $43,594 a year, and Kelly’s was $55,238 a year. Using their state jobs to figure their legislative pensions, instead of their part-time jobs at the Legislature, Borders’ picks up an estimated $1 million or more and Kelly an estimated $2.3 million, depending on whether they purchased extra years of service (not revealed to the public by law) and live to their life expectancy age.
What Beshear, Borders and Kelly pulled off, future governors can repeat, unless the 2005 law is rolled back. As it now stands, any legislator approaching retirement can be incessantly tortured by a temptation to yield on principles and vote for controversial bills backed by the governor. It could lead to a high-paying state job and an extra million dollars, payable monthly in his Golden Years.
The governor’s plan with Borders and Kelly fell short. The Democrats took the seat Borders vacated, but not Kelly’s. In Kelly’s senatorial district, Republican Jimmy Higdon, a House member from Lebanon, defeated the Democrats’ nominee, Jodie Haydon of Bardstown. Higdon won big, despite Haydon’s huge advantages in both voter registration and campaign funds. Kelly was an element in the election, but not a high profile one, in part because Higdon in 2005 had voted against the greed bill — and he had pre-filed legislation to roll it back.
Once Sen. Higdon was sworn in, he followed up on his rollback pledge by introducing SB 51, which passed the Senate 21-17 on Jan. 13 on a straight party-line vote. Sen. Bob Leeper, the independent, voted with the majority.
Upon its arrival in the House, SB 51 was assigned to the State Government Committee, and the committee chairman, Rep. Mike Cherry, D-Princeton, is expected of hold a hearing on the bill after the budget clears the House. Cherry’s committee is expected to vote to rollback the 2005 law, but have it apply only to legislators elected in the future. That is, all members of the General Assembly who served from 2005 through 2010 would be grandfathered in.
If Higdon’s bill passes the Democrat-controlled House, it would go back to the Senate for concurrence. That would likely throw the bill into a conference committee to iron out differences between the two versions. The most likely outcome is, the conferees won’t agree, the clock kills the bill, and legislators (with rare exceptions) go home happy about it.
The legislators’ retirement compensation right now is a big chocolate milk cow, which the public is feeding but is generally not aware of its existence. And shy of a public outcry, legislators will continue milking it, because the mainstream media, including Comment on Kentucky, has basically ignored the issue.
° Speaker Stumbo was Attorney General in 2005, and not in the Legislature when the pension-enrichment bill was enacted. However, when he returned to the Legislature in February 2008, he became eligible to calculate his legislative pension on his Attorney General salary, an estimated windfall of roughly $1.2 million. The Speaker would lose his windfall under SB 51, unless he rushed across town to the office of the legislators’ retirement plan and signed up to start drawing his legislative pension before the ink dried on the governor’s signature.
To read related stories, go to Kentucky Roll Call's main Web site at www.kentuckyrollcall.com. See Archives for July, August and September 2009. The site is password accessible, but we give free temporary passes to all visitors. Just send us an e-mail, to reese@kentuckyrollcall.com, and we'll e-mail you a free users name and password good for 10 days.
As a result of the 2005 bill, for example, Rep. Harry Moberly is guaranteed a legislative pension of at least $168,686 a year, former Rep. J.R. Gray, is drawing an equivalent of around $400,000 a year as secretary of the Labor Cabinet, and House Speaker Greg Stumbo is locked in to a legislative pension of $98,824 a year* — all for working part-time as a member of the state Legislature. These are a few of the richest examples. Other enrichments, and potential enrichments, courtesy of the public treasury, exist in abundance. A detailed explanation of how the legislator’s retirement plan works is posted at www.kentuckyrollcall.com, archive, September 2009.
Gov. Steve Beshear took advantage of the legislators’ run-away greed last year by using their pensions to lure two GOP senators out of their elected seats, so the Democrats could try to win them in special elections — and, from there, possibly capture control of the Senate. Beshear gave Sens. Charlie Border and Dan Kelly state jobs. Borders went to the Public Service Commission as a commissioner at $117,000 a year. Kelly was handed a judgeship at $123,384 a year. But more than the salary or career change, it was, seemingly, about their pensions.
Under the 2005 bill, legislators who were serving in the General Assembly at that time or afterward are allowed to base their legislative pensions on the salary of a government job held once they leave the Legislature — or, before they came.
Borders’ ‘high-3’ salary as a legislator was $43,594 a year, and Kelly’s was $55,238 a year. Using their state jobs to figure their legislative pensions, instead of their part-time jobs at the Legislature, Borders’ picks up an estimated $1 million or more and Kelly an estimated $2.3 million, depending on whether they purchased extra years of service (not revealed to the public by law) and live to their life expectancy age.
What Beshear, Borders and Kelly pulled off, future governors can repeat, unless the 2005 law is rolled back. As it now stands, any legislator approaching retirement can be incessantly tortured by a temptation to yield on principles and vote for controversial bills backed by the governor. It could lead to a high-paying state job and an extra million dollars, payable monthly in his Golden Years.
The governor’s plan with Borders and Kelly fell short. The Democrats took the seat Borders vacated, but not Kelly’s. In Kelly’s senatorial district, Republican Jimmy Higdon, a House member from Lebanon, defeated the Democrats’ nominee, Jodie Haydon of Bardstown. Higdon won big, despite Haydon’s huge advantages in both voter registration and campaign funds. Kelly was an element in the election, but not a high profile one, in part because Higdon in 2005 had voted against the greed bill — and he had pre-filed legislation to roll it back.
Once Sen. Higdon was sworn in, he followed up on his rollback pledge by introducing SB 51, which passed the Senate 21-17 on Jan. 13 on a straight party-line vote. Sen. Bob Leeper, the independent, voted with the majority.
Upon its arrival in the House, SB 51 was assigned to the State Government Committee, and the committee chairman, Rep. Mike Cherry, D-Princeton, is expected of hold a hearing on the bill after the budget clears the House. Cherry’s committee is expected to vote to rollback the 2005 law, but have it apply only to legislators elected in the future. That is, all members of the General Assembly who served from 2005 through 2010 would be grandfathered in.
If Higdon’s bill passes the Democrat-controlled House, it would go back to the Senate for concurrence. That would likely throw the bill into a conference committee to iron out differences between the two versions. The most likely outcome is, the conferees won’t agree, the clock kills the bill, and legislators (with rare exceptions) go home happy about it.
The legislators’ retirement compensation right now is a big chocolate milk cow, which the public is feeding but is generally not aware of its existence. And shy of a public outcry, legislators will continue milking it, because the mainstream media, including Comment on Kentucky, has basically ignored the issue.
° Speaker Stumbo was Attorney General in 2005, and not in the Legislature when the pension-enrichment bill was enacted. However, when he returned to the Legislature in February 2008, he became eligible to calculate his legislative pension on his Attorney General salary, an estimated windfall of roughly $1.2 million. The Speaker would lose his windfall under SB 51, unless he rushed across town to the office of the legislators’ retirement plan and signed up to start drawing his legislative pension before the ink dried on the governor’s signature.
To read related stories, go to Kentucky Roll Call's main Web site at www.kentuckyrollcall.com. See Archives for July, August and September 2009. The site is password accessible, but we give free temporary passes to all visitors. Just send us an e-mail, to reese@kentuckyrollcall.com, and we'll e-mail you a free users name and password good for 10 days.
February 15, 2010
Major power grab by Legislature
Following tradition, Gov. Steve Beshear last month presented to the Legislature his proposed biennial budget for the commonwealth. He proposed to balance the budget with nearly $800 million in revenue from slot machines at racetracks. But the slots issue requires separate legislation, a very long shot at best.
Therefore, House Speaker Greg Stumbo and Senate President David Williams, without hesitation, declared the governor's budget to be dead on arrival. And for the first time ever, the Legislature will write the state budget. This is huge! a sweeping shift of power to the Legislature.
The General Assembly began its quest for independence from the governor in 1980, a quest it has gradually achieved. With this latest development, the Legislature would rise considerably above of the governor on the power equation.
While lawmakers would balance the state's finances in ways yet undetermined, including likely major tax reform, they would undo the balance of power. Beneficiaries of the golden rule, "He who has the gold (or controls it), makes the rules," future lawmakers would rule state government.
The governor, Speaker Greg Stumbo said, has thus far made no personal efforts with members of the House to promote or defend his budget.
The governor was elected to set the priorities for the state -- a responsibility that Beshear seems willing to abdicate. If so, abdication of duty may very well be what defines him throughout history.
Stumbo calls what's happening a "defining moment for the General Assembly." Once lawmakers take control of the entire budget process, as CNHI News Service reporter Ronnie Ellis wrote in a story Friday, "they aren't going to give it back -- to this or to future governors." In an interview with Ellis, Stumbo said: "Once the genie is out of the bottle you can't put it back in."
To visit Kentucky Roll Call's main Web site, click here.
Therefore, House Speaker Greg Stumbo and Senate President David Williams, without hesitation, declared the governor's budget to be dead on arrival. And for the first time ever, the Legislature will write the state budget. This is huge! a sweeping shift of power to the Legislature.
The General Assembly began its quest for independence from the governor in 1980, a quest it has gradually achieved. With this latest development, the Legislature would rise considerably above of the governor on the power equation.
While lawmakers would balance the state's finances in ways yet undetermined, including likely major tax reform, they would undo the balance of power. Beneficiaries of the golden rule, "He who has the gold (or controls it), makes the rules," future lawmakers would rule state government.
The governor, Speaker Greg Stumbo said, has thus far made no personal efforts with members of the House to promote or defend his budget.
The governor was elected to set the priorities for the state -- a responsibility that Beshear seems willing to abdicate. If so, abdication of duty may very well be what defines him throughout history.
Stumbo calls what's happening a "defining moment for the General Assembly." Once lawmakers take control of the entire budget process, as CNHI News Service reporter Ronnie Ellis wrote in a story Friday, "they aren't going to give it back -- to this or to future governors." In an interview with Ellis, Stumbo said: "Once the genie is out of the bottle you can't put it back in."
To visit Kentucky Roll Call's main Web site, click here.
January 5, 2010
Democrats' executive director has resigned
Kyle Cox, an Indiana native and former Obama campaign staffer, became the only paid full-time executive director of the Kentucky Democratic Party in the party's history who was not born in Kentucky. Cox resigned, effective Jan. 1, 2010. State Democratic headquarters will be sending out a press release about Cox's resignation late this afternoon or tomorrow.
Cox and the state Democratic Party (as well as the national Democratic Party and consultants) drew severe criticism from many inner-circle Kentucky Democrats in the wake of losing the special election last month in state Senate District 14 to Republican Jimmy Higdon. The complaints centered on charges of bad polling, bad TV ads, inadequate spending of the campaign's massive financial resources, and for establishing a tone for the campaign that did not reflect the personality and character of the party's nominee, Jodie Haydon, and did not adequately involve Democratic leaders at the grassroots.
To visit Kentucky Roll Call's main Web site, click here.
Cox and the state Democratic Party (as well as the national Democratic Party and consultants) drew severe criticism from many inner-circle Kentucky Democrats in the wake of losing the special election last month in state Senate District 14 to Republican Jimmy Higdon. The complaints centered on charges of bad polling, bad TV ads, inadequate spending of the campaign's massive financial resources, and for establishing a tone for the campaign that did not reflect the personality and character of the party's nominee, Jodie Haydon, and did not adequately involve Democratic leaders at the grassroots.
To visit Kentucky Roll Call's main Web site, click here.
Democrats tap Mills for Feb. 2 special election
Editor's note: The following is the full text of a press release Feb. 5, 2010, from the Kentucky Democratic Party.
Terry Mills, Lebanon, is the Democratic candidate for the House of Representatives in District 24, which covers Marion, Casey and part of Pulaski Counties. It is the seat formerly held by Jimmy Higdon who was elected to the State Senate last month. The special election will take place on February 2.
Mills retired after a 35-year career with the Social Security Administration serving Marion, Casey and six surrounding counties. This is his first run for public office. He was selected unanimously by the Democratic Executive Committee members of the three counties at a convention in Lebanon last night.
“I was overwhelmed by the support I received at the nominating convention,” Mills said. “We had an enormous crowd with some people driving 80 miles on a freezing night. I feel good and am working the phones today and am ready to hit the pavement and knock on doors.”
“I am seeking this office because I have a strong desire to serve my community. If elected, I will bring an objective, independent look to all issues,” Mills said. “I really believe the fact that I have never served in Frankfort will be an advantage for the people of this district. The only commitment I will have is to serve the people of the 24th District.”
Mills, 59, graduated from Western Kentucky University in 1973 with a degree in Business Administration. He and his wife Patty have been married for 39 years and have three children and four grandchildren. He retired as Acting District Manager of the Campbellsville Social Security office in 2007. ###
To visit Kentucky Roll Call's main Web site, click here.
Terry Mills, Lebanon, is the Democratic candidate for the House of Representatives in District 24, which covers Marion, Casey and part of Pulaski Counties. It is the seat formerly held by Jimmy Higdon who was elected to the State Senate last month. The special election will take place on February 2.
Mills retired after a 35-year career with the Social Security Administration serving Marion, Casey and six surrounding counties. This is his first run for public office. He was selected unanimously by the Democratic Executive Committee members of the three counties at a convention in Lebanon last night.
“I was overwhelmed by the support I received at the nominating convention,” Mills said. “We had an enormous crowd with some people driving 80 miles on a freezing night. I feel good and am working the phones today and am ready to hit the pavement and knock on doors.”
“I am seeking this office because I have a strong desire to serve my community. If elected, I will bring an objective, independent look to all issues,” Mills said. “I really believe the fact that I have never served in Frankfort will be an advantage for the people of this district. The only commitment I will have is to serve the people of the 24th District.”
Mills, 59, graduated from Western Kentucky University in 1973 with a degree in Business Administration. He and his wife Patty have been married for 39 years and have three children and four grandchildren. He retired as Acting District Manager of the Campbellsville Social Security office in 2007. ###
To visit Kentucky Roll Call's main Web site, click here.
November 21, 2009
Rudderless national debt
Earlier in his tenure as vice president, Dick Cheney said, “Deficits don’t matter.” That’s like saying “the tax burden doesn’t matter.” Taxation is only one of three parts of the tax burden, the others being debt and inflation: the two big hidden taxes.
No wonder the Republicans lost control of Congress, given that kind of dumbness. They drifted from the party’s principles during the George W. Bush years, and, with Bush’s encouragement, went on a multi-year spending spree, after which, the voters kicked enough of them out of office to give the Democrats a chance run the zoo.
Talk about a transformation from the frying pan into the fire! Consider the following from an editorial Nov. 15 in The Paducah Sun: “The federal deficit for the month of October set a new record: $176 billion. That one-month addition to the nation’s massive debt load tops the deficit for the entire year of 2007. The October deficit holds another distinction: It is the first for which President Obama must bear full responsibility.”
More from the Sun editorial, “Just the interest on the October debt hit $18 billion.” That would run Kentucky state government two years.
The total deficit for FY2009 was $1.42 trillion, nearly a trillion over the record deficit of $454.8 billion set a year earlier … more than three times the most red ink ever amassed in a single year. It’s more than the total national debt for the first 200 years of the republic, and almost as much as Canada’s entire economy.
Harvard professor Kenneth Rogoff, the chief economist for the International Monetary Fund, told the AP last month that this “rudderless U.S. fiscal policy is the biggest risk to the U.S. economy,” and “as we accumulate more and more debt, we leave ourselves very vulnerable.”
Forecasts of red ink indicate that within a decade, of every dollar we send to Washington, 15 cents will go pay the interest on the debt, up form 5 cent this fiscal year. The government’s total debt, experts say, could quadruple to $17.1 billion by 2019.
Already, we paid $190 billion in interest in the last 12 months to finance the federal debt, and that could increase to $600 billion in the next decade, as the nation’s debt, as held by investors -- including a major chunk held by China -- increases. The Congressional Budget Office projects that the nation’s debt held by investors will increase by $9.1 trillion in the next decade.
An illustration of this problem surfaced this past week in a news story by McClatchy Newspapers on President Barack Obama’s four-nation Asian tour, which included a three-day visit to China. The Chinese gave no ground on major issues from the currency rate and human rights to global warming and nuclear containment, because Obama “has little leverage over China, in part because the U.S. depends on the Chinese to finance the U.S. government’s growing debt, and because of the perception in China — which for years was an economic nonentity — that the U.S. is troubled and China is ascendant.”
The McClatchy story, which ran Nov. 18 on the front page of The Courier-Journal, said, “China has helped keep the American economy afloat through the recession. Its huge trade surplus with the United States — and the $800 billion worth of American government debt that it holds — is economically unsustainable and leaves the U.S. dependent on Beijing’s financial favor, however.”
What difference does it make, the national debt? Here’s the point: Beyond the increased tax burden, no person can be strong and productive — not at his or her peak performance — under a heavy burden of debt. Nor can a nation.
No wonder the Republicans lost control of Congress, given that kind of dumbness. They drifted from the party’s principles during the George W. Bush years, and, with Bush’s encouragement, went on a multi-year spending spree, after which, the voters kicked enough of them out of office to give the Democrats a chance run the zoo.
Talk about a transformation from the frying pan into the fire! Consider the following from an editorial Nov. 15 in The Paducah Sun: “The federal deficit for the month of October set a new record: $176 billion. That one-month addition to the nation’s massive debt load tops the deficit for the entire year of 2007. The October deficit holds another distinction: It is the first for which President Obama must bear full responsibility.”
More from the Sun editorial, “Just the interest on the October debt hit $18 billion.” That would run Kentucky state government two years.
The total deficit for FY2009 was $1.42 trillion, nearly a trillion over the record deficit of $454.8 billion set a year earlier … more than three times the most red ink ever amassed in a single year. It’s more than the total national debt for the first 200 years of the republic, and almost as much as Canada’s entire economy.
Harvard professor Kenneth Rogoff, the chief economist for the International Monetary Fund, told the AP last month that this “rudderless U.S. fiscal policy is the biggest risk to the U.S. economy,” and “as we accumulate more and more debt, we leave ourselves very vulnerable.”
Forecasts of red ink indicate that within a decade, of every dollar we send to Washington, 15 cents will go pay the interest on the debt, up form 5 cent this fiscal year. The government’s total debt, experts say, could quadruple to $17.1 billion by 2019.
Already, we paid $190 billion in interest in the last 12 months to finance the federal debt, and that could increase to $600 billion in the next decade, as the nation’s debt, as held by investors -- including a major chunk held by China -- increases. The Congressional Budget Office projects that the nation’s debt held by investors will increase by $9.1 trillion in the next decade.
An illustration of this problem surfaced this past week in a news story by McClatchy Newspapers on President Barack Obama’s four-nation Asian tour, which included a three-day visit to China. The Chinese gave no ground on major issues from the currency rate and human rights to global warming and nuclear containment, because Obama “has little leverage over China, in part because the U.S. depends on the Chinese to finance the U.S. government’s growing debt, and because of the perception in China — which for years was an economic nonentity — that the U.S. is troubled and China is ascendant.”
The McClatchy story, which ran Nov. 18 on the front page of The Courier-Journal, said, “China has helped keep the American economy afloat through the recession. Its huge trade surplus with the United States — and the $800 billion worth of American government debt that it holds — is economically unsustainable and leaves the U.S. dependent on Beijing’s financial favor, however.”
What difference does it make, the national debt? Here’s the point: Beyond the increased tax burden, no person can be strong and productive — not at his or her peak performance — under a heavy burden of debt. Nor can a nation.
November 12, 2009
Possible special session in December
Gov. Steve Beshear has told legislative leaders to keep the week of Dec. 14 open for a possible special session, according to the The Kentucky Gazette, which reported the scoop this afternoon on its Web site (www.kentuckygazette.com). The paper quotes Senate President David Williams and Senate Minority Leader Ed Worley as sources.
After interviewing Williams and Worley today, Gazette Editor Laura Glasscock called the governor’s press office for additional information. The spokesperson for the governor, Jill Midkiff, would neither confirm nor deny the story.
The special session would come one week after the Dec. 8 special election in Senate Dist. 14 to fill a seat vacated by Dan Kelly, R, who was appointed circuit judge last month by the governor — a move to give the Democrats a chance to pick up an additional Senate seat.
Expanded gambling interests heavily support the Democratic nominee in that race, Jodie Haydon of Bardstown, who favors their issue. If Haydon defeats the Republican nominee, Rep. Jimmy Higdon of Lebanon, it would close the GOP’s advantage in the Senate to 19-18 (and one Independent).
The timing of the special session raises the question of the governor’s intent in calling it (if he does). Is it to push a bill through legislature to authorize video slots machines at racetrack before the General Assembly convenes Jan. 5? Slots may or may not end up on the agenda, but it’s not the out-front issue.
Sen. Worley told the Gazette the topic of the special session would be an economic incentives package for the possible relocation of a Harley-Davidson motorcycle plant to Shelbyville.
Harley-Davidson, based in Milwaukee, is considering relocating a manufacturing operation from York, Pa. and building a retail establishment in Shelbyville. Its board meets “the first of December,” and if they finalize the move to Shelbyville, it would “involve a large industrial revenue bond” that would be outside the scope of the executive branch, Worley said.
A source told Kentucky Roll Call that the timing of the special session relates to the situation with Harley-Davidson in Pennsylvania. By acting in December, Kentucky could possibly close the deal before year’s end — ahead of the Pennsylvania legislature convening in January and trying to block the move via richer incentives. The source said the governor does not intend to muddle up the special session with the gambling issue, which is too controversial to pass in December anyway.
After interviewing Williams and Worley today, Gazette Editor Laura Glasscock called the governor’s press office for additional information. The spokesperson for the governor, Jill Midkiff, would neither confirm nor deny the story.
The special session would come one week after the Dec. 8 special election in Senate Dist. 14 to fill a seat vacated by Dan Kelly, R, who was appointed circuit judge last month by the governor — a move to give the Democrats a chance to pick up an additional Senate seat.
Expanded gambling interests heavily support the Democratic nominee in that race, Jodie Haydon of Bardstown, who favors their issue. If Haydon defeats the Republican nominee, Rep. Jimmy Higdon of Lebanon, it would close the GOP’s advantage in the Senate to 19-18 (and one Independent).
The timing of the special session raises the question of the governor’s intent in calling it (if he does). Is it to push a bill through legislature to authorize video slots machines at racetrack before the General Assembly convenes Jan. 5? Slots may or may not end up on the agenda, but it’s not the out-front issue.
Sen. Worley told the Gazette the topic of the special session would be an economic incentives package for the possible relocation of a Harley-Davidson motorcycle plant to Shelbyville.
Harley-Davidson, based in Milwaukee, is considering relocating a manufacturing operation from York, Pa. and building a retail establishment in Shelbyville. Its board meets “the first of December,” and if they finalize the move to Shelbyville, it would “involve a large industrial revenue bond” that would be outside the scope of the executive branch, Worley said.
A source told Kentucky Roll Call that the timing of the special session relates to the situation with Harley-Davidson in Pennsylvania. By acting in December, Kentucky could possibly close the deal before year’s end — ahead of the Pennsylvania legislature convening in January and trying to block the move via richer incentives. The source said the governor does not intend to muddle up the special session with the gambling issue, which is too controversial to pass in December anyway.
October 23, 2009
Sen. Kelly morphing into Circuit Judge Kelly
Later this afternoon, the Administrative Office of the Courts (AOC) will send out a press release announcing that Sen. Dan Kelly’s name — along with the names of two other attorneys from the 11th Circuit Court District — has been sent to the governor by a Judicial Nominating Commission to fill a judgeship. That’s a prediction.
If all goes as widely anticipated, within a few days, Gov. Steve Beshear will choose Kelly to fill a vacancy on the bench. The seat became open when Judge Doughlas George of Springfield resigned instead of completing his term, so he could draw the enhanced pension benefits of a senior status judge, one of 65 in Kentucky.
It is of interest that Kelly’s prospective appointment also has a pension aura. It could be worth more than $2 million to him, via extra pension benefits —it’s like winning the lottery and collecting it in monthly installments.
As a minimum, it would more than double Kelly’s legislative pension from about $30,000 a year to about $64,000, a lifetime increase estimated at $645,000.
The windfall for Kelly could be substantially higher if he has bought five years of “air time,” as he’s entitled to do after 15 years in the legislature, and also has bought credit for his military service. Then, he could draw 100 percent of the judge’s pay as his legislative pension after being a judge for three years. In that case, his legislative pension could be at least $123,384 a year, and a lifetime increase estimated at $2,333,191. He voted for HB 299 in the 2005 session, a bill that allows legislators to base their legislative pensions on government jobs they take after they leave the legislature.
Back to the moment. There is a process, of course, for filling a court vacancy. A seven-member Judicial Nominating Commission, chaired by the chief justice of the Supreme Court, which has six local citizens, including at least two attorneys, submits three names to the governor.
The commission meets at 3:00 p.m. today in Taylor County. They will decide on the three names for the governor. The make up of the commission tells us that one of the names will be Kelly.
Once the governor receives the names this afternoon, the AOC will release the names to the public, and the governor probably will take a few days to ponder his choice, at least giving the appearance of competitiveness in the decision.
Beshear will choose Kelly, because putting him on the bench opens up a Senate seat held by a Republican that the Democrats are slightly favored to win.
Members of the Judicial Nominating Commission
(11th Judicial District, Division 1, for Washington, Marion, Taylor and Green counties)
John C. Minton Jr., chief justice of Supreme Court
James L. Avritt Sr. of Lebanon (Marion County), attorney
Robert Spragens Jr. of Lebanon (Marion County), attorney
Blanche C. Minor of Mannsville (Taylor County), retired state employee
Shiela W. Newcomb of Campbellsville (Taylor County), Kentucky Utilities Company office manager
David R. Carney of Springfield (Washington County)
Randall C. Sullivan of Greensburg (Green County)
The two lawyers are from the same town, and they probably will hold sway over the rest of the commission — all non-lawyers (except the chief justice, of course). After all, this is a process of choosing a judge.
One of the local lawyers on the commission, James L. Avritt Sr., recently sent a letter to the editors of news outlets across Kentucky, inferring that Senate President David Williams’ opposition to video slot terminals at racetracks was financial; Avritt said the Indiana riverboats that Williams frequently visited had a motive (keep expanded gambling out of Kentucky) and an opportunity to comp Williams. Avritt owns racehorses.
On the heels of Avritt’s letter, Williams, himself a lawyer, wrote a letter directly to Avritt, telling him, “You are on notice that I consider any suggestion that I have received a financial benefit for my opposition to expanded gambling to be malicious and made with a reckless disregard for the truth. I ask that you take action to retract this statement immediately. … Any suggestion that I gave engaged in a quid pro quo or received any sort of bribe … is 100% FALSE.”
Avritt said he had no plans to retract anything and that he would welcome a lawsuit. He said the gambling issue would have no sway on his vote as a member of the Judicial Nominating Commission.
Nonetheless, Avritt faces a certain level of public embarrassment if the commission fails to send Kelly’s name to the governor, because failure to include Kelly’s name on the list would deny the Democrats an opportunity to replace Kelly in the Senate with a pro-gambling vote.
It’s unknown whether fellow Lebanon lawyer and commission member, Spragens, shares Avritt’s views on expanded gambling — but Lebanon is a small town. So both lawyers are likely to vote the same way: for Kelly.
Another commission member, Blanche Minor, has been active in Democratic politics, making donations in local and state races. She donated $250 to Steve Beshear’s campaign for the U.S. Senate in 1996, a race U.S. Mitch McConnell won. She also contributed $1,000 to Beshear’s 2007 campaign for governor.
During the Patton administration, Minor held a job in state government with the title of “principle assistant” to the governor. Positions with that title were high-paying jobs, often with no real duties. All of which suggests that Minor is a political team member, and, therefore, would be inclined to vote for Kelly, especially knowing the governor’s wishes.
What’s next?
Within a few days probably, the governor will tell Kelly he has the judgeship. Kelly will then resign from the Senate, and the governor will call two special elections — one to fill the unexpired term of the Senate seat Kelly vacates, and one to fill the unexpired term of the House seat that Robin Webb, D-Grayson, vacated when she was elected to the Senate last month to replace Charlie Borders, R-Russell, who resigned, also for a gubernatorial appointment — not a judgeship, but as a $117,000-a-year commissioner at the Public Service Commission.
Once the governor calls the special elections — issues writs to the sheriffs in the districts — there must be a 35-day waiting period before an election can be held. That’s a constitutional mandate. It gives local officials time to prepare the election, and it gives the candidates time to campaign.
It’s likely the governor will call the special elections for the first week or two of December, and maybe not on the same day. Separating them a few days would give out-of-district political figures in both parties time to go into the districts and campaign for their candidates. The winners would be ready to serve on the opening day of the 2010 General Assembly on Jan. 5.
Capturing Kelly’s seat won’t be easy for the Democrats. Observers with whom we’ve talked expect the race will be competitive. The Democratic nominee, likely former Rep. Jody Haydon of Bardstown, will have “better resources, is better known, and the district is heavy Democratic in voter registration.” But the Republican nominee, likely Rep. Jimmy Higdon of Lebanon, also has some advantages: “the district has been voting Republican in recent years, he is a respected lawmaker, and is knowledgeable.”
Kelly’s resignation as majority floor leader about two weeks ago was perhaps to show a commitment to the governor, and the nominating commission, that he would accept the judgeship, if it’s offered. Also, he gave his GOP caucus in the Senate time to choose a successor for the leadership post ahead of Kelly leaving the Senate. The caucus met this afternoon at the capitol and elected Sen. Robert Stivers, a Manchester (Clay County) lawyer, as the Senate’s new majority floor leader.
Williams is safe
Part of the talk during the past few months has been on the horse industry’s efforts to oust David Williams as Senate president. If the Democrats win the seat Kelly vacates, could that lead to a coup against Williams on the opening day of the 2010 session? You can take it off the table. Williams is safe, at least through the next leadership election in January 2011.
A take-away of the Senate seat now held by Kelly would give the Democrats 18 seats, and drop the Republicans to 19 seats and one independent (who caucuses with them). That leaves the Democrats short — one vote for a tie, two for control.
Slots stalled on legislative front
Since the special legislative session this past summer, where the push by the horse industry and the governor to allow video slots terminals at racetracks failed in the Senate A & R Committee, the political spotlight in Kentucky has been alternately on the open U.S. Senate race (to replace Jim Bunning next year) and on expanded gambling. That’s how big the gaming issue is.
The governor and the horse industry have made progress in positioning themselves for the battle in the Senate over slots at racetracks. But the issue is no further advanced on the legislative front than it was that day in June when it died in committee. The playing field has shifted, and the Senate Republicans have adjusted their defense, but the issue has stalled. Both sides remain poised, however, like the cobra and mongoose, for the next strike.
If all goes as widely anticipated, within a few days, Gov. Steve Beshear will choose Kelly to fill a vacancy on the bench. The seat became open when Judge Doughlas George of Springfield resigned instead of completing his term, so he could draw the enhanced pension benefits of a senior status judge, one of 65 in Kentucky.
It is of interest that Kelly’s prospective appointment also has a pension aura. It could be worth more than $2 million to him, via extra pension benefits —it’s like winning the lottery and collecting it in monthly installments.
As a minimum, it would more than double Kelly’s legislative pension from about $30,000 a year to about $64,000, a lifetime increase estimated at $645,000.
The windfall for Kelly could be substantially higher if he has bought five years of “air time,” as he’s entitled to do after 15 years in the legislature, and also has bought credit for his military service. Then, he could draw 100 percent of the judge’s pay as his legislative pension after being a judge for three years. In that case, his legislative pension could be at least $123,384 a year, and a lifetime increase estimated at $2,333,191. He voted for HB 299 in the 2005 session, a bill that allows legislators to base their legislative pensions on government jobs they take after they leave the legislature.
Back to the moment. There is a process, of course, for filling a court vacancy. A seven-member Judicial Nominating Commission, chaired by the chief justice of the Supreme Court, which has six local citizens, including at least two attorneys, submits three names to the governor.
The commission meets at 3:00 p.m. today in Taylor County. They will decide on the three names for the governor. The make up of the commission tells us that one of the names will be Kelly.
Once the governor receives the names this afternoon, the AOC will release the names to the public, and the governor probably will take a few days to ponder his choice, at least giving the appearance of competitiveness in the decision.
Beshear will choose Kelly, because putting him on the bench opens up a Senate seat held by a Republican that the Democrats are slightly favored to win.
Members of the Judicial Nominating Commission
(11th Judicial District, Division 1, for Washington, Marion, Taylor and Green counties)
John C. Minton Jr., chief justice of Supreme Court
James L. Avritt Sr. of Lebanon (Marion County), attorney
Robert Spragens Jr. of Lebanon (Marion County), attorney
Blanche C. Minor of Mannsville (Taylor County), retired state employee
Shiela W. Newcomb of Campbellsville (Taylor County), Kentucky Utilities Company office manager
David R. Carney of Springfield (Washington County)
Randall C. Sullivan of Greensburg (Green County)
The two lawyers are from the same town, and they probably will hold sway over the rest of the commission — all non-lawyers (except the chief justice, of course). After all, this is a process of choosing a judge.
One of the local lawyers on the commission, James L. Avritt Sr., recently sent a letter to the editors of news outlets across Kentucky, inferring that Senate President David Williams’ opposition to video slot terminals at racetracks was financial; Avritt said the Indiana riverboats that Williams frequently visited had a motive (keep expanded gambling out of Kentucky) and an opportunity to comp Williams. Avritt owns racehorses.
On the heels of Avritt’s letter, Williams, himself a lawyer, wrote a letter directly to Avritt, telling him, “You are on notice that I consider any suggestion that I have received a financial benefit for my opposition to expanded gambling to be malicious and made with a reckless disregard for the truth. I ask that you take action to retract this statement immediately. … Any suggestion that I gave engaged in a quid pro quo or received any sort of bribe … is 100% FALSE.”
Avritt said he had no plans to retract anything and that he would welcome a lawsuit. He said the gambling issue would have no sway on his vote as a member of the Judicial Nominating Commission.
Nonetheless, Avritt faces a certain level of public embarrassment if the commission fails to send Kelly’s name to the governor, because failure to include Kelly’s name on the list would deny the Democrats an opportunity to replace Kelly in the Senate with a pro-gambling vote.
It’s unknown whether fellow Lebanon lawyer and commission member, Spragens, shares Avritt’s views on expanded gambling — but Lebanon is a small town. So both lawyers are likely to vote the same way: for Kelly.
Another commission member, Blanche Minor, has been active in Democratic politics, making donations in local and state races. She donated $250 to Steve Beshear’s campaign for the U.S. Senate in 1996, a race U.S. Mitch McConnell won. She also contributed $1,000 to Beshear’s 2007 campaign for governor.
During the Patton administration, Minor held a job in state government with the title of “principle assistant” to the governor. Positions with that title were high-paying jobs, often with no real duties. All of which suggests that Minor is a political team member, and, therefore, would be inclined to vote for Kelly, especially knowing the governor’s wishes.
What’s next?
Within a few days probably, the governor will tell Kelly he has the judgeship. Kelly will then resign from the Senate, and the governor will call two special elections — one to fill the unexpired term of the Senate seat Kelly vacates, and one to fill the unexpired term of the House seat that Robin Webb, D-Grayson, vacated when she was elected to the Senate last month to replace Charlie Borders, R-Russell, who resigned, also for a gubernatorial appointment — not a judgeship, but as a $117,000-a-year commissioner at the Public Service Commission.
Once the governor calls the special elections — issues writs to the sheriffs in the districts — there must be a 35-day waiting period before an election can be held. That’s a constitutional mandate. It gives local officials time to prepare the election, and it gives the candidates time to campaign.
It’s likely the governor will call the special elections for the first week or two of December, and maybe not on the same day. Separating them a few days would give out-of-district political figures in both parties time to go into the districts and campaign for their candidates. The winners would be ready to serve on the opening day of the 2010 General Assembly on Jan. 5.
Capturing Kelly’s seat won’t be easy for the Democrats. Observers with whom we’ve talked expect the race will be competitive. The Democratic nominee, likely former Rep. Jody Haydon of Bardstown, will have “better resources, is better known, and the district is heavy Democratic in voter registration.” But the Republican nominee, likely Rep. Jimmy Higdon of Lebanon, also has some advantages: “the district has been voting Republican in recent years, he is a respected lawmaker, and is knowledgeable.”
Kelly’s resignation as majority floor leader about two weeks ago was perhaps to show a commitment to the governor, and the nominating commission, that he would accept the judgeship, if it’s offered. Also, he gave his GOP caucus in the Senate time to choose a successor for the leadership post ahead of Kelly leaving the Senate. The caucus met this afternoon at the capitol and elected Sen. Robert Stivers, a Manchester (Clay County) lawyer, as the Senate’s new majority floor leader.
Williams is safe
Part of the talk during the past few months has been on the horse industry’s efforts to oust David Williams as Senate president. If the Democrats win the seat Kelly vacates, could that lead to a coup against Williams on the opening day of the 2010 session? You can take it off the table. Williams is safe, at least through the next leadership election in January 2011.
A take-away of the Senate seat now held by Kelly would give the Democrats 18 seats, and drop the Republicans to 19 seats and one independent (who caucuses with them). That leaves the Democrats short — one vote for a tie, two for control.
Slots stalled on legislative front
Since the special legislative session this past summer, where the push by the horse industry and the governor to allow video slots terminals at racetracks failed in the Senate A & R Committee, the political spotlight in Kentucky has been alternately on the open U.S. Senate race (to replace Jim Bunning next year) and on expanded gambling. That’s how big the gaming issue is.
The governor and the horse industry have made progress in positioning themselves for the battle in the Senate over slots at racetracks. But the issue is no further advanced on the legislative front than it was that day in June when it died in committee. The playing field has shifted, and the Senate Republicans have adjusted their defense, but the issue has stalled. Both sides remain poised, however, like the cobra and mongoose, for the next strike.
September 22, 2009
Super Rich Pensions Root of Political Change
What you are about to read may seem like an expose on greed, because it is, to a point. The Kentucky General Assembly in 2005 passed a little-known bill (HB 299) that allowed lawmakers to enrich their pensions. While some of the examples in this story may be disturbing, the essence, in total, is not the temporary gains. Above the greed is a larger concern: a shift of political power in the state’s capitol that is directly connected to the pension bill.
You may remember the funny bone song, “Dry Bones.” “The ankle bone’s connected to the knee bone, the knee bone’s connected to the thigh bone.”
Well, legislators’ pensions are connected to recent Senate resignations, and Senate resignations are connected to control of the chamber, and from there: legislation, redistricting and, possibly, one-party rule.
That 2005 pension bill has other unintended consequences. Legislators work part-time for the commonwealth. Nonetheless, the size of their pensions exceeds those of state and local government employees, all of whom work full-time. The gap is so wide and the greed is so great, legislators have seriously compromised their ability to fix the $29.7 billion (and growing) unfunded liability in the state’s other retirement systems.
In addition, the bill handed the office of the governor a powerful new tool that he and all future governors can use to sway legislators’ votes on important issues confronting them in future sessions. The carrot is a high-paying government job, which a legislator can hold for three years and boost his or her legislative pension, in some cases by more than $1 million. For state Rep. Harry Moberly, for example, that could mean at least $2.6 million; House Speaker Greg Stumbo, at least $1.2 million; former state Rep. J.R. Gray, probably $1.2 million; and state Sen. David Boswell has a shot at $1.1 million. If certain information wasn’t blocked from the public, we might add former state Sen. Charlie Borders and Sen. Dan Kelly to the “Million-Dollar Club.”
Here’s an example that illustrates what’s happening.
Former state Rep. Steve Nunn served about one year as deputy secretary of the Cabinet for Health and Family Services before he resigned in March. Nunn had served 16 years in the House of Representatives before taking the cabinet job at $125,000 a year.
On top of Nunn's salary – just for serving that one year in the cabinet, and because it’s a job where he participated in a government-administered pension system (KERS) – $244,062 was added to his legislative pension. You could say his total compensation for being the deputy secretary for one year was $369,062.
That’s an estimate, but it’s a sound estimate, based on information obtained by Kentucky Roll Call under Kentucky’s open records law, and based on the Social Security life expectancy table and a number of pension-related variables. What we don’t know, because the information is blocked from the public, is whether Nunn and other legislators mentioned throughout this story bought “air time” or time from other government jobs, which would also increase their pensions.
Nunn’s standard pension would have been $15,902 a year, but the state job almost doubled it to $29,187; and it increased the lifetime payout from $300,699 to $551,917 – an increase of $251,218, or 83 percent.
Had Nunn stayed on as deputy secretary for a total of three years, it would have increased his legislative pension to $55,000 a year – a hike that would have more than tripled his standard pension. Over a lifetime, it would have given him an extra $739,351. That would have been $246,450 a year (for three years), on top of his salary, only because he is a former lawmaker who was serving in the 2005 General Assembly when his colleagues passed the pension-enrichment bill.
Quitting the job cost Nunn nearly a half-million dollars ($488,133). Nunn voted against the bill.
Legislators can begin drawing their pension at age 65 without a penalty for early withdrawal. Nunn can begin drawing his at age 62 without a penalty, because legislators get one year reduced for each five years of legislative service or bought time. He will be 57 on Nov. 4.
By now, of course, you are aware that Nunn has been charged for allegedly murdering his ex-fiancé, Amanda Ross, in Lexington on Sept. 11 and could face the death penalty.
In the wake of BOPTROT, a scandal in the early 1990s that sent 10 percent of the Kentucky Legislature to prison, lawmakers enacted a law in 1993 that prohibits a legislator or an ex-legislator from drawing a legislative pension if he or she is convicted of a felony “related to his duties as a legislator.” That clause appears to mean that Nunn can draw his legislative pension, even if he’s convicted of a felony.
KRS 6.696 reads in its entirety, “(1) A legislator or former legislator convicted of a felony relating to his duties as a legislator, in any state or federal court of competent jurisdiction, shall forfeit rights and benefits earned after September 16, 1993, under the state administered retirement plan to which contributions have been made as a result of his service in the General Assembly, except for the return of his accumulated contributions and interest credited on those contributions. (2) The payment of retirement benefits ordered forfeited shall be stayed pending any appeal of the conviction. If the conviction is reversed on final judgment, no retirement benefits shall be forfeited.”
So, apparently whatever happens with the murder trial, Nunn can begin drawing in November 2014 a legislative pension estimated at $29,187 a year for the rest of his life.
Working in Government – Again
The number of lawmakers who have worked in other government jobs, which they now can use in calculating their legislative pensions, is pervasive
About one legislator out of three, roughly 15 in the Senate and at least 30 in the House, have held (or hold) a local or state government job. All those people are eligible to use their service in those jobs to enrich their legislative pensions. In some cases, they may not do so, because they may be drawing a higher salary as a legislator than they were at the government job.
Sen. Julian Carroll, for instance, can base his legislative pension on his salary as governor (1974-1979), although he may be making more now as a senator than he was then as governor. But you see the point. Former state Sen. Dan Mongiardo’s legislative pension will be based on his $105,744 salary as lieutenant governor, giving him an extra $232,995.
Senators: Denise Harper Angel was the PVA of Jefferson County; Johnny Ray Turner was a high school basketball coach; Ed Worley was the city manager of Richmond; Ken Winters was a dean at Murray State University; Carroll Gibson was a circuit court clerk; Jack Westwood was a school teacher; Perry Clark works for the University of Louisville; and the list goes on.
House: Derrick Graham is a classroom teacher; Hubert Collins, Rick Nelson, Charles Miller and Teddy Edmonds are retired teachers; Greg Stumbo was attorney general; C.B. Embry was a county judge-executive; Reginald Meeks and Mary Lou Marzian work for the University of Louisville; and the list goes on.
More important than who did work for government is who might. Future government jobs will bring higher salaries and have a great effect on the legislators’ pensions. Legislators, especially those with 20 years or more in the General Assembly, will be tempted to keep one eye on taking care of business in the House and Senate, and the other eye on placating the governor, in the hopes of landing a high-paying job to seriously enhance their pensions.
A Strategy
The pension strategy is working for the Democrats. Sen. Charlie Borders, R-Russell, resigned from the Senate in July to take a $117,000-a-year job at the Public Service Commission, the agency that regulates utilities. Borders gets the salary and at least $737,516 extra, payable monthly through his legislative pension. It was a win for Gov. Steve Beshear, too. He called a special election to fill the vacant Senate seat, and state Rep. Robin Webb, D-Grayson, won it – a take-away for the Democrats, who closed the Republican advantage in the Senate to 20-17-1. State Sen. Bob Leeper of Paducah is an independent, but he caucuses with the Republicans. So, in reality, the Republican advantage remains at 21-17.
It has been widely reported that Majority Floor Leader Dan Kelly, R-Springfield, is in line to receive a gubernatorial appointment to a $123,384-a-year job to fill an unexpired term of a circuit judge. A decision on the appointment could come in October. If Kelly gets the judgeship, the Democrats are favored to win the Senate seat he would vacate. That would narrow the Republicans’ advantage in the Senate to 20-18 (still counting Leeper in the R camp) and create a precarious situation for Senate President David Williams, R-Burkesville, because it could bring Sen. Tom Buford, R-Nicholasville, to the forefront as a wildcard in deciding which party controls the Senate.
Buford is known as a maverick in Williams’ camp. At the age of 60, he has served in the Senate 19 years, and he’s on the governor’s side in favor of allowing slots at the state’s racetracks. It would not come as a surprise if Buford were to be appointed to a state job during Beshear’s first or second administration (if there is a second one, which at the moment seems likely).
If Buford were to side with the Democrats, and a Democrat were to win Kelly’s vacated seat, a floor vote to oust Williams could throw the Senate into a 19-19 tie on Jan. 5, the first day of the 2010 session (for now, it appears unlikely there will be a special session this fall). On a tie vote, Williams stays president. But it could force some changes, including shared power of some sort.
History
The lawmakers created their pension system in 1980 and modeled it after the judges’ pension system. In creating their own system, the lawmakers made it richer than what state and local government employees’ have, but not quite as rich as the judges’ plan, which has been in place since 1960. However, at their very next chance, in the 1982 session, lawmakers enriched their pensions, creating bonanzas for the bulk of sitting members, an act that is remembered to this day as the “greed bill.”
How the Pension Bonanza Came About
The Senate Republican leadership in March 2005 inserted the pension language into an innocuous bill that came over from the Democrat-controlled House.
Sen. Damon Thayer, R-Georgetown, was chairman of the State Government Committee, where the switcheroo took place. Four of the five Senate Republican leaders – David Williams, Dan Kelly, Richie Sanders and Dan Seum – voted for the bill on the Senate floor that day. Sen. Katie Stine, president pro tem, did not vote when the bill came up, one of six senators who did not cast a vote. The bill passed the Senate 30-2, and then passed the House the same day, 48-36.
In the bill they enacted, HB 299, legislators made five major changes to their pensions.
1. They lowered from 30 to 27 the number of years they must serve before they can start drawing their pension prior to age 65 without an early withdrawal penalty.
2. They fixed it so that any member who was not in the legislative retirement plan could join, by a certain date, and be eligible for the bonanzas to come.
3. They lowered the salary multiplying-factor used in figuring their pension to make it a “high three” instead of a “high five” — the only pension system with a “high three” among the six systems administered by the state.
4. They eliminated their $27,500 “assumed” salary as a multiplying-factor and replaced it with their real salary so that change No. 5 below would make sense.
5. They bestowed upon themselves a pension privilege called “reciprocity,” which means all legislators serving in the 2005 session, when they passed these changes, and all legislators elected in future years, could calculate their pensions NOT on their part-time salary as a legislator but on their full-time salary at another state or local government job after they left the legislature or before they came. The only restriction being, the pre- or post-legislative job must be covered by one of Kentucky’s other government-administered pension systems.
Reciprocity is what allows lawmakers to convert their standard pensions into super pensions. Judges don’t have reciprocity, but all others in the state retirement systems do; and it’s on that point that some legislators rationalize it for themselves. There is a big difference, however. The service credit rate (the percentage figure used in calculating pensions) is greater for legislators — in a few instances, much greater – than it is for other government employees, except judges. In 1982, lawmakers lowered their percentage rate — and the judges’ — to make them equal at 2.75 percent.
Lawmakers are considered part-time employees, while judges and other government employees work full-time.
Second Pension
In 1998, legislators voted themselves an automatic second pension, this one in the same retirement system as county and state employees. The second pension takes effect when their legislative pensions max out. The authority for this double dipping is KRS 62.680(3), written by former state Sen. Albert Robinson, R-London.
\Today, seven serving legislators have second pensions – Sens. Walter Blevins and David Boswell, and Reps. Tom Burch, Danny Ford, Jody Richards, Tom Riner and Greg Stumbo. An eighth legislator, Rep. Harry Moberly, dropped his second pension at KERS so he could enroll in the teachers’ retirement system through his employer, Eastern Kentucky University, which will substantially increase his legislative pension.
Rep. Harry Moberly
Rep. Harry Moberly entered the legislature with the Freshman Class of 1980, and has served 29 years. Members of the 1980s class were assigned a service credit rate (SCR) of 4.15 percent. Only Moberly and Speaker Stumbo today have that rate. (Only four legislators, currently serving, have the highest rate, which is 5.0 percent: Sen. David Boswell and Reps. Tom Burch, Jody Richards and Tom Riner; and three legislators have 3.5 percent: Sens. Walter Blevins and Dan Seum, and Rep. Danny Ford. All others have 2.75.)
Moberly’s employer is Eastern Kentucky University, where he’s vice president of Administrative Affairs at $168,686 a year. On Dec. 31, 2004, after 25 years of legislative serve, he maxed out on his legislative pension — meaning he can draw 100 percent of his salary when he starts his pension.
Moberly’s current “high-three” salary from his legislative service is $41,035. He’s 59 years old and can start drawing his legislative pension next year without an early retirement penalty. So Moberly can draw 100 percent of his salary. However, thanks to reciprocity, his salary won’ be what he earned in the legislature, it will be what he’s earning at the university, which is four times greater than his legislative pay. And, presumably, the EKU pay will increase each year, so the longer he waits to start his legislative pension, the larger it will be.
As of right now, Moberly’s legislative pension would be about $168,686 a year for the rest of his life. That’s $127,651 per year more as a result of the 2005 legislation; that’s a lifetime windfall estimate at $2.6 million. He voted for the bill.
Sen. Dan Kelly
If Sen. Dan Kelly is offered and accepts the judgeship, it could more than double his legislative pension from about $30,000 a year to about $64,000, and a lifetime increase estimated at $645,000. That’s a minimum. It could be substantially higher if he has bought five years of “air time,” as he’s entitled to do after 15 years in the legislature, and also has bought credit for his military service. Then, he could draw 100 percent of the judge’s pay as his legislative pension after being a judge for three years. In that case, his legislative pension could be at least $123,384 a year, and a lifetime increase estimated at $2,333,191. He voted for the bill.
In other words, if Kelly is appointed circuit judge and then serves three years in that capacity, it’s like someone offering him $2.3 million to take the job (collectible monthly when he starts drawing his legislative pension). And that doesn’t count his salary as a judge or his second pension as a judge.
Labor Cabinet Secretary J.R. Gray
When Beshear was appointing his cabinet secretaries right after the November 2007 election, he picked then-state Rep. J.R. Gray, D-Benton, to head the Labor Cabinet. Gray came to Frankfort as a lawmaker in 1976. Therefore, his pension percent rate is 5 percent. His salary as a cabinet secretary is $136,500 a year, according to The Courier-Journal salary Web site. If he stays on at the Labor Cabinet through December of next year, that would give him three years and, therefore, his “high three” would be his cabinet secretary pay.
The 2005 legislation enriches Gray’s legislative pension by an estimated $1.2 million – a bonus, so to speak, of more than $400,000 a year (for three years), on top of his $136,500-a-year salary. Said another way: The systems are giving Gray more than a half-million dollars a year (salary + enhanced pension for three years) to head the Labor Cabinet. That’s four times more than any other cabinet secretary is paid (and, yes, that’s a fair assessment; it’s just that the bulk of this compensation is channeled through his legislative pension). He voted for HB 299.
House Speaker Greg Stumbo
Speaker Greg Stumbo is also a big winner with the legislative pension bonanza, even though he was not serving in the legislature when HB 299 was enacted in 2005: at the time, he was attorney general. Nonetheless, he will reap an estimated $1,244,694 extra as a result of the bill, because he returned to the legislature. The 2005 legislation, you will remember, applies also to legislators elected in the future.
Within a month after Beshear was sworn into the governor’s office, Stumbo met with him and almost immediately afterward, freshman state Rep. Brandon Spencer, D-Prestonsburg, who held Stumbo’s old House seat in District 95, suddenly resigned. The governor called a special election to fill Spencer’s unexpired term, and Stumbo won that special election on Feb. 5, 2008.
Three weeks later, on Feb. 29, 2008, back in the legislature, Stumbo maxed out on his legislative pension at 24 years and two months. In summary, returning to the legislature made him eligible to draw his legislative pension figured on his salary as attorney general; to max out his pension made him eligible (he otherwise would not have been eligible) to draw 100 percent of his AG salary (high three averaged); and it triggered the 1998 law that provided him with a second pension to succeed the one he maxed out on – the second pension is not in the Legislators Retirement Plan, but in the county and state employees’ plan, where he already has a pension account from being a state employee during his four years as AG.
Stumbo will draw 100 percent of his AG salary, $98,824 a year, every year for the rest of his life once he starts drawing his legislative pension, which could only have occurred if he returned to the legislature.
Without the reciprocity provision in the 2005 law, and without him returning to the legislature, Stumbo’s legislative pension would be around $39,792 a year. So, his decision to return to the legislature was more than it appeared at the time. It gave Stumbo an extra $63,311 a year for the rest of his life once he starts to draw, which could be at age 61 – that’s when he can begin his pension without a penalty for early withdrawal. It’s a lifetime windfall estimated at $1,244,694, a nice reward for winning one election (which really wasn’t much of an election at all – Stumbo won 80 percent of the vote).
As Stumbo’s return to the legislature shows, a break in service has no bearing on service years previously accumulated. In tallying Stumbo’s total years of service, for the purposes of calculating his legislative pension, his four-year absence was a non-factor.
Sen. David Boswell
Sen. David Boswell entered the legislature as a member of the House in 1978, so he has a 5 percent service credit rate. He had been in the House six years by 1983 when he was elected commissioner of Agriculture – serving in that capacity during the administration of Gov. Martha Layne Collins.
In 1990, Boswell was elected to the Senate, where he has served continuously. This year marks 26 years he’s been a lawmaker. Because his percentage multiplier is high, he maxed out in his legislative pension on Dec. 31, 2004, and immediately began a second legislative pension in the KERS.
Boswell will be 60 on Nov. 20. He has not started drawing his legislative pension, so he has options. If he were to start drawing his pension in November, which he can do without penalty, the pension would be figured not on his salary in the legislature but on his salary as commissioner of Agriculture. His “high-three” in that job was $53,757, which would give him a $69,880-a-year pension instead of $50,161 a year if it were based on his legislative income. Over a lifetime, his four years as ag commissioner guarantees him an extra $402,676.
But his higher pension from being Ag commissioner may not be the final job that would increase his legislative pension. Boswell is considering three options for next year: (1) a re-election bid to the state Senate; (2) a rematch with Congressman Brett Guthrie in the 2nd U.S. House District; or (3) a run for county judge-executive in Daviess County. The latter would boost Boswell’s legislative pension an estimated $1.1 million – above his standard legislative pension.
In Daviess County, the judge-executive’s annual salary is $100,548, plus an annual $3,600 stipend from the Kentucky Transportation Cabinet. The stipend is taxable income, so it’s included in the pension formula. (All 120 judge-executives receive the stipend in the same amount.)
Perhaps making the judge-executive’s race even more attractive for Boswell, the current officeholder, Reid Haire, has announced he will not seek re-election. If Boswell were to win that race and serve at least three years (it’s a four-year term), it would raise his legislative pension to $104,148 a year. He could quit after three years and still walk away with a million dollars (lifetime), added to his legislative pension. He voted for HB 299.
Lt. Gov. Daniel Mongiardo
Lt. Gov. Daniel Mongiardo, 49, was a member of the Senate in 2005 and, therefore, can draw his legislative pension – when that time comes – based on his lieutenant governor’s salary. He served seven years in the Senate, during which time his high-three salary was $33,397. When he reaches age 64, he could begin drawing his legislative pension without an early withdrawal penalty, and, based on his Senate salary his legislative pension would be $6,429 a year. However, his pension won’t be figured on his salary in the legislature, as we’ve said; it will be figured on his salary as lieutenant governor, which is $105,744.
So, being lieutenant government increases Mongiardo’s legislative pension to $20,356 a year, or an extra $232,995 lifetime total. He did not vote for or against the bill.
Frank Rasche
Ex-legislator Frank Rasche, D-Paducah, served 15 years in the House before resigning in 2008 to accept an $80,000-a-year position in the Beshear administration in the Education and Workforce Development Cabinet. That state job increases his legislative pension to $33,000 a year from $14, 841 – a gain of $18,159 a year for the rest of his life. The lifetime gain is estimated at $329,949. He voted for the bill.
Jon Draud
Ex-legislator Jon Draud served nine years in the House before resigning to become state Education commissioner at $220,000 a year. He held that job only one year, but it counts as one of his “high three” in calculating his legislative pension, and it moved his legislative pension up from $9,247 to $22,876 annually, a gain of $13,629 a year, or, over a lifetime, $172,545.
Had Draud stayed on the job three years as Education commissioner, he would have received – through his legislative pension – a bonus of $572,270. With that, his monthly pension would have jumped to $45,203. He voted against the bill.
Joe Barrows
Ex-legislator Joe Barrows, D-Versailles, missed out on more than $700,000 because he began drawing his legislative pension before he started his state job this summer in the Office of Homeland Security. Once a legislator, or ex-legislator, begins drawing his or her legislative pension, it closes the door forever on the reciprocity provision in the 2005 law for that particular legislative pension. He voted for the bill.
What if ...
What if all legislators with 20 years of service became county judge-executives?
To further reveal the magnitude of the rich benefits that legislators bestowed upon themselves through enactment of the 2005 law, Kentucky Roll Call filed open records requests with the Legislative Research Commission and obtained the taxable income for the most recent six years on all current legislators who have served 20 years or more in the legislature, or will have served 20 years at the end of next year. From the taxable income information (that’s the income the legislator reports to the IRS), we did the math and came up with each legislator’s “high three” salary (average of the highest three years), which we then used to figure the legislator’s legislative pension, based on a hypothetical scenario where he or she leaves the legislature on Dec. 31, 2010.
We expanded the hypothesis to have each of these 25 legislators run for county judge-executive in 2010 – rather than seeking re-election to the legislature. In Fayette and Jefferson counties, which have city-county consolidated governments, we replaced judge-executive in the formula with the metro mayor, and applied the formula to the legislators who live in those two counties. The mayor’s job in Lexington pays $120,574 a year; and the mayor’s job in Louisville pays $105,746.
How much would this enrich these selected legislators’ legislative pensions, if they were elected county judge-executive, or mayor if they live in Fayette or Jefferson counties? On average, it would enrich each legislators’ pension by $610,776 over the lawmakers’ lifetimes. Boswell would strike the Mother lode – an estimated $1,192,425.
The Legislative Ethics Commission said there was no violation of the ethic code when legislators voted in favor of the pension-enrichment bill and then benefited from it directly. The agency’s rationale: The opportunity applies to all members. Of course, the agency is only interpreting the ethics law as written by those who are drawing the pensions.
Frankfort Culture
Frankfort is a culture of pensions. It’s common to find people drawing two, even three government pensions. Legislators have joined the parade, and the magnitude of it on the legislative process and Kentucky politics should not be underestimated.
We don’t know if the governor is keeping a list. What we do know is, Beshear has received many requests for state jobs from members of the House and Senate – not jobs for their constituents, but for themselves. For the pensions! You see what lies ahead.
By Lowell Reese
Kentucky Roll Call
Sept. 22, 209
You may remember the funny bone song, “Dry Bones.” “The ankle bone’s connected to the knee bone, the knee bone’s connected to the thigh bone.”
Well, legislators’ pensions are connected to recent Senate resignations, and Senate resignations are connected to control of the chamber, and from there: legislation, redistricting and, possibly, one-party rule.
That 2005 pension bill has other unintended consequences. Legislators work part-time for the commonwealth. Nonetheless, the size of their pensions exceeds those of state and local government employees, all of whom work full-time. The gap is so wide and the greed is so great, legislators have seriously compromised their ability to fix the $29.7 billion (and growing) unfunded liability in the state’s other retirement systems.
In addition, the bill handed the office of the governor a powerful new tool that he and all future governors can use to sway legislators’ votes on important issues confronting them in future sessions. The carrot is a high-paying government job, which a legislator can hold for three years and boost his or her legislative pension, in some cases by more than $1 million. For state Rep. Harry Moberly, for example, that could mean at least $2.6 million; House Speaker Greg Stumbo, at least $1.2 million; former state Rep. J.R. Gray, probably $1.2 million; and state Sen. David Boswell has a shot at $1.1 million. If certain information wasn’t blocked from the public, we might add former state Sen. Charlie Borders and Sen. Dan Kelly to the “Million-Dollar Club.”
Here’s an example that illustrates what’s happening.
Former state Rep. Steve Nunn served about one year as deputy secretary of the Cabinet for Health and Family Services before he resigned in March. Nunn had served 16 years in the House of Representatives before taking the cabinet job at $125,000 a year.
On top of Nunn's salary – just for serving that one year in the cabinet, and because it’s a job where he participated in a government-administered pension system (KERS) – $244,062 was added to his legislative pension. You could say his total compensation for being the deputy secretary for one year was $369,062.
That’s an estimate, but it’s a sound estimate, based on information obtained by Kentucky Roll Call under Kentucky’s open records law, and based on the Social Security life expectancy table and a number of pension-related variables. What we don’t know, because the information is blocked from the public, is whether Nunn and other legislators mentioned throughout this story bought “air time” or time from other government jobs, which would also increase their pensions.
Nunn’s standard pension would have been $15,902 a year, but the state job almost doubled it to $29,187; and it increased the lifetime payout from $300,699 to $551,917 – an increase of $251,218, or 83 percent.
Had Nunn stayed on as deputy secretary for a total of three years, it would have increased his legislative pension to $55,000 a year – a hike that would have more than tripled his standard pension. Over a lifetime, it would have given him an extra $739,351. That would have been $246,450 a year (for three years), on top of his salary, only because he is a former lawmaker who was serving in the 2005 General Assembly when his colleagues passed the pension-enrichment bill.
Quitting the job cost Nunn nearly a half-million dollars ($488,133). Nunn voted against the bill.
Legislators can begin drawing their pension at age 65 without a penalty for early withdrawal. Nunn can begin drawing his at age 62 without a penalty, because legislators get one year reduced for each five years of legislative service or bought time. He will be 57 on Nov. 4.
By now, of course, you are aware that Nunn has been charged for allegedly murdering his ex-fiancé, Amanda Ross, in Lexington on Sept. 11 and could face the death penalty.
In the wake of BOPTROT, a scandal in the early 1990s that sent 10 percent of the Kentucky Legislature to prison, lawmakers enacted a law in 1993 that prohibits a legislator or an ex-legislator from drawing a legislative pension if he or she is convicted of a felony “related to his duties as a legislator.” That clause appears to mean that Nunn can draw his legislative pension, even if he’s convicted of a felony.
KRS 6.696 reads in its entirety, “(1) A legislator or former legislator convicted of a felony relating to his duties as a legislator, in any state or federal court of competent jurisdiction, shall forfeit rights and benefits earned after September 16, 1993, under the state administered retirement plan to which contributions have been made as a result of his service in the General Assembly, except for the return of his accumulated contributions and interest credited on those contributions. (2) The payment of retirement benefits ordered forfeited shall be stayed pending any appeal of the conviction. If the conviction is reversed on final judgment, no retirement benefits shall be forfeited.”
So, apparently whatever happens with the murder trial, Nunn can begin drawing in November 2014 a legislative pension estimated at $29,187 a year for the rest of his life.
Working in Government – Again
The number of lawmakers who have worked in other government jobs, which they now can use in calculating their legislative pensions, is pervasive
About one legislator out of three, roughly 15 in the Senate and at least 30 in the House, have held (or hold) a local or state government job. All those people are eligible to use their service in those jobs to enrich their legislative pensions. In some cases, they may not do so, because they may be drawing a higher salary as a legislator than they were at the government job.
Sen. Julian Carroll, for instance, can base his legislative pension on his salary as governor (1974-1979), although he may be making more now as a senator than he was then as governor. But you see the point. Former state Sen. Dan Mongiardo’s legislative pension will be based on his $105,744 salary as lieutenant governor, giving him an extra $232,995.
Senators: Denise Harper Angel was the PVA of Jefferson County; Johnny Ray Turner was a high school basketball coach; Ed Worley was the city manager of Richmond; Ken Winters was a dean at Murray State University; Carroll Gibson was a circuit court clerk; Jack Westwood was a school teacher; Perry Clark works for the University of Louisville; and the list goes on.
House: Derrick Graham is a classroom teacher; Hubert Collins, Rick Nelson, Charles Miller and Teddy Edmonds are retired teachers; Greg Stumbo was attorney general; C.B. Embry was a county judge-executive; Reginald Meeks and Mary Lou Marzian work for the University of Louisville; and the list goes on.
More important than who did work for government is who might. Future government jobs will bring higher salaries and have a great effect on the legislators’ pensions. Legislators, especially those with 20 years or more in the General Assembly, will be tempted to keep one eye on taking care of business in the House and Senate, and the other eye on placating the governor, in the hopes of landing a high-paying job to seriously enhance their pensions.
A Strategy
The pension strategy is working for the Democrats. Sen. Charlie Borders, R-Russell, resigned from the Senate in July to take a $117,000-a-year job at the Public Service Commission, the agency that regulates utilities. Borders gets the salary and at least $737,516 extra, payable monthly through his legislative pension. It was a win for Gov. Steve Beshear, too. He called a special election to fill the vacant Senate seat, and state Rep. Robin Webb, D-Grayson, won it – a take-away for the Democrats, who closed the Republican advantage in the Senate to 20-17-1. State Sen. Bob Leeper of Paducah is an independent, but he caucuses with the Republicans. So, in reality, the Republican advantage remains at 21-17.
It has been widely reported that Majority Floor Leader Dan Kelly, R-Springfield, is in line to receive a gubernatorial appointment to a $123,384-a-year job to fill an unexpired term of a circuit judge. A decision on the appointment could come in October. If Kelly gets the judgeship, the Democrats are favored to win the Senate seat he would vacate. That would narrow the Republicans’ advantage in the Senate to 20-18 (still counting Leeper in the R camp) and create a precarious situation for Senate President David Williams, R-Burkesville, because it could bring Sen. Tom Buford, R-Nicholasville, to the forefront as a wildcard in deciding which party controls the Senate.
Buford is known as a maverick in Williams’ camp. At the age of 60, he has served in the Senate 19 years, and he’s on the governor’s side in favor of allowing slots at the state’s racetracks. It would not come as a surprise if Buford were to be appointed to a state job during Beshear’s first or second administration (if there is a second one, which at the moment seems likely).
If Buford were to side with the Democrats, and a Democrat were to win Kelly’s vacated seat, a floor vote to oust Williams could throw the Senate into a 19-19 tie on Jan. 5, the first day of the 2010 session (for now, it appears unlikely there will be a special session this fall). On a tie vote, Williams stays president. But it could force some changes, including shared power of some sort.
History
The lawmakers created their pension system in 1980 and modeled it after the judges’ pension system. In creating their own system, the lawmakers made it richer than what state and local government employees’ have, but not quite as rich as the judges’ plan, which has been in place since 1960. However, at their very next chance, in the 1982 session, lawmakers enriched their pensions, creating bonanzas for the bulk of sitting members, an act that is remembered to this day as the “greed bill.”
How the Pension Bonanza Came About
The Senate Republican leadership in March 2005 inserted the pension language into an innocuous bill that came over from the Democrat-controlled House.
Sen. Damon Thayer, R-Georgetown, was chairman of the State Government Committee, where the switcheroo took place. Four of the five Senate Republican leaders – David Williams, Dan Kelly, Richie Sanders and Dan Seum – voted for the bill on the Senate floor that day. Sen. Katie Stine, president pro tem, did not vote when the bill came up, one of six senators who did not cast a vote. The bill passed the Senate 30-2, and then passed the House the same day, 48-36.
In the bill they enacted, HB 299, legislators made five major changes to their pensions.
1. They lowered from 30 to 27 the number of years they must serve before they can start drawing their pension prior to age 65 without an early withdrawal penalty.
2. They fixed it so that any member who was not in the legislative retirement plan could join, by a certain date, and be eligible for the bonanzas to come.
3. They lowered the salary multiplying-factor used in figuring their pension to make it a “high three” instead of a “high five” — the only pension system with a “high three” among the six systems administered by the state.
4. They eliminated their $27,500 “assumed” salary as a multiplying-factor and replaced it with their real salary so that change No. 5 below would make sense.
5. They bestowed upon themselves a pension privilege called “reciprocity,” which means all legislators serving in the 2005 session, when they passed these changes, and all legislators elected in future years, could calculate their pensions NOT on their part-time salary as a legislator but on their full-time salary at another state or local government job after they left the legislature or before they came. The only restriction being, the pre- or post-legislative job must be covered by one of Kentucky’s other government-administered pension systems.
Reciprocity is what allows lawmakers to convert their standard pensions into super pensions. Judges don’t have reciprocity, but all others in the state retirement systems do; and it’s on that point that some legislators rationalize it for themselves. There is a big difference, however. The service credit rate (the percentage figure used in calculating pensions) is greater for legislators — in a few instances, much greater – than it is for other government employees, except judges. In 1982, lawmakers lowered their percentage rate — and the judges’ — to make them equal at 2.75 percent.
Lawmakers are considered part-time employees, while judges and other government employees work full-time.
Second Pension
In 1998, legislators voted themselves an automatic second pension, this one in the same retirement system as county and state employees. The second pension takes effect when their legislative pensions max out. The authority for this double dipping is KRS 62.680(3), written by former state Sen. Albert Robinson, R-London.
\Today, seven serving legislators have second pensions – Sens. Walter Blevins and David Boswell, and Reps. Tom Burch, Danny Ford, Jody Richards, Tom Riner and Greg Stumbo. An eighth legislator, Rep. Harry Moberly, dropped his second pension at KERS so he could enroll in the teachers’ retirement system through his employer, Eastern Kentucky University, which will substantially increase his legislative pension.
Rep. Harry Moberly
Rep. Harry Moberly entered the legislature with the Freshman Class of 1980, and has served 29 years. Members of the 1980s class were assigned a service credit rate (SCR) of 4.15 percent. Only Moberly and Speaker Stumbo today have that rate. (Only four legislators, currently serving, have the highest rate, which is 5.0 percent: Sen. David Boswell and Reps. Tom Burch, Jody Richards and Tom Riner; and three legislators have 3.5 percent: Sens. Walter Blevins and Dan Seum, and Rep. Danny Ford. All others have 2.75.)
Moberly’s employer is Eastern Kentucky University, where he’s vice president of Administrative Affairs at $168,686 a year. On Dec. 31, 2004, after 25 years of legislative serve, he maxed out on his legislative pension — meaning he can draw 100 percent of his salary when he starts his pension.
Moberly’s current “high-three” salary from his legislative service is $41,035. He’s 59 years old and can start drawing his legislative pension next year without an early retirement penalty. So Moberly can draw 100 percent of his salary. However, thanks to reciprocity, his salary won’ be what he earned in the legislature, it will be what he’s earning at the university, which is four times greater than his legislative pay. And, presumably, the EKU pay will increase each year, so the longer he waits to start his legislative pension, the larger it will be.
As of right now, Moberly’s legislative pension would be about $168,686 a year for the rest of his life. That’s $127,651 per year more as a result of the 2005 legislation; that’s a lifetime windfall estimate at $2.6 million. He voted for the bill.
Sen. Dan Kelly
If Sen. Dan Kelly is offered and accepts the judgeship, it could more than double his legislative pension from about $30,000 a year to about $64,000, and a lifetime increase estimated at $645,000. That’s a minimum. It could be substantially higher if he has bought five years of “air time,” as he’s entitled to do after 15 years in the legislature, and also has bought credit for his military service. Then, he could draw 100 percent of the judge’s pay as his legislative pension after being a judge for three years. In that case, his legislative pension could be at least $123,384 a year, and a lifetime increase estimated at $2,333,191. He voted for the bill.
In other words, if Kelly is appointed circuit judge and then serves three years in that capacity, it’s like someone offering him $2.3 million to take the job (collectible monthly when he starts drawing his legislative pension). And that doesn’t count his salary as a judge or his second pension as a judge.
Labor Cabinet Secretary J.R. Gray
When Beshear was appointing his cabinet secretaries right after the November 2007 election, he picked then-state Rep. J.R. Gray, D-Benton, to head the Labor Cabinet. Gray came to Frankfort as a lawmaker in 1976. Therefore, his pension percent rate is 5 percent. His salary as a cabinet secretary is $136,500 a year, according to The Courier-Journal salary Web site. If he stays on at the Labor Cabinet through December of next year, that would give him three years and, therefore, his “high three” would be his cabinet secretary pay.
The 2005 legislation enriches Gray’s legislative pension by an estimated $1.2 million – a bonus, so to speak, of more than $400,000 a year (for three years), on top of his $136,500-a-year salary. Said another way: The systems are giving Gray more than a half-million dollars a year (salary + enhanced pension for three years) to head the Labor Cabinet. That’s four times more than any other cabinet secretary is paid (and, yes, that’s a fair assessment; it’s just that the bulk of this compensation is channeled through his legislative pension). He voted for HB 299.
House Speaker Greg Stumbo
Speaker Greg Stumbo is also a big winner with the legislative pension bonanza, even though he was not serving in the legislature when HB 299 was enacted in 2005: at the time, he was attorney general. Nonetheless, he will reap an estimated $1,244,694 extra as a result of the bill, because he returned to the legislature. The 2005 legislation, you will remember, applies also to legislators elected in the future.
Within a month after Beshear was sworn into the governor’s office, Stumbo met with him and almost immediately afterward, freshman state Rep. Brandon Spencer, D-Prestonsburg, who held Stumbo’s old House seat in District 95, suddenly resigned. The governor called a special election to fill Spencer’s unexpired term, and Stumbo won that special election on Feb. 5, 2008.
Three weeks later, on Feb. 29, 2008, back in the legislature, Stumbo maxed out on his legislative pension at 24 years and two months. In summary, returning to the legislature made him eligible to draw his legislative pension figured on his salary as attorney general; to max out his pension made him eligible (he otherwise would not have been eligible) to draw 100 percent of his AG salary (high three averaged); and it triggered the 1998 law that provided him with a second pension to succeed the one he maxed out on – the second pension is not in the Legislators Retirement Plan, but in the county and state employees’ plan, where he already has a pension account from being a state employee during his four years as AG.
Stumbo will draw 100 percent of his AG salary, $98,824 a year, every year for the rest of his life once he starts drawing his legislative pension, which could only have occurred if he returned to the legislature.
Without the reciprocity provision in the 2005 law, and without him returning to the legislature, Stumbo’s legislative pension would be around $39,792 a year. So, his decision to return to the legislature was more than it appeared at the time. It gave Stumbo an extra $63,311 a year for the rest of his life once he starts to draw, which could be at age 61 – that’s when he can begin his pension without a penalty for early withdrawal. It’s a lifetime windfall estimated at $1,244,694, a nice reward for winning one election (which really wasn’t much of an election at all – Stumbo won 80 percent of the vote).
As Stumbo’s return to the legislature shows, a break in service has no bearing on service years previously accumulated. In tallying Stumbo’s total years of service, for the purposes of calculating his legislative pension, his four-year absence was a non-factor.
Sen. David Boswell
Sen. David Boswell entered the legislature as a member of the House in 1978, so he has a 5 percent service credit rate. He had been in the House six years by 1983 when he was elected commissioner of Agriculture – serving in that capacity during the administration of Gov. Martha Layne Collins.
In 1990, Boswell was elected to the Senate, where he has served continuously. This year marks 26 years he’s been a lawmaker. Because his percentage multiplier is high, he maxed out in his legislative pension on Dec. 31, 2004, and immediately began a second legislative pension in the KERS.
Boswell will be 60 on Nov. 20. He has not started drawing his legislative pension, so he has options. If he were to start drawing his pension in November, which he can do without penalty, the pension would be figured not on his salary in the legislature but on his salary as commissioner of Agriculture. His “high-three” in that job was $53,757, which would give him a $69,880-a-year pension instead of $50,161 a year if it were based on his legislative income. Over a lifetime, his four years as ag commissioner guarantees him an extra $402,676.
But his higher pension from being Ag commissioner may not be the final job that would increase his legislative pension. Boswell is considering three options for next year: (1) a re-election bid to the state Senate; (2) a rematch with Congressman Brett Guthrie in the 2nd U.S. House District; or (3) a run for county judge-executive in Daviess County. The latter would boost Boswell’s legislative pension an estimated $1.1 million – above his standard legislative pension.
In Daviess County, the judge-executive’s annual salary is $100,548, plus an annual $3,600 stipend from the Kentucky Transportation Cabinet. The stipend is taxable income, so it’s included in the pension formula. (All 120 judge-executives receive the stipend in the same amount.)
Perhaps making the judge-executive’s race even more attractive for Boswell, the current officeholder, Reid Haire, has announced he will not seek re-election. If Boswell were to win that race and serve at least three years (it’s a four-year term), it would raise his legislative pension to $104,148 a year. He could quit after three years and still walk away with a million dollars (lifetime), added to his legislative pension. He voted for HB 299.
Lt. Gov. Daniel Mongiardo
Lt. Gov. Daniel Mongiardo, 49, was a member of the Senate in 2005 and, therefore, can draw his legislative pension – when that time comes – based on his lieutenant governor’s salary. He served seven years in the Senate, during which time his high-three salary was $33,397. When he reaches age 64, he could begin drawing his legislative pension without an early withdrawal penalty, and, based on his Senate salary his legislative pension would be $6,429 a year. However, his pension won’t be figured on his salary in the legislature, as we’ve said; it will be figured on his salary as lieutenant governor, which is $105,744.
So, being lieutenant government increases Mongiardo’s legislative pension to $20,356 a year, or an extra $232,995 lifetime total. He did not vote for or against the bill.
Frank Rasche
Ex-legislator Frank Rasche, D-Paducah, served 15 years in the House before resigning in 2008 to accept an $80,000-a-year position in the Beshear administration in the Education and Workforce Development Cabinet. That state job increases his legislative pension to $33,000 a year from $14, 841 – a gain of $18,159 a year for the rest of his life. The lifetime gain is estimated at $329,949. He voted for the bill.
Jon Draud
Ex-legislator Jon Draud served nine years in the House before resigning to become state Education commissioner at $220,000 a year. He held that job only one year, but it counts as one of his “high three” in calculating his legislative pension, and it moved his legislative pension up from $9,247 to $22,876 annually, a gain of $13,629 a year, or, over a lifetime, $172,545.
Had Draud stayed on the job three years as Education commissioner, he would have received – through his legislative pension – a bonus of $572,270. With that, his monthly pension would have jumped to $45,203. He voted against the bill.
Joe Barrows
Ex-legislator Joe Barrows, D-Versailles, missed out on more than $700,000 because he began drawing his legislative pension before he started his state job this summer in the Office of Homeland Security. Once a legislator, or ex-legislator, begins drawing his or her legislative pension, it closes the door forever on the reciprocity provision in the 2005 law for that particular legislative pension. He voted for the bill.
What if ...
What if all legislators with 20 years of service became county judge-executives?
To further reveal the magnitude of the rich benefits that legislators bestowed upon themselves through enactment of the 2005 law, Kentucky Roll Call filed open records requests with the Legislative Research Commission and obtained the taxable income for the most recent six years on all current legislators who have served 20 years or more in the legislature, or will have served 20 years at the end of next year. From the taxable income information (that’s the income the legislator reports to the IRS), we did the math and came up with each legislator’s “high three” salary (average of the highest three years), which we then used to figure the legislator’s legislative pension, based on a hypothetical scenario where he or she leaves the legislature on Dec. 31, 2010.
We expanded the hypothesis to have each of these 25 legislators run for county judge-executive in 2010 – rather than seeking re-election to the legislature. In Fayette and Jefferson counties, which have city-county consolidated governments, we replaced judge-executive in the formula with the metro mayor, and applied the formula to the legislators who live in those two counties. The mayor’s job in Lexington pays $120,574 a year; and the mayor’s job in Louisville pays $105,746.
How much would this enrich these selected legislators’ legislative pensions, if they were elected county judge-executive, or mayor if they live in Fayette or Jefferson counties? On average, it would enrich each legislators’ pension by $610,776 over the lawmakers’ lifetimes. Boswell would strike the Mother lode – an estimated $1,192,425.
The Legislative Ethics Commission said there was no violation of the ethic code when legislators voted in favor of the pension-enrichment bill and then benefited from it directly. The agency’s rationale: The opportunity applies to all members. Of course, the agency is only interpreting the ethics law as written by those who are drawing the pensions.
Frankfort Culture
Frankfort is a culture of pensions. It’s common to find people drawing two, even three government pensions. Legislators have joined the parade, and the magnitude of it on the legislative process and Kentucky politics should not be underestimated.
We don’t know if the governor is keeping a list. What we do know is, Beshear has received many requests for state jobs from members of the House and Senate – not jobs for their constituents, but for themselves. For the pensions! You see what lies ahead.
By Lowell Reese
Kentucky Roll Call
Sept. 22, 209
A Primer: KY Lawmakers Pension System
What’s At Issue?
The pension and health insurance benefits paid to Kentucky’s legislators and ex-legislators have taken on a substantial financial and political air, especially since the 2005 enactment of HB 299, a pension-enrichment bill. The legislators voted themselves richer pension opportunities and gave the governor a powerful tool that may change the dynamics of the Kentucky General Assembly – and lobbying.
Why It’s Important
Three reasons: (a) Legislators have bestowed government-paid pension benefits upon themselves far in excess of the retirement benefits available to other government employees – especially when considering that being a legislator is a part-time job; (b) legislators’ retirement benefits outpace those of state and local government employees to such an extent that the legislature has seriously compromised its ability to tackle the $29.7 billion unfunded liability of the state’s other retirement systems; and (c) the 2005 legislation that opened the gate to these super-rich pensions for legislators has a serious unintended consequence – it handed the office of the governor a new tool that he and all future governors can use to sway legislators on votes and even to resign their seats. The carrot is a gubernatorial appointment to a government job that a legislator can hold for three years and boost his or her legislative pension, in some instances, more than $1 million over a lifetime.
Background
Members of the General Assembly created a retirement system for themselves in 1980. All other government entities, including judges, already had a retirement program by that time. The lawmakers modeled their plan on the judges’ retirement system, which began in 1960 with a 5 percent service credit rate (SCR), or benefit factor, as some call it.
The SCR percentage is one the three factors used in calculating the size of the pension check, the other two factors are years of service and salary.
In 1976, voters approved a constitutional amendment to re-structure the court system. That’s when the Kentucky Supreme Court was created. It also resulted in an adjustment to judges’ pensions, among which the service credit rate percentage was lowered from 5 to 4.15.
Four years later, in forming its own pension plan, the legislature chose 3.5 as its percentage factor and based its annual salary – for purposes of calculating a pension – on $27,500, which was an “assumed” figure, not actual. Legislative salaries in real dollars were considerably lower at that time.
At their very next chance, the 1982 session, legislators made their pensions richer by giving everyone who had served more than four years a 5 percent service credit rate, up from the 3.5 percent. That significantly enriched the pensions of everyone who entered the legislature during or before 1978, which, of course, included the bulk of those who voted for the change. The action became widely known as the “greed bill.”
In that same 1982 session, the legislature set the pension percentage rate for the freshman class that year, and all years to follow, at 2.75 percent – and they applied it to judges. So, right now the judges and legislators who entered service in 1982 or later have the same 2.75 percent rate.
In 1998, the legislators voted themselves an automatic second pension – not as legislators but as employees of the commonwealth – once they reached 100 percent of their legislative pension. The second pension is in the Kentucky Employees Retirement System.
Then the really big one came: In the 2005 session, the legislators made five major changes to their pensions.
1. They lowered from 30 to 27 the number of years a legislator must serve before he or she can start drawing a pension prior to age 65 without a penalty for early withdrawal.
2. Legislators who heretofore were not enrolled in the Legislators Retirement Plan, but were in another government-administered plan, were given a window in which they could transfer to the LRP by Aug. 31 of that year, making them eligible for the pension bonanza to come.
3. They lowered the salary component used in figuring a legislator’s pension, making it an average of the legislator’s best three salary years instead of the best five salary years.
4. They changed the salary component used in figuring a legislator’s pension by replacing their annual “assumed salary” with their real salary, meaning their taxable income as reported on their W-2 to the IRS.
5. Items No. 2, 3 and 4 above set the stage for the granddaddy of the changes – the reciprocity language, which says legislators who were serving in the 2005 session, and all future legislators, could now base their pension NOT on their part-time salary as a legislator but on their full-time salary from another state or local government job after they left the legislature (or before they came). The only restriction being, the pre- or post-legislative job must be covered by one of Kentucky’s other government-administered pension systems.
Judges have no such reciprocity, now the only government employees who don’t.
Anatomy of the Plan
The retirement system for state legislators, called the Legislators Retirement Plan, is one of our state’s six government-administered retirement systems.
1. Legislators Retirement Plan
2. Judicial Retirement Plan
3. Kentucky Teachers Retirement System
4. County Employees Retirement System
5. State Police Retirement System
6. Kentucky Employees Retirement System
The legislators’ and judges’ retirement systems are administered jointly under what’s called the Kentucky Judicial Form Retirement System. The funds are not co-mingled. Likewise, the county, state and state police retirement systems come under the umbrella of the Kentucky Retirement Systems, and the funds there are not co-mingled.
Each system has two funds – a pension fund and a health insurance fund.
Further, the Kentucky Retirement Systems, which is primarily for city, county and state employees, has two categories of retirees: those who work in hazardous jobs, such as police and firefighters; and those who work in non-hazardous. The rules are somewhat different for hazardous and non-hazardous jobs. Teachers, legislators and judges do not have hazardous categories.
KERS serves the vast majority of state employees, but not the state police, legislators and judges. CERS serves employees of city and county governments, including school boards, and its funding comes from the budgets of local governments (and from investments and employee contributions).
The Kentucky Teachers’ Retirement System includes teachers, of course. But it’s more than K-12. Also included are university professors and some university employees – the requirement is a four-year degree. Some legislators – those who work or have worked in the school systems or for a state university – may opt to be in KTRS instead of the legislators’ plan.
No person, however, can be enrolled as a contributing participant in more than one retirement system at the same time. A key word in that sentence is “contributing” – a whole lot of government employees have second and even third government pensions.
By the will of the legislature, knowing who is enrolled in a particular government pension system, and also who is drawing one, two or three pensions is one of Frankfort’s greatest secrets. There’s no specific law that prohibits the release of information on legislators’ pensions; instead, the Legislators Retirement Plan acts from an attorney general’s opinion and releases enough information so the public can reasonably figure out (but not exactly) what a legislator’s pension would be.
Available Information
There are a number of exemptions to the Kentucky Open Records Act, the most notable being virtually the entire judicial branch of government. Some court records, nonetheless, are open to the public. The Administrative Office of the Court provides this explanation:
Kentucky Judicial Branch and Open Records Policy
Court records are under the control of the Supreme Court of Kentucky and as such are not subject to the Open Records Act, KRS 26A.200; KRS 26A.220; Ex parte Farley, Ky., 570 S.W. 2d 617, 624-625 (1978). However, the Administrative Office of the Courts (AOC) does release information as a matter of comity when possible. These requests are considered on a case-by-case basis and are usually granted unless to do so would compromise the business of the court system. We consider many of our records public and release them accordingly when requested.
The judges’ pension plan also is somewhat of an exception here. It’s governed by the same attorney general opinion as the legislators’ in releasing pension information.
Don’t bother to ask who is enrolled or drawing a pension(s) in the teachers’ retirement system or the Kentucky Retirement Systems – the staff won’t tell you, on grounds the information is protected by state law.
The Legislators Retirement Plan and the Judicial Retirement Plan are a little looser, but they still keep such simple information as “who’s drawing a pension and when did they start” confidential.
Other information that the Legislators Retirement Plan withholds from taxpayers is, whether (and when) a legislator buys “time,” such as years served in the National Guard, government jobs, and, believe it or not, “air” time – which is exactly what it says, out of the air. After serving 15 years in the General Assembly, a legislator can buy five years of “air time,” which can’t be used until he or she reaches 20 years of actual service.
There are four parts of a legislator’s pension, however, that are subject to the Open Records law, in accordance with a 1999 Attorney General opinion (99-ORD-209), which the LRP uses as its guide.
1. The LRP can tell us whether a legislator is enrolled in its plan.
2. The LRP can tell us a legislator’s or an ex-legislator’s serve credit rate.
3. The LRP can tell us a legislator’s or ex-legislator’s high three salary.
4. The LRP can tell us the period (years) a legislator served.
That’s it. No information about “bought time,” no information that would identify who is drawing a pension or when they started drawing it.
Figuring a Lawmaker’s Pension
Pension payouts, from government-administered retirement systems, are distributed according to a three-factor formula: The number of years and months of service, average salary and a percentage figure, which for most legislators – those who came in 1982 and afterward – is 2.75 percent. Simply multiple the three factors: years x salary x percent. For example, a legislator with 20 years of service, a high-three salary of $40,000 and a percentage multiplier of 2.75 percent would draw a pension of $22,000 a year. After 36 years and about four months of legislative service, the pension is 100 percent of the $40,000 salary.
The legislators’ pensions are based on years and months of service, and each new service year begins on July 1, a date that’s only coincidental to the state’s fiscal calendar.
The salary part is the average of the highest three years, and that’s why it’s called the high three. That’s not limited to the last three years – it’s any time during the legislator’s service, even after they have reached the 100 percent threshold, or “maxed out,” and quit contributing to their legislative pension plans, or, in some cases, have started a second pension. It’s their high three in government service, which now includes positions held before, during or after service in the legislature.
Service Credit Rate for Legislators
The percentage used in figuring pension payout is a crucial element. The slightest change in the percent can meaningfully alter the pension check.
Judges and legislators who entered service in 1982 or later (the bulk of those now serving) have a service credit rate of 2.75 percent. A state employee’s rate is around 2.0 percent; there’s a slight range, and it’s lower for those employed Sept. 1, 2008 and later. County employees have a rate of 2.2 percent.
A few members of the current legislature were serving in 1978 and earlier; they have the highest SCR of all at 5 percent: Those who came in 1980 have 4.15 percent, and for those who came in 1981, it’s 3.5 percent. The rest are at 2.75.
Thresholds
There are designated years of service markers along the pension path.
1. Five years: For each five years of service, a legislator may reduce by one year drawing his or her pension before age 65 without an early withdrawal penalty. For example, after 20 years of service a legislator can retire at age 61.
2. Fifteen years: After 15 years of service, a legislator may purchase “five years of air time,” but can’t use it until he or she reaches 20 years of actual service.
3. Twenty years: After the completion of 20 years, the retirement plan pays 100 percent of the health care insurance costs for the lawmaker, his or her spouse and dependent children.
4. Twenty-seven years: After 27 years of service, legislators may start drawing their pensions at any time before age 65 without an early withdrawal penalty.
5. Thirty-six years: After 36 years and about four months, a lawmaker with a SCR of 2.75 can retire at 100 percent of his or her high three salary. (Those with a 5 percent SCR reach that milestone in 20 years; those with a 4.15 in 24 years and about one month; and those with a 3.5 in 28 years and about seven months. By comparison, a state employee with a 2 percent SCR would have to work 50 years for his or her pension to be 100 percent of their salary.)
Retirement Age
At age 65 legislators may start their legislative pension without an early withdrawal penalty. They can begin drawing their pensions any time after they leave the General Assembly, but the dollar value of a pension is reduced 5 percent for each year that’s early – except, there is no early withdrawal penalty for those who have 27 years of government service. After 27 years of government service, which includes service in any of the state’s six government-administered retirement plans, there are is no age restriction on legislative pensions.
The Second Pension
Once a legislator completes enough years in the General Assembly to max out (draw 100 percent) of the legislative pension, a second pension is started automatically for him or her in the Kentucky Employees Retirement System. The authority for the automatic double dipping is in KRS 62.680(3), written by former state Sen. Albert Robinson, R-London, in the 1998 session.
Today, seven lawmakers have a second pension going: State Sens. Walter Blevins, D-West Liberty, and David Boswell, D-Owensboro; state Reps. Tom Burch, D-Louisville; Danny Ford, R-Mt. Vernon; Jody Richards, D-Bowling Green; Tom Riner, D-Louisville; and Greg Stumbo, D-Prestonsburg. An eighth legislator, state Rep. Harry Moberly, D-Richmond, dropped his second pension at KERS so he could enroll in the teachers’ retirement system through his university employer, a move that will substantially increase his General Assembly pension, in accordance with the 2005 session changes.
Post- or Pre-legislative Jobs
In the 29-year history of the pension system for legislators, no amendment to increase benefits has been more substantial than the “reciprocity” provision that legislators adopted in 2005. They changed the law to allow themselves to base their General Assembly pension not on their salary as a legislator but on their salary at a job they held before or after they came to the legislature – the caveat being, the external job must be in government.
Since being a legislator is part-time and the other government jobs are full-time, the math is pretty simple: the annual salary at the full-time job is greater and, therefore, the legislator’s pension check is larger. In some cases, it’s really larger.
100 Percent Health Care Coverage
Health care cost is a major concern for citizens, except for citizen-legislators once they reach the threshold of having served 20 years in the General Assembly. Beyond that time, for the rest of their lives, the legislators’ retirement package pays 100 percent of the health care insurance premiums for legislators – and for their spouses and dependent children – except when Medicare starts at age 65 for the legislator. Then, the retirement plan pays only the supplement insurance premiums.
And legislators are not bare on the front end. The insurance premium payment is graduated. After the completion of four years in the legislature, the retirement plan pays 25 percent of the legislators’ health insurance premiums; after 10 years, it goes to 50 percent; and then coverage increases in increments of 5 percent each year, reaching 100 percent at the end of 20 years. This is related to buying five years of “air” time after a legislator has served 15 years, but can’t use until after 20 years.
Only lawmakers and the state police have this 20-year health care insurance benefit.
Restrictions
1. A legislator cannot be enrolled in two government-administered retirement systems at the same time.
2. A legislator’s pension from service in the General Assembly cannot be greater than 100 percent of his or her high three salary.
3. A legislator cannot begin drawing his or her pension prior to the age of 65 without an early withdrawal penalty, except it can be drawn anytime if the legislator has 27 years of government service. Also, the start date is reduced one year for each five years of service.
4. Once a legislator starts drawing a General Assembly pension, he or she is no longer eligible to enrich the pension from employment in another government job.
Other Points
1. Of the 138 current legislators, nine have had a break-in-service. One served a term as commissioner of agriculture (state Sen. David Boswell, D-Owensboro), another as attorney general (House Speaker Greg Stumbo, D-Prestonsburg), and so on. A break itself does not disrupt any retirement benefits for service in the legislature. The pension is based on the total number of years served in the legislature. Even if there were a break in service, the enhancements enacted in 2005 would still apply, because the pension is based on the number of years accrued in the Legislators Retirement Plan as a contributing member.
2. A legislator becomes “vested” (can thereafter draw pension benefits) after five years of legislative service or eight years of total government service. That is, a legislator with only two years of legislative service – one term in the House of Representatives, for instance – will draw a pension if he or she had at least six years of total government service, but the pension would be figured only on the two years in the legislature.
3. Legislators who have had a break in service and worked in a government job during the interim and who later are re-elected to the legislature may transfer the years of service in the interim government job to their legislative retirement plan, but they may have to pay a stiff penalty based on an actuarial assessment of the liability of the transfer – the amount it would cost the Legislators’ Retirement System in higher pension payouts to the individual. Ex-legislators cannot transfer years of service, but they can, however, make the transfer once they are re-elected and are contributing to the Legislators Retirement System.
4. Each of the state’s retirement systems calculates its pension benefits based on the number of years of service in its own system.
5. Only legislators have a high three. Judges and all other government employees have a high five.
Liability
About 20 percent to 25 percent of the payout for retirement benefits for legislators comes from funds appropriated to the Legislators Retirement Plan by the General Assembly. Legislators contribute 5 percent of their salaries, which comprises roughly 5 percent to 10 percent of the retirement fund’s annual $45 million budget. The rest comes from investments. As of July 1, 2008, the LRP had a $1.8 million surplus. However, this past year has been a difficult one for return on investments; an actuarial report on FY 2009 is expected to show an unfunded liability.
By Lowell Reese
Kentucky Roll Call
Sept. 22, 2009
The pension and health insurance benefits paid to Kentucky’s legislators and ex-legislators have taken on a substantial financial and political air, especially since the 2005 enactment of HB 299, a pension-enrichment bill. The legislators voted themselves richer pension opportunities and gave the governor a powerful tool that may change the dynamics of the Kentucky General Assembly – and lobbying.
Why It’s Important
Three reasons: (a) Legislators have bestowed government-paid pension benefits upon themselves far in excess of the retirement benefits available to other government employees – especially when considering that being a legislator is a part-time job; (b) legislators’ retirement benefits outpace those of state and local government employees to such an extent that the legislature has seriously compromised its ability to tackle the $29.7 billion unfunded liability of the state’s other retirement systems; and (c) the 2005 legislation that opened the gate to these super-rich pensions for legislators has a serious unintended consequence – it handed the office of the governor a new tool that he and all future governors can use to sway legislators on votes and even to resign their seats. The carrot is a gubernatorial appointment to a government job that a legislator can hold for three years and boost his or her legislative pension, in some instances, more than $1 million over a lifetime.
Background
Members of the General Assembly created a retirement system for themselves in 1980. All other government entities, including judges, already had a retirement program by that time. The lawmakers modeled their plan on the judges’ retirement system, which began in 1960 with a 5 percent service credit rate (SCR), or benefit factor, as some call it.
The SCR percentage is one the three factors used in calculating the size of the pension check, the other two factors are years of service and salary.
In 1976, voters approved a constitutional amendment to re-structure the court system. That’s when the Kentucky Supreme Court was created. It also resulted in an adjustment to judges’ pensions, among which the service credit rate percentage was lowered from 5 to 4.15.
Four years later, in forming its own pension plan, the legislature chose 3.5 as its percentage factor and based its annual salary – for purposes of calculating a pension – on $27,500, which was an “assumed” figure, not actual. Legislative salaries in real dollars were considerably lower at that time.
At their very next chance, the 1982 session, legislators made their pensions richer by giving everyone who had served more than four years a 5 percent service credit rate, up from the 3.5 percent. That significantly enriched the pensions of everyone who entered the legislature during or before 1978, which, of course, included the bulk of those who voted for the change. The action became widely known as the “greed bill.”
In that same 1982 session, the legislature set the pension percentage rate for the freshman class that year, and all years to follow, at 2.75 percent – and they applied it to judges. So, right now the judges and legislators who entered service in 1982 or later have the same 2.75 percent rate.
In 1998, the legislators voted themselves an automatic second pension – not as legislators but as employees of the commonwealth – once they reached 100 percent of their legislative pension. The second pension is in the Kentucky Employees Retirement System.
Then the really big one came: In the 2005 session, the legislators made five major changes to their pensions.
1. They lowered from 30 to 27 the number of years a legislator must serve before he or she can start drawing a pension prior to age 65 without a penalty for early withdrawal.
2. Legislators who heretofore were not enrolled in the Legislators Retirement Plan, but were in another government-administered plan, were given a window in which they could transfer to the LRP by Aug. 31 of that year, making them eligible for the pension bonanza to come.
3. They lowered the salary component used in figuring a legislator’s pension, making it an average of the legislator’s best three salary years instead of the best five salary years.
4. They changed the salary component used in figuring a legislator’s pension by replacing their annual “assumed salary” with their real salary, meaning their taxable income as reported on their W-2 to the IRS.
5. Items No. 2, 3 and 4 above set the stage for the granddaddy of the changes – the reciprocity language, which says legislators who were serving in the 2005 session, and all future legislators, could now base their pension NOT on their part-time salary as a legislator but on their full-time salary from another state or local government job after they left the legislature (or before they came). The only restriction being, the pre- or post-legislative job must be covered by one of Kentucky’s other government-administered pension systems.
Judges have no such reciprocity, now the only government employees who don’t.
Anatomy of the Plan
The retirement system for state legislators, called the Legislators Retirement Plan, is one of our state’s six government-administered retirement systems.
1. Legislators Retirement Plan
2. Judicial Retirement Plan
3. Kentucky Teachers Retirement System
4. County Employees Retirement System
5. State Police Retirement System
6. Kentucky Employees Retirement System
The legislators’ and judges’ retirement systems are administered jointly under what’s called the Kentucky Judicial Form Retirement System. The funds are not co-mingled. Likewise, the county, state and state police retirement systems come under the umbrella of the Kentucky Retirement Systems, and the funds there are not co-mingled.
Each system has two funds – a pension fund and a health insurance fund.
Further, the Kentucky Retirement Systems, which is primarily for city, county and state employees, has two categories of retirees: those who work in hazardous jobs, such as police and firefighters; and those who work in non-hazardous. The rules are somewhat different for hazardous and non-hazardous jobs. Teachers, legislators and judges do not have hazardous categories.
KERS serves the vast majority of state employees, but not the state police, legislators and judges. CERS serves employees of city and county governments, including school boards, and its funding comes from the budgets of local governments (and from investments and employee contributions).
The Kentucky Teachers’ Retirement System includes teachers, of course. But it’s more than K-12. Also included are university professors and some university employees – the requirement is a four-year degree. Some legislators – those who work or have worked in the school systems or for a state university – may opt to be in KTRS instead of the legislators’ plan.
No person, however, can be enrolled as a contributing participant in more than one retirement system at the same time. A key word in that sentence is “contributing” – a whole lot of government employees have second and even third government pensions.
By the will of the legislature, knowing who is enrolled in a particular government pension system, and also who is drawing one, two or three pensions is one of Frankfort’s greatest secrets. There’s no specific law that prohibits the release of information on legislators’ pensions; instead, the Legislators Retirement Plan acts from an attorney general’s opinion and releases enough information so the public can reasonably figure out (but not exactly) what a legislator’s pension would be.
Available Information
There are a number of exemptions to the Kentucky Open Records Act, the most notable being virtually the entire judicial branch of government. Some court records, nonetheless, are open to the public. The Administrative Office of the Court provides this explanation:
Kentucky Judicial Branch and Open Records Policy
Court records are under the control of the Supreme Court of Kentucky and as such are not subject to the Open Records Act, KRS 26A.200; KRS 26A.220; Ex parte Farley, Ky., 570 S.W. 2d 617, 624-625 (1978). However, the Administrative Office of the Courts (AOC) does release information as a matter of comity when possible. These requests are considered on a case-by-case basis and are usually granted unless to do so would compromise the business of the court system. We consider many of our records public and release them accordingly when requested.
The judges’ pension plan also is somewhat of an exception here. It’s governed by the same attorney general opinion as the legislators’ in releasing pension information.
Don’t bother to ask who is enrolled or drawing a pension(s) in the teachers’ retirement system or the Kentucky Retirement Systems – the staff won’t tell you, on grounds the information is protected by state law.
The Legislators Retirement Plan and the Judicial Retirement Plan are a little looser, but they still keep such simple information as “who’s drawing a pension and when did they start” confidential.
Other information that the Legislators Retirement Plan withholds from taxpayers is, whether (and when) a legislator buys “time,” such as years served in the National Guard, government jobs, and, believe it or not, “air” time – which is exactly what it says, out of the air. After serving 15 years in the General Assembly, a legislator can buy five years of “air time,” which can’t be used until he or she reaches 20 years of actual service.
There are four parts of a legislator’s pension, however, that are subject to the Open Records law, in accordance with a 1999 Attorney General opinion (99-ORD-209), which the LRP uses as its guide.
1. The LRP can tell us whether a legislator is enrolled in its plan.
2. The LRP can tell us a legislator’s or an ex-legislator’s serve credit rate.
3. The LRP can tell us a legislator’s or ex-legislator’s high three salary.
4. The LRP can tell us the period (years) a legislator served.
That’s it. No information about “bought time,” no information that would identify who is drawing a pension or when they started drawing it.
Figuring a Lawmaker’s Pension
Pension payouts, from government-administered retirement systems, are distributed according to a three-factor formula: The number of years and months of service, average salary and a percentage figure, which for most legislators – those who came in 1982 and afterward – is 2.75 percent. Simply multiple the three factors: years x salary x percent. For example, a legislator with 20 years of service, a high-three salary of $40,000 and a percentage multiplier of 2.75 percent would draw a pension of $22,000 a year. After 36 years and about four months of legislative service, the pension is 100 percent of the $40,000 salary.
The legislators’ pensions are based on years and months of service, and each new service year begins on July 1, a date that’s only coincidental to the state’s fiscal calendar.
The salary part is the average of the highest three years, and that’s why it’s called the high three. That’s not limited to the last three years – it’s any time during the legislator’s service, even after they have reached the 100 percent threshold, or “maxed out,” and quit contributing to their legislative pension plans, or, in some cases, have started a second pension. It’s their high three in government service, which now includes positions held before, during or after service in the legislature.
Service Credit Rate for Legislators
The percentage used in figuring pension payout is a crucial element. The slightest change in the percent can meaningfully alter the pension check.
Judges and legislators who entered service in 1982 or later (the bulk of those now serving) have a service credit rate of 2.75 percent. A state employee’s rate is around 2.0 percent; there’s a slight range, and it’s lower for those employed Sept. 1, 2008 and later. County employees have a rate of 2.2 percent.
A few members of the current legislature were serving in 1978 and earlier; they have the highest SCR of all at 5 percent: Those who came in 1980 have 4.15 percent, and for those who came in 1981, it’s 3.5 percent. The rest are at 2.75.
Thresholds
There are designated years of service markers along the pension path.
1. Five years: For each five years of service, a legislator may reduce by one year drawing his or her pension before age 65 without an early withdrawal penalty. For example, after 20 years of service a legislator can retire at age 61.
2. Fifteen years: After 15 years of service, a legislator may purchase “five years of air time,” but can’t use it until he or she reaches 20 years of actual service.
3. Twenty years: After the completion of 20 years, the retirement plan pays 100 percent of the health care insurance costs for the lawmaker, his or her spouse and dependent children.
4. Twenty-seven years: After 27 years of service, legislators may start drawing their pensions at any time before age 65 without an early withdrawal penalty.
5. Thirty-six years: After 36 years and about four months, a lawmaker with a SCR of 2.75 can retire at 100 percent of his or her high three salary. (Those with a 5 percent SCR reach that milestone in 20 years; those with a 4.15 in 24 years and about one month; and those with a 3.5 in 28 years and about seven months. By comparison, a state employee with a 2 percent SCR would have to work 50 years for his or her pension to be 100 percent of their salary.)
Retirement Age
At age 65 legislators may start their legislative pension without an early withdrawal penalty. They can begin drawing their pensions any time after they leave the General Assembly, but the dollar value of a pension is reduced 5 percent for each year that’s early – except, there is no early withdrawal penalty for those who have 27 years of government service. After 27 years of government service, which includes service in any of the state’s six government-administered retirement plans, there are is no age restriction on legislative pensions.
The Second Pension
Once a legislator completes enough years in the General Assembly to max out (draw 100 percent) of the legislative pension, a second pension is started automatically for him or her in the Kentucky Employees Retirement System. The authority for the automatic double dipping is in KRS 62.680(3), written by former state Sen. Albert Robinson, R-London, in the 1998 session.
Today, seven lawmakers have a second pension going: State Sens. Walter Blevins, D-West Liberty, and David Boswell, D-Owensboro; state Reps. Tom Burch, D-Louisville; Danny Ford, R-Mt. Vernon; Jody Richards, D-Bowling Green; Tom Riner, D-Louisville; and Greg Stumbo, D-Prestonsburg. An eighth legislator, state Rep. Harry Moberly, D-Richmond, dropped his second pension at KERS so he could enroll in the teachers’ retirement system through his university employer, a move that will substantially increase his General Assembly pension, in accordance with the 2005 session changes.
Post- or Pre-legislative Jobs
In the 29-year history of the pension system for legislators, no amendment to increase benefits has been more substantial than the “reciprocity” provision that legislators adopted in 2005. They changed the law to allow themselves to base their General Assembly pension not on their salary as a legislator but on their salary at a job they held before or after they came to the legislature – the caveat being, the external job must be in government.
Since being a legislator is part-time and the other government jobs are full-time, the math is pretty simple: the annual salary at the full-time job is greater and, therefore, the legislator’s pension check is larger. In some cases, it’s really larger.
100 Percent Health Care Coverage
Health care cost is a major concern for citizens, except for citizen-legislators once they reach the threshold of having served 20 years in the General Assembly. Beyond that time, for the rest of their lives, the legislators’ retirement package pays 100 percent of the health care insurance premiums for legislators – and for their spouses and dependent children – except when Medicare starts at age 65 for the legislator. Then, the retirement plan pays only the supplement insurance premiums.
And legislators are not bare on the front end. The insurance premium payment is graduated. After the completion of four years in the legislature, the retirement plan pays 25 percent of the legislators’ health insurance premiums; after 10 years, it goes to 50 percent; and then coverage increases in increments of 5 percent each year, reaching 100 percent at the end of 20 years. This is related to buying five years of “air” time after a legislator has served 15 years, but can’t use until after 20 years.
Only lawmakers and the state police have this 20-year health care insurance benefit.
Restrictions
1. A legislator cannot be enrolled in two government-administered retirement systems at the same time.
2. A legislator’s pension from service in the General Assembly cannot be greater than 100 percent of his or her high three salary.
3. A legislator cannot begin drawing his or her pension prior to the age of 65 without an early withdrawal penalty, except it can be drawn anytime if the legislator has 27 years of government service. Also, the start date is reduced one year for each five years of service.
4. Once a legislator starts drawing a General Assembly pension, he or she is no longer eligible to enrich the pension from employment in another government job.
Other Points
1. Of the 138 current legislators, nine have had a break-in-service. One served a term as commissioner of agriculture (state Sen. David Boswell, D-Owensboro), another as attorney general (House Speaker Greg Stumbo, D-Prestonsburg), and so on. A break itself does not disrupt any retirement benefits for service in the legislature. The pension is based on the total number of years served in the legislature. Even if there were a break in service, the enhancements enacted in 2005 would still apply, because the pension is based on the number of years accrued in the Legislators Retirement Plan as a contributing member.
2. A legislator becomes “vested” (can thereafter draw pension benefits) after five years of legislative service or eight years of total government service. That is, a legislator with only two years of legislative service – one term in the House of Representatives, for instance – will draw a pension if he or she had at least six years of total government service, but the pension would be figured only on the two years in the legislature.
3. Legislators who have had a break in service and worked in a government job during the interim and who later are re-elected to the legislature may transfer the years of service in the interim government job to their legislative retirement plan, but they may have to pay a stiff penalty based on an actuarial assessment of the liability of the transfer – the amount it would cost the Legislators’ Retirement System in higher pension payouts to the individual. Ex-legislators cannot transfer years of service, but they can, however, make the transfer once they are re-elected and are contributing to the Legislators Retirement System.
4. Each of the state’s retirement systems calculates its pension benefits based on the number of years of service in its own system.
5. Only legislators have a high three. Judges and all other government employees have a high five.
Liability
About 20 percent to 25 percent of the payout for retirement benefits for legislators comes from funds appropriated to the Legislators Retirement Plan by the General Assembly. Legislators contribute 5 percent of their salaries, which comprises roughly 5 percent to 10 percent of the retirement fund’s annual $45 million budget. The rest comes from investments. As of July 1, 2008, the LRP had a $1.8 million surplus. However, this past year has been a difficult one for return on investments; an actuarial report on FY 2009 is expected to show an unfunded liability.
By Lowell Reese
Kentucky Roll Call
Sept. 22, 2009
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