BIPPS was recently honored to have Professor Gary Houchens from Western Kentucky University host a roundtable discussion on school choice for Kentucky. We captured Dr. Houchens’ great comments on video for you, and this is well worth a listen.
I recently stood in Philadelphia’s Independence Hall, where 55 delegates gathered in May 1787 to create the U.S. Constitution and form a new government.
While that hallowed room is filled with desks and other period fixtures, the only original piece of furniture is the chair occupied by the future President George Washington while presiding over the convention.
Businessmen, merchants, shippers, farmers, scientists and physicians were framers of the document that would set their new nation on a path toward unprecedented freedom and prosperity.
If doctors were included in framing the foundation of this nation’s success, you will have a hard time convincing me that Madisonville dermatologist Bill Smith, M.D., is somehow unfit to serve on the board overseeing the troubled Kentucky Retirement Systems.
Smith, who served his country for nine years, rising to the rank of lieutenant commander in the U.S. Navy, full commander in the Navy Reserve and served a tour as a flight surgeon with the Marine Corps, founded his practice in 2000 and has grown it into a multimillion-dollar operation.
Smith while building his practice has studied state and local retirement systems, including helping Madisonville successfully address challenges that threatened that city’s firefighter pension plan a few years ago.
For Smith, the solutions to saving and fixing arguably the nation’s worst government-run pension fund are not political. Rather, they involve doing the math and abiding by Kentucky’s Constitution and its statutes.
He strongly believes that decades spent ignoring Kentucky law requiring actuarial analyses of proposed benefits and benefit enhancements before they’re granted to employees or retirees has been a primary contributor to the decline of the state workers’ retirement fund – from being 74 percent funded a decade ago to currently containing only about 17 percent of the funding needed to cover future retirement benefits.
KRS bureaucrats want you to believe that the major contributor to Kentucky’s pension crisis is underfunding by the legislature and – as they occasionally admit – unproductive investments.
They vehemently oppose Smith’s appointment by Gov. Bevin to their board because the doctor’s made it known that the malady is the result of overspending in the form of enhancing benefits beyond available funding or a strategy to develop one beyond the biennial budgetary shakedowns of the General Assembly.
When it comes to enhancing benefits, for instance, the potential purchaser of a house or car must demonstrate he’s got funding – either in terms of up-front cash or the ability to make payments – before he’s allowed to move in or drive off the lot.
Smith posits the system is unsound because its leadership has performed like a buyer who purchases a house he can’t afford then goes to his employer and demands a raise because he’s “underfunded.”
This seems the model of choice for too many Frankfort politicians, who’ve offered new and increased benefits without either the funding or the required actuarial analysis. Instead, they just add the benefits’ increased costs to the funding to the state’s annual Actuarially Required Contribution (ARC). Then, when Frankfort doesn’t meet that obligation, detractors claim the system is underfunded.
It’s appalling that William Thielen, the retirement system’s overpaid and ineffective executive director, dismisses the statutorial requirement for solid analysis of what benefits cost before they’re granted as no longer acceptable.
I sat on the second row at the most recent meeting of the state’s Public Pension Oversight Board during which Sen. Jimmy Higdon, R-Lebanon, tried to impress upon Thielen that the legislature can no longer vote for benefit enhancements without at least an estimate regarding their future costs.
Thielen claimed such costs are “indeterminable.”
He knows that Smith, once he’s seated, will ask the questions, do the math and figure out what’s really going on in that huge retirement system.
No wonder Thielen obsessively opposes Smith’s appointment to the board to whom he answers.
Bluegrass Institute president Jim Waters will speak on “Can Professional Soccer Score in Louisville?” during this Wednesday’s Louisville Forum at Noon at Vincenzo’s, 150 S. Fifth St. in the River City. Waters also will participate in a panel discussion on the issue along with Amanda Duffy, president of the Louisville City Football Club (a United Soccer League team) and Jeff Mosley, deputy chief of Louisville Forward, a local government economic-development program. Purchase tickets
Waters also will participate in a panel discussion on the issue along with Amanda Duffy, president of the Louisville City Football Club (a United Soccer League team) and Jeff Mosley, deputy chief of Louisville Forward, a local government economic-development program. Purchase tickets
Find tickets here.
Kentucky Roll Call publisher and American hero Lowell Reese, who was exposed to Agent Orange decades ago while fighting communism as a battalion commander in the jungles of southeast Asia, made the ultimate sacrifice for his country when he boarded his final flight from earth last week.
Reese took the oath to defend this country and its Constitution “against all enemies, foreign and domestic” seriously.
There is no expiration date on that oath, which he understood isn’t just about defending America against some foreign enemy on some far-away battlefield.
Reese also served his commonwealth in the same spirit by firmly confronting domestic foes of his fellow Kentuckians – policies that threaten their future and politicians who profit at their expense, particularly as it relates to Kentucky’s public-pension crisis deemed by credible researchers as the nation’s worst.
He took particular aim at passage of House Bill 299 in 2005, which he labeled a “Pension Greed Act” because it allowed Frankfort’s politicians to calculate the size of their legislative retirement checks based on their full-time salaries in other government positions rather than their earnings as legislators.
“This practice allows part-time legislators to convert their normal pension to super-sized pensions,” Reese wrote in “Future Shock,” a series of Bluegrass Institute-published reports which offered analysis of and solutions to the state’s retirement-plan woes.
He chastised politicians from both parties for taking advantage of this policy and published estimates of their projected taxpayer-funded pension windfalls in order to show how many of those who voted for the Greed Act would personally benefit to the tune of hundreds of thousands – and even millions – of dollars.
It’s not coincidental that the first of his proposed solutions in that report was to make the commonwealth’s retirement plans transparent, allowing taxpayers – including retirees who depend on state-funded pensions for their livelihoods and economic security – access to the kind of information needed to hold Frankfort’s politicians accountable and achieve challenging reforms.
“His work has been a major catalyst toward at least the attempts at transparency we saw this year in Senate Bill 2,” Chris Tobe, author of “Kentucky Fried Pensions” and a former Kentucky Retirement Systems’ trustee, said.
SB 2 proposed shining the light on Kentucky pension plans’ contracts with hedge funds and private equity groups, requiring that all such agreements go through the bidding process.
“We have hundreds of secret no-bid contracts that the trustees, state Auditor and even legislative review committees cannot see,” Tobe said. “Only the KRS staff can see all of the information.”
Reese abhorred such secrecy, believing it to be a dangerous enemy to sound public policy and an insurmountable obstacle to solving a crisis that threatens the commonwealth’s economic security and vitality.
That’s why he was so deeply committed to making the legislative retirement system transparent. Senate Bill 45 – also introduced during this year’s General Assembly session – would have done.
Reese rightly believed that opening the curtains on politicians’ pensions was truly worth of – and eventually would receive – overwhelming bipartisan support and lead to making the entire system transparent.
Tobe notes that Reese also was one of the first to call attention to the fact that 30 percent of the 1,700 entities in the Kentucky Employees’ Retirement System aren’t even public agencies.
“Lowell was a very important voice in the pension debate,” he said.
Neither of the aforementioned transparency bills, which passed the Senate unanimously, received a vote on the House floor during this year’s legislative session. Yet for the first time they did get through the State Government Committee, despite the uninformed opposition of its chairman, Rep. Brent Yonts, D-Greenville.
The fact that the bills made it out of committee against House leaders’ entrenched hostility clearly indicates that though Reese’s voice may have been silenced by the enemy of death, it continues to ring strong throughout the commonwealth he loved and for which he fought.
A research team at Stanford University just released a huge report several days ago dealing with “Local education inequities across U.S.” The Stanford team collected testing data and other information on every school district in the nation. Then, using the National Assessment of Educational Progress as a common ruler, the Stanford team says they placed test results from 50 different state systems onto a common grading scale so that meaningful analysis between states and districts is now possible. This enormous database is available online, for free (registration is required) at the Stanford Education Data Archive.
It didn’t take long for people to jump into this new treasure trove of school performance data. One of the first groups is from the New York Times newspaper, where a team already assembled some really interesting comparison graphics in an article titled “Money, Race and Success: How Your School District Compares.”
I decided to see how the Times rated Kentucky’s largest school district’s performance.
The results aren’t pretty.
Along with his recently created “Selfie of the Week” contest, Gov. Matt Bevin’s Facebook page includes a video of the commonwealth’s 62nd governor going where most Kentuckians have never ventured – up to that little round enclosure at the Capitol’s pinnacle above the dome.
Bevin and his kids celebrated Spring Break by climbing myriad groups of stairs to get a bird’s eye view of Frankfort.
His video shows not only how small objects on the ground outside the Capitol seem but also offers a real perspective on how much smaller the floor of the rotunda under that dome appears from 200 feet high versus how it feels when you’re standing in that same spot surrounded by multitudes of self-serving politicians with an overinflated view of their own importance.
Perhaps the governor will consider climbing those steps again and inviting some of his fellow Kentucky politicians who’ve lost sight of why they were sent to Frankfort in the first place to tag along.
Rep. Hubert Collins, D-Wittensville, would be a good candidate for such a climb.
Collins, who’s occupied space in the General Assembly for more than a quarter-century, tried during this year’s legislative session to wreck a bill filed by fellow Democrat and state Sen. Perry Clark from Louisville detangling the commonwealth’s onerous regulations of natural hair braiding.
Bevin eventually signed the bill after it was passed by the legislature, but not before Collins did his best to replace the now-former obstacles of entry into what’s known as the “African style” hair-braiding industry with new, equally thick regulatory barricades that shut out entrepreneurs wanting to open businesses providing this service.
The level of irrationality imposed by both the former regulations and Collins’ replacement amendment reach even higher than those “walls.”
Kentucky law previously required natural hair braiders to spend 1,800 hours and thousands of dollars – anywhere from around $5,000 at the Paducah Beauty School to nearly $20,000 at the Empire Beauty School locations in Elizabethtown and Louisville – just to obtain the required license, even though the practice is totally natural and includes no dyes or chemicals.
“To add insult to injury, this training never even breaches into the braiding areas,” Clark said.
Yet after his fellow legislators voted to tear down these barriers, Collins proposed a floor amendment with several new requirements, including a $1,500 fee, which would trip up the dreams of immigrants – many from West Africa – who came to America legally and are willing to work their fingers to the bone while building a new life.
This nonsense of replacing one set of onerous regulations with another reminds me of British Prime Minister Winston Churchill’s quip: “I may be drunk, Miss, but in the morning, I will be sober and you will still be ugly.”
What’s really ugly – no matter the angle from which it’s viewed – is that Collins’ amendment would have sent the $1,500 fee straight to the Kentucky Board of Hairdressers and Cosmetologists, which is chaired by none other than the lawmaker’s wife, Bea Collins.
Amazingly, even Rep. Reginald Meeks – also a Louisville Democrat who normally floats around in the outer reaches of the political sphere’s leftist regions – labeled Collins’ amendment “anti-business.”
He could have added “corrupt,” as well.
If Hubert and Bea Collins would ascend those stairs and glance back down when they reach the top, they would see what state government as enshrined in the Kentucky Constitution was meant to be: a miniscule part of our lives that serves its constituents, protects their liberties, provides a level playing field and removes barriers that prevent citizens from freely climbing as high as their dreams, dedication, abilities, hard work and destinies take them.
When that truly happens in Frankfort, watch Kentucky rise higher and go where it’s never gone before.