WFPL reports the Louisville Tea Party is pushing charter schools, a saner busing policy and more fiscal accountability in the school system – all items the Bluegrass Institute has supported for some time. The word about the need is getting out!
A recent Institute for Justice study concludes the Bluegrass State has the fifteenth most burdensome licensing laws in America.
Do Kentuckians really believe that – as IJ reports – it should take 420 days of education and experience to become a government-approved cosmetologist, 620 days to become a licensed barber, or a whopping 1,825 days before being allowed to teach preschool?
Of course not. So why do regulators put myriad barriers in the way of finding work in Kentucky?
Perhaps looking into a couple of specific industries could provide some clues.
As of February, food truck vendors in Lexington, for example, must go through four separate city bureaucracies before being permitted to serve up foot-longs.
Does anyone else find it distasteful that hardworking Kentuckians trying to earn a few bucks grilling hot dogs for the folks must first obtain permission from both a city’s building inspection and planning divisions?
Even after hoops are jumped and trucks are parked, the vending permits last only 14 days, and are good only for a single location. Once the 14 days expire, food trucks must change locations and go through the ridiculous permitting process all over again.
And whereas brick-and-mortar restaurants are allowed to use public sidewalks for outside seating, food truck vendors are limited to doing business on private property.
Add to these onerous rules the fact that food trucks aren’t even allowed to operate near standing restaurants and you have a pretty good hint for why such regulations exist: established businesses have the ear of regulators, and aren’t keen on new competitors.
Such cozy business-government relationships aren’t confined to where the hot dog guy can park his stand.
Try starting a moving company in Kentucky and you will discover that you must first gain a Certificate of Necessity (CON) to operate legally.
This appalling law requires that – and I’m not even kidding – entrepreneurs get the permission of existing movers before they can get paid to relocate Aunt Susie from Lexington to Louisville.
Being required to seek permission from would-be competitors before opening shop is so contemptible that R. J. Bruner, founder of Wildcat Moving Company who has a master’s degree in business from the University of Kentucky, said he did not know about the requirement and would never have thought it possible for such a law even to exist.
Bruner said his company – which has not yet obtained a CON – was hit with $2,000 fines on at least four different occasions when the firm’s moving trucks were stopped by state law enforcement officers.
“It’s been a nightmare,” Bruner said. “The law doesn’t make any sense – it’s unconstitutional and corrupt.”
It also doesn’t make sense why Senate Bill 132, which exempts moving companies from CON requirements, languished in the House after passing the Senate during this year’s legislative session.
How can an entrepreneur like Bruner, who employs 30 Kentuckians and earns awards as one of the best moving companies in Kentucky, be neglected by so many of the same politicians who claim the commonwealth’s greatest need is “jobs?”
Fortunately, Bruner is not without help.
The Pacific Legal Foundation is representing him in a federal lawsuit against state officials for denying his right to earn a living, which is protected by the Constitution’s Fourteenth Amendment.
If Bruner is forced to get a CON to keep the doors of his company open, then all entrepreneurs in the commonwealth will have seen yet a bit more of their liberty slip away.
Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at firstname.lastname@example.org. Read previously published columns at www.freedomkentucky.org/bluegrassbeacon.
The Courier-Journal reports that a letter from Kentucky Commissioner of Education Terry Holliday to the Jefferson County Public School System (JCPS) directly identifies confusion over union contract issues as a roadblock to making badly needed changes in the school district’s Persistently Low-Achieving Schools (PLAs).
Holliday says that “perception issues” on the part of teachers in some of the schools have led to those teachers trying to hide behind the union’s contract as a way to avoid making changes.
Holliday points out that the provisions of Kentucky law regarding PLAs do not allow union contracts to interfere, but that message has not reached teachers who refused to go along with such things as allowing members of a state assistance team to monitor classes so they could provide teachers with assistance on how to improve their classroom delivery.
Holliday’s letter to the JCPS outlines other past deficiencies in PLAs management. Some key ones include “lack of clarity in the district’s vision for its persistently low-achieving schools.”
The Courier continues: “In addition, Holliday said the district has not provided turnaround training for its principals and assistant principals at its persistently low-achieving schools.”
Those sorts of activities are essential to any decent turnaround.
Hopefully, with signs that the JCPS superintendent is becoming more receptive to Holliday’s comments, things may finally get a bit better in these schools.
Still the process is terribly slow, and kids in schools now can’t wait while efforts that should have started two years ago still remain only discussions, not actions.
This brings home the sad reality that if Kentucky had charter schools, which have a proven track record of moving MUCH faster than traditional public schools when reforms are needed, those current students could already be getting benefits that somehow still remain out of reach.
A new report attempts to rank states based on personal and economic freedom.
These state comparisons are really a tenuous task, as there are many demographic and legislative factors that often researchers in some far-away place are not familiar with. One thing’s for sure — if Kentuckians were not so adamant on their personal freedoms like gun rights, we would not rank anywhere as near as high as this report indicates — No. 27.
Some of the commonwealth’s tax rates — including its property tax rates — are lower than some surrounding states.
This report, however, also contains some outdated statements. For example, it states that “telecom has been deregulated.”
But anyone who has even cursorily followed the 2013 session of the Kentucky General Assembly knows that that the last time telecom deregulation was passed was before the iPhone had even hit the marketplace. If deregulation passed in 2006 counts toward economic freedom in the Kentucky version of this report, what other outdated material in other states might there be?
A much-better indicator of where our state stands in terms of its economic freedom can be found in the institute’s release yesterday of an op-ed by Brian Strow, Ph.D., a member of the Bluegrass Institute Board of Scholars, who noted that Kentucky “now has the second lowest bond rating in the country — ahead only of delinquent and incompetent Illinois.”
Few things threaten the economic security of our commonwealth like the gi-normous $34 billion unfunded pension liability.
Despite what some academic-type sitting in his ivory tower says, this state does not have a more sound fiscal policy than 30 other states in this union.
By Brian Strow, Ph.D.
“What has been will be again, what has been done will done again; there is nothing new under the sun.” –Ecclesiastes 1:9
Kentucky’s unfunded pension liability was increasing rapidly. Reform was needed. In 2008, Kentucky “reformed” its pension system.
The reform said that by 2025, Kentucky should begin fully funding that year’s newly created pension liability. State legislators considered the problem solved. Their reform was to keep digging the pension hole for another 17 years.
Keep digging they did.
Kentucky dug so quickly that it now has the second-lowest bond rating in the country — ahead only of delinquent and incompetent Illinois.
Unfunded liability piled up to over $34 billion. By 2012, Kentucky’s pensions were less than 50 percent funded. Bond rating agencies made it painfully clear: Kentucky should address its pension problem.
On March 26, the state of Kentucky passed a new pension reform bill
Kentucky needs to increase funding to its state pensions by $500 million per year just to stop adding more unfunded liability to the pension system. The new reform adds just $100 million of new revenue (partly accomplished by a $36 million reduction in money going to the state’s roads).
One hundred million dollars does not equal the $500 million needed to stop digging a deeper hole much less increase the solvency of state pensions.
Never mind that the state needs to increase its funding of its retiree health plan by $600 million a year to stop increasing unfunded liability in that system.
To wit, the state needs an extra $1.1 billion per year to stop increasing unfunded health and pension liability in the state, and their solution was to raise $100 million a year in new revenue?
So lawmakers solved less than 10 percent of the problem and this is the greatest piece of legislation the legislature has passed in years?
On the bright side, the reform said that Kentucky should stop digging unfunded liability in its state employee pension system in 2015. That is better than 2025, but still it means Kentucky will continue to dig its pension hole deeper for now.
The pension reform did not even mention or change the Kentucky Teachers Retirement System. KTRS has over $11 billion of unfunded liability. Only California, Illinois, Ohio, Texas, Pennsylvania, Michigan, New Jersey, and Colorado have more unfunded teacher pension liability and they are all much bigger states.
Kentucky’s pension plan for teachers is less than 57 percent funded. It is one of, if not the, least solvent teacher-pension plans in the country in terms of unfunded liability, and it didn’t even warrant a mention in the pension reform bill.
New state workers in Kentucky are moved to a hybrid retirement plan.
Rather than have a defined benefit plan, they are guaranteed a 4 percent rate of return on their defined pension contribution. Where does one guarantee a 4 percent return on investments these days? Not in US government bonds.
Where will Kentucky get the revenue it needs to meet its pension liability in 2015 and beyond?
Expect another large tax increase or big cuts to education spending on the horizon. Since 2008 Kentucky has cut spending on higher education by 26 percent cut in real dollars. That is just a start.
Is the pension crisis in Kentucky solved? Hardly. Do state politicians consider it solved? Absolutely. That’s what they also thought in 2008.
There is nothing new under the sun.
Brian Strow, Ph.D., is BB&T Professor for the Study of Capitalism at Western Kentucky University. He is also a member of the Bluegrass Institute Board of Scholars. Reach him at email@example.com.
The hot topic of the evening was the federal government’s role in leading the nation out of the economic slump of recent years. Are deficits conducive to this end? Should the necessary funds be raised through taxation, borrowing, or the printing press? And just how much government intervention into the depressed economy is too much?
These are passionately debated topics, and last night we were treated to some passionate responses.
Whereas Jason Bailey, director of the Kentucky Center for Economic Policy, praised the feds in their efforts to borrow and spend during this time of weak economic demand for the sake of stimulating growth, Strow saw the efforts altogether differently – and on the most fundamental of levels:
“I think it’s false to say that the only way an economy can grow is by government spending money it doesn’t have. I fundamentally disagree with that. I think it actually goes the opposite.
We’ve found country after country, cross country studies, that the more they pile up debt and the higher their debt to GDP ratio gets, the slower their economies grow into the future. So it’s not some magic pill to spend money you don’t have that creates jobs and just creates wealth. I mean, if that were the case, Greece would be the wealthiest place in the word. They would not be in a crisis. There would be no European debt crisis. Italy would be smashing. Spain wouldn’t have 25% unemployment.
Borrowing and spending is not a path to prosperity for the individual family. I can’t do it for my family, and the federal government can’t either.”
Government borrowing and spending wasn’t the only topic Strow took a crystal clear position on. While Bailey discussed the importance of government providing social services like education, infrastructure, care for the poor … and care for the old … and care for the young … and a litany of other services, Strow was quick to remind viewers of a little thing called priorities. If you want to spend a dollar on one thing, you won’t be able to spend it on something else:
“But this goes back to the priorities. Congress and the president have to set priorities. If [the Head Start youth education program] is their priority, guess what, with a trillion dollar budget deficit, I got a trillion other places we can take money. If that is really what you want to do, if you really want infrastructure, really want education, there is money there. But you have to be willing to cut the things that are less on your priority list. And until you’re willing to do that, you can’t fund your priorities.”
But as political gamesmanship would have it, not many of our elected officials in Washington are willing to tip their hand and show their true priorities or make the tough choices necessary to create a sustainable budget. Fortunately for Kentuckians, a Senator from the Bluegrass State does not fit that stereotype.
Professor Schansberg explains:
“And I think that’s the great thing about Rand Paul and some of these others. Whether you would agree with him, we need people who are going to get up there and say something courageous, say something outside the box, get people to make commitments in a budget format instead of just playing games…
Even if you don’t agree with him, I welcome a loud, strong voice saying ‘Let’s make some decisions. Let’s put some real things on the table and debate them.’”
All in all, it was another great night on Kentucky Tonight for the Bluegrass Institute Board of Scholars.