Our K-PREP Data Sourcebook is now updated to include district level white minus black math proficiency rate gaps for all school levels, elementary, middle and high schools.
As discussed yesterday, given a second term for those at the Environmental Protection Agency who feel perfectly justified in picking winners and losers in America’s energy markets, states like Kentucky are scrambling to find powerful tools to protect their energy sectors.
At the American Legislative Exchange Council’s task force on energy and the environment, the Bluegrass Institute succeeded in passing this new and powerful tool to battle the overzealous regulators at the Environmental Protection Agency, and any others who would attempt to stifle Kentucky’s energy sector by trampling on the rights provided to the states in the U.S. Constitution.
The Intrastate Coal and Use Act is a piece of model legislation which declares in no uncertain terms that any coal mined, sold and used exclusively within the borders of a state are to be regulated exclusively by the state itself – not mid-Atlantic bureaucrats who too often have neither the will nor local knowledge to effectively weigh the benefits and costs of a natural resource as valuable as coal. This is exactly what the American founders had in mind before the “interstate commerce clause” was used and abused by modern-day regulators.
Since one-third of all Kentucky coal remains within the borders of the Commonwealth, such a bill will prove extremely useful in protecting state sovereignty over Kentucky’s energy sector. The “black rock” provides Kentucky with 93% of its electricity needs and some of the cheapest energy rates in the nation.
This piece of legislation – sponsored by the Bluegrass Institute – finally provides Kentuckians with a bazooka in the battle for constrained and reasonable government. But it need not be the only weapon. We’ll continue to explore more options in future blogs.
By Eric Schansberg, Ph.D.
With an ominous “fiscal cliff” looming on the horizon, the stakes in Kentucky and across the country can’t get much higher.
It doesn’t take a Ph.D. in economics to realize that the combination of cuts in the planned growth of federal spending and the large increases in federal taxes scheduled to take place on January 1 is going to cause problems for America’s limping labor markets and stunted macroeconomy.
The underlying issues are our massive federal budget deficits and rapidly growing debt, but the potential solutions are also problematic. Actual reductions in government spending – however unlikely – and big increases in tax rates will make economic growth even more difficult.
What’s worse, all of this contributes to what economists call “regime uncertainty.” Nobody knows what solutions – or temporary Band-Aids – Congress and President Obama will embrace.
Regime uncertainty also exists closer to home as entrepreneurs struggle to decipher just how Kentucky’s elected officials will address our $34 billion pension crisis.
If investors perceive the size and uncertainty of our debt to be unmanageable, they will either refuse to loan money to government or require a higher rate-of-return to offset the higher risks of making their capital available. This means higher debt payments, more trouble for our economy and tighter austerity measures in the future.
Actually, any investment becomes more difficult when risk and uncertainty increase. Consumers are less likely to buy cars and homes. Businesses are less likely to hire workers and expand their scale of operations.
Which one of these reduces economic growth? All of the above.
But there are further cliffs visible on the horizon, especially within healthcare. In 2014, we can look forward to sliding down the cliffs of the economic Matterhorn that is Obamacare.
Government already provides a massive indirect subsidy of more than $100 billion to purchase insurance through your workplace since it’s a non-taxed form of compensation.
Soon, Obamacare will provide direct subsidies to the working poor and middle income class for healthcare – regardless of most lifestyle choices or pre-existing conditions, driving up healthcare costs.
The good news for these employees is that they have access to a larger subsidy; the bad news is that this cliff creates a strong incentive for employers to offload those employees onto Obamacare.
Plus, since Obamacare imposes larger costs on firms with more than 100 employees, smaller businesses will try to avoid growing over that threshold while larger firms will look for opportunities to spin their activity into smaller, less-regulated entities.
Business growth will inevitably slow, especially in Kentucky, which has already accepted $67 million – more than any other state but New York – to establish Obamacare exchanges.
We can also locate looming cliffs for Kentuckians approaching income levels where benefits are dramatically reduced by earning one dollar “too much.”
For instance, at 400 percent of the poverty level – about $90,000 in income – subsidies are suddenly reduced from about $5,000 to zero. At 133 percent of the poverty line, earning an extra dollar results in contributing 3 percent rather than 2 percent of your income to insurance premiums.
Since the general public often doesn’t pay much attention to political economy, politicians have a strong incentive to ignore the subtle, but substantial, costs of expanding our debt and pushing it further into the future.
If politicians continue to push the country and commonwealth ever closer to that impending fiscal cliff by neglecting to make the tough decisions related to our debt, perhaps we should make the decision to send them over an electoral cliff at the next possible opportunity.
Eric Schansberg, Ph.D., has served as professor of economics at Indiana University Southeast in New Albany, Indiana since 1992, and is a member of the Bluegrass Institute Board of Scholars. Reach him at DSchansb@ius.edu.
The goings-on in Breathitt County’s school system sound like something out of a horribly unbelievable soap opera. Except, this story is no fabrication.
Charges were also filed in a separate action in 2011 against the superintendent and others for failing to report a sexual misconduct incident between a teacher and a student in the system.
In yet another separate action, a recent audit of the district’s finances raised a host of issues regarding fiscal impropriety. Among other things, the district cut 10 days from the school year and improperly paid staff for those days. Following an audit by the Kentucky Auditor of Public Accounts, the state withdrew its share of funding, $191,000, for those 10 days. The superintendent improperly paid teachers over a half a million dollars for those days when school was not held.
Problems with leadership in this district stretch back farther, to at least 2010. That’s when the Courier-Journal reported in “Indicted Breathitt school official removed by state” (subscription) that a member of the Breathitt County Board of Education was removed from his position by the Kentucky Board of Education for charges including forgery, unauthorized use of a state motor vehicle, and official misconduct.
Like I said, it’s like a soap opera.
Now – finally – it looks like the chickens are coming home to roost. In its December meeting, the Kentucky Board of Education is scheduled to vote to take over this seriously struggling school district.
A management audit (to access, click here, then scroll to item XXIX and then click on the link “Breathitt County Report Final”) recently completed by the Kentucky Department of Education certainly paints a very sad picture of a school system without leadership.
If the state takes over Breathitt County, it will be the first state takeover since the mid-1990s. To be honest, the results for students back then when the state took charge of Floyd County were nothing to write home about, so it will be interesting to see if the Kentucky’s educators learned from that experience.
Still, given the outright corruption that has infected this school system’s leadership, almost any change has to be an improvement for the students.
It’s too bad we don’t allow charter school districts in Kentucky. That might be a superb option to turn around this education mess.
Kentuckians understand that coal keeps the light on in the commonwealth , satisfying 93% of our electricity needs.
Many of us have even heard about the way coal is powering the industrial growth and westernization of China and India’s economies. This year, India generated 55% of its electricity from coal while the increasing demand for cheap energy in China resulted in a traffic jam 75 miles long while trucks were transporting in the natural resource from out of country.
But did you know that even “environmentally correct” Europe is turning to coal for its energy needs? According to the New York Times, one reason for this is that as the process of hydraulic fracturing causes the price of natural gas to fall in the states, American coal miners are instead exporting their product to a friendlier market in Europe – a continent hungry for energy sources cheaper than those of unreliable wind or solar.
All this is good news for Kentucky, the state which produces the third most coal in the nation.
Still, a second term for those “serving” in the Environmental Protection Agency is liable to snuff out the economic boom European demand for our most valuable natural resource could bring to the Bluegrass State.
The states require more serious weapons to battle the juggernaut that is the EPA and their war on energy sovereignty. Over the next few days, we’ll bring you some ideas for where those weapons just might come from. Stay tuned.
Kentucky’s Auditor of Public Accounts, Adam Edelen, discussed the various groups and stakeholders that supported his office’s recent special taxing district transparency and accountability project.
The Bluegrass Institute supported the project and is mentioned in the press conference.