Bluegrass Beacon – Obamacare: Public policy malpractice

BluegrassBeaconLogoReviews on cable news and social media of retired Kentucky Gov. Steve Beshear’s response on behalf of the Democratic Party to President Donald Trump’s first – and powerful – speech to a joint gathering of Congress aren’t great.

Speaking while seated in a diner with a small group of attendees who appear largely impassive in a let-us-know-when-we-can-get-back-to-the-pie-and-coffee sort of way, Beshear’s canned and casual approach made it seem more like he was headed to a backyard barbecue than offering a serious response to the commander-in-chief’s weighty address.

“Small and stunty,” panned liberal MSNBC commentator Rachel Maddow.

However, “to be fair to Beshear, going after that Trump speech is like taking the stage after a U2 set with nothing but a ukulele in your hands,” radio talk-show host Buck Sexton tweeted.

If life hands you a ukulele, at least find an effective composition to play.

Nothing is ever as effective as truth – especially in these days of fake news and alternative facts.

Alas, it seems all Beshear can locate is “Obamacare’s Concerto for Ukulele and Liberals in F (for Failure) Minor” as he remains stuck on maintaining that 22 million more Americans, including a half-million Kentuckians, “now have health care that didn’t have it before.”

At least 14.5 million of those Americans – including more than 400,000 Kentuckians – got their coverage through the misnamed Affordable Care Act’s expansion of Medicaid eligibility, which simply means that all previously uninsured citizens on Medicaid now have is a card in their pockets identifying them as government-program beneficiaries.

No assurance of actual care exists.

But that’s just one of the problems with off-key claims by Beshear and his fellow Obamacare supporters. Consider also:

  • Obamacare provides a costly barrier to needed care.

A Families USA study shows that premiums for high-deductible plans purchased through Obamacare’s exchanges are increasing by double-digit amounts and more annually – 116 percent in Arizona last year alone – resulting in one in four of those customers skipping doctor’s appointments and medical tests while struggling to pay the bigger invoices.

How does this add up to better care or lower costs?

  • Labor-force participation is dropping in states using Obamacare to expand Medicaid.

While Beshear spoke of unemployment-rate drops, fiscal experts are more concerned about Obamacare’s impact on discouraging people from even looking for work.

Georgetown University researcher-turned government analyst Tomás Wind reports that “expanding Medicaid is associated with a 1.5 to 3 percentage point drop in labor force participation” in states that chose to join in the expansion.

  • Obamacare perversely drives up costs then punishes individuals who work extra to pay for it.

People who’ve taken extra jobs to cover double-digit increases in premiums for policies obtained through Obamacare’s exchanges risk abruptly losing thousands of financial-aid dollars.

Tort reformer Ted Frank of the Manhattan Institute Center for Legal Policy used the Kaiser Foundation’s Health Insurance Marketplace Calculator to show how a 62-year-old earning $46,000 in a high-cost area suddenly loses the $7,836 tax credit that helps cover his premium if he earns just $22 more.

Hans Bader of the Competitive Enterprise Institute in noting Frank’s example writes that while it makes sense to “gradually phase out” subsidies for those whose incomes rise and who need less government help, Obamacare takes a “far more extreme and indefensible” approach.

“It suddenly takes away thousands of dollars in subsidies when many people earn a few extra dollars – blindsiding many of them in the process,” Bader writes. “… That leaves them much worse off than if they had never earned that extra income, potentially leaving them poorer for taking on a second job to pay the costs of their health insurance.”

It’s so severe that our 62-year-old will have more take-home pay if he earns $46,000 than if he reaches $55,000.

Frank’s conclusion: “This is just public policy malpractice.”

Jim Waters is president of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read his weekly Bluegrass Beacon column at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

Bluegrass Beacon: House GOP shows solidarity, challenges the status quo

BluegrassBeaconLogoEditor’s note: This column originally was released to newspapers before the state Senate had passed its budget. It’s been updated to reflect passage of the Senate’s budget.

How unfair it was for former Gov. Steve Beshear to claim he was leaving the commonwealth’s bank account in much-better shape than he was handed when, in reality, the incoming Gov. Matt Bevin administration found itself staring at a shortfall of hundreds of millions of dollars.

This scenario resulted in the new governor’s first budget proposal containing across-the-board spending cuts of 4.5 percent during the current fiscal year and 9 percent in the next budget.

Bevin’s budget pays the bills, adds an additional $1.1 billion in funding to the pension system and tucks away nearly $1 billion in savings to address future pension payments in a Kentucky Permanent Fund – $500 million of which is coming from surplus funding in the state’s public employee health insurance fund.

State retirees, despite being largely a Democratic party constituency in elections, have given an increasingly enthusiastic “thumbs up” to Republican Bevin’s plan.

But the House Democrats’ budget dramatically reduces Bevin’s proposed cuts and uses the $500 million in surplus health insurance funding to pour more money into the commonwealth’s Kentucky Teachers’ Retirement System rather than save it for the future or at least put it toward the Kentucky Employees Retirement System (KERS), which is in much-greater danger of going belly-up.

The difference is KERS can’t match the campaign-contributing ability of teachers’ unions.

Still, it’s not as if Bevin neglected the teachers’ fund, as evidenced by his proposal to pour an additional $660 million into the KTRS pension plan.

Even some of the governor’s supporters question the need to save when there are pressing funding needs.

But it’s like the family being able to pay for a repair if the car breaks down or someone has to make an unexpected trip to the emergency room without totally busting its budget.

The state has itself taken a few such “trips” recently, including a shockingly high bill from Kynect, Kentucky’s Obamacare-style health insurance exchange. The tab was more than $60 million for this duplicative and wasteful program despite the fact that Beshear claimed his administration would operate Kynect for less than $34 million.

There’s also the matter of finding revenues to cover Kentucky’s portion of the bill generated by Beshear’s unilateral expansion of Medicaid eligibility, resulting in a half-million Kentuckians being added to the taxpayer-funded health insurance program. Kentucky Medicaid now includes 400,000 enrollees with household incomes between 69 percent and 138 percent of the federal poverty level – many of whom could purchase private insurance if they weren’t being encouraged to move to the government dole.

Part of Obamacare’s promise was to cover a major portion of the expanded Medicaid costs now and into the foreseeable future. Still, even the best scenario requires Kentucky to pick up 10 percent of the expansion’s cost by 2020.

So the Democrats pass a budget that keeps most of the spending but refuses to tuck away badly needed savings, even though they have no clue what that cost will be.

What if it’s a lot higher and requires taking more General Fund money to pay those bills?

House Republicans showed inspiring solidarity by refusing to go along with this nonsense. Surely, this strengthened the resolve of the state Senate, which has since restored many of Bevin’s cuts and savings.

Not a single one of the House’s 47 Republicans voted for the Democrats’ irresponsible spending plan, which is dead on arrival at the Republican-controlled Senate.

The GOP’s unity is especially satisfying and significant as it’s directed at arch enemies of changing the direction of our commonwealth from poverty to prosperity: outdated political relics in charge of the House’s majority party who refuse to cut spending, save for the future or even represent their own constituencies.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon: Virus of secrecy infects KentuckyWired program

BluegrassBeaconLogoEditor’s note: Since this column was originally released on Sept. 17, the commonwealth finally – finally – posted the KentuckyWired contract. However, the points made here about this big-government boondoggle remain very timely and relevant.

If Gov. Steve Beshear’s administration wants taxpayers to trust it to build KentuckyWired – a $350 million, 3,000-mile high-speed Internet network – then bureaucrats in charge of the project should at least be technologically capable of scanning and posting a copy of the commonwealth’s contract with Macquarie Capital, its Australian partner.

Could it be the administration doesn’t want taxpayers to know the details because Macquarie has a poor track record when it comes to government-owned high-speed Internet projects in other states?

Instead of just releasing the documents, a Finance Cabinet official responded to a simple request to see the contract by claiming his office was having technical difficulties posting the documents online but claimed they would be available in another week or so.

It’s supposedly been months since a deal was reached, yet we still haven’t seen the contract.

With a project this big and with all Kentucky taxpayers on the hook, an open-records request should not even be required. The details should have been revealed even before it was signed.

Perhaps the claim about “technical difficulties” is just a smokescreen for politicians in Frankfort, including legislators – who slipped a $30 million KentuckyWired-expenditure into the 2014 budget and who would rather not have us privy to its details.

If KentuckyWired is as good as Beshear’s public-relations machine claims and even the gubernatorial candidates naively believe, wouldn’t they want taxpayers to know as much as possible – as soon as possible – about its greatness?

“Here in Kentucky, you’re about to be given a gift,” Brian Mefford, CEO of Connected Nation Exchange, piped up with all of the sunshiny-ness he could muster during a recent broadband conference. “And the only thing you had to do to get that gift is to be a taxpayer.”

He’s right: this project surely will be a gift that keeps on taking … from taxpayers.

There are other question marks about the project, including how Frankfort’s genius bureaucrats and politicians concluded they could build an entire statewide network for $350 million when it cost $500 million to construct a gigabit network in one city – Chattanooga, Tennessee.

Also, realizing that there usually are cost overruns even on projects that government knows how to build reasonably well – such as roads, bridges and schools – what’s the contingency plan for such excesses related to the KentuckyWired initiative?

What happens if the project runs out of money before completion? Will taxpayers be forced to ante up and make up the difference?

Considering that, conservatively, 85 percent of Kentuckians already have access to high-speed Internet service, where will KentuckyWired find its customer base?

Will state government quit doing business with private companies who currently serve city colleges and universities? What would such an approach do to the rates of private Internet providers?

What if the network can’t get enough subscribers to properly fund it?

Will all Kentuckians be forced to pay higher utility fees, like Macquarie Capital tried to tack on to utility bills of Utah residents – even those who already had their own service or simply didn’t want to subscribe to the 11-city government network?

Who will build this Internet highway? Originally, rural Kentucky contractors were promised that this would be a true public-private partnership – with them involved in constructing the fiber-optic lines for the network.

We now hear rumblings that a Canadian company is going to be brought in to build out the network instead of employing those who live, work and contract in – and know – rural Kentucky.

Making taxpayers wait to see the details until after Frankfort already committed to funding this deal is like forcing a home owner or car buyer to make the deal before finding out the terms of the loan.

It would be like saying “we’re giving you a gift,” only to find out later it was a genuine dud.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Quote of the day: Celebrating mediocrity

“Gov. Beshear’s administration does a great job of celebrating mediocrity. I think if you ask the average Kentuckian – in no way do they feel like we’re in the stages of a robust kind of comeback for our economy.” –Julia Crigler, Kentucky State Director, Americans for Prosperity

Bluegrass Beacon: Politically inconvenient facts about Ky’s economic comeback

BluegrassBeaconLogoGov. Steve Beshear’s recent victory lap touted an $82.5 million deposit of what he calls “surplus” funds into Kentucky’s “rainy day fund.”

Beshear claims it’s a “sign of a healthy economy” and attacks his critics who “keep running their mouths about how bad things are,” reports WHAS-TV’s Joe Arnold.

However, I’m concerned that Kentuckians who hear the governor’s glossy spin about a robust recovery will lack motivation to confront the serious challenges offered by a status quo that includes a dire public-pension crisis.

While the truth poses inconveniences to politicians frantically seeking legacies beyond having grown government and their constituents’ dependency on it, Kentuckians deserve to hear it anyhow.

So in the spirit of Beshear’s statement that – as Arnold reports – “his best defense are the facts,” let’s look at some:

  • Fact: The $82.5 million deposit in the savings account was possible because the state didn’t pay its bills.

“So yes, if we don’t pay our bills, we can put money in a ‘rainy day fund’ and pat ourselves on the back,” Western Kentucky University economist Brian Strow said on KET’s “Kentucky Tonight.”

“If we had paid for the pensions as we’re supposed to, it would have been more than eaten up,” Strow said in reference to the rainy day fund deposit.

While the legislature took some baby steps in 2013 to address the pension crisis, most of the benefits of those changes won’t manifest for decades. Meanwhile, the system’s unfunded liabilities continue to grow.

Unlike the vague Site Selection magazine award touted incessantly by Beshear showing Kentucky supposedly ranking first in a nebulous “most new projects per capita” category, we actually know something meaningful about how Mercatus Center researcher Eileen Norcross arrives at her rankings.

She ranks Kentucky No. 47 in “budget solvency,” No. 44 in “long-run solvency” and No. 46 in “trust fund solvency,” which compares state debt to personal income.

Arnold concludes his coverage of Beshear’s announcement with the governor claiming that Kentucky doesn’t need to look at economic-enhancing policies such as right-to-work and getting rid of punitive personal income taxes like better-performing states are doing because “we were number one; they weren’t,” again referring to that Site Selection award.

Nos. 47, 44 and 46 are a long way from the top, governor.

“Our wages reflect that,” Strow said. “When we don’t have a high level of education, we’re not going to command wages the other states get, and this is one of the reasons we’re in the bottom five in terms of household income.”

  • Fact: While government revenues and spending have increased steadily in Kentucky each year since 2010, BLS numbers reveal that private-sector weekly earnings are up less than 1 percent annually since Beshear took office before the Great Recession arrived.

In fact, much of the increased tax revenue touted by Beshear can be attributed to lower gas prices that give individuals more disposable income to spend on items most likely to be subject to a sales tax.

But is that really evidence of higher wages, better jobs and a booming turnaround, as the governor and his supporters contend?

Claiming a robust economy while personal incomes remain stagnant and government revenues, spending and programs become more bloated is like a Kentucky college basketball coach declaring a spectacular season has occurred even when his team lost more games than it won.

In such a case, I’m certain there would be no lack of motivation to confront the status quo.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

The numbers: Ky earnings ‘barely back’ to where they were when Beshear took office

In search of a legacy, Gov. Steve Beshear has resorted to taking “victory laps” in attempts to convince skeptical Kentuckians that the commonwealth’s economy is roaring back.

However, hard facts from the Bureau of Labor Statistics show employment and earnings in the commonwealth are “barely back” to where they were when Beshear took office in December 2007:

BLS earnings 1

 

 

 

 

 

 

Bluegrass Beacon: Rising ER visits form another ‘Obamacare’ infection

BluegrassBeaconLogoConsidering the Obama administration’s failure to keep its promise – made by the President in public speeches at least 36 times – that “if you like your plan, you can keep it,” there should be little surprise that other claims offered by Obamacare’s Kool-Aid drinkers to sell this big-government health-care program also are bogus.

For instance, President Obama and fellow supporters of the Affordable Care Act repeatedly asserted that the strain on hospitals would be relieved as there would be fewer expensive emergency room visits.

“What about those parents whose kids have a chronic illness like asthma and have to keep on going back to the emergency room because they don’t have a regular doctor, and the bills never stop coming?” Obama asked a crowd during a speech in Maryland.

Kentucky Gov. Steve Beshear, Obama’s political soulmate in Frankfort, made similar claims during his State of the Commonwealth speech to a joint General Assembly session in January.

Beshear claimed that the success of the commonwealth’s version of Obamacare – known as the Kentucky Health Benefit Exchange – “means that our friends and neighbors … can be treated in an appropriate setting – not in an emergency room, the most expensive place to get care.”

Yet, a new poll by the American College of Emergency Physicians indicates that emergency room visits are rising.

A whopping 75 percent of the 2,099 physicians nationwide reported that the number of ER patients has increased since Obamacare went into effect on Jan. 1, 2014 – with 28 percent claiming the number had “increased greatly.”

Ryan Stanton, an ER physician at Baptist Health Lexington, told The Wall Street Journal that ER visits had gone up 20 percent during the first few months of 2015 compared with 10 percent last year – when the law widely expanded coverage.

Adam Ogle, director of emergency services at Baptist Health Paducah, told the Paducah Sun that emergency visits to his facility were up by more than 6 percent in 2014 over 2013 and already have grown by 5 percent this year, compared to the same period last year.

Even as Obamacare was being shoved down Americans’ IV tubes, we had to hope that the previously uninsured who now had coverage would be able to seek conventional treatment, thus relieving the pressure on ERs, to which a visit by a patient needing primary – rather than emergency – care costs $580 more per visit, according to a Robert Wood Johnson Foundation report in 2013.

Dr. Stanton points to a huge increase in volume, which was bound to happen due to the fact that a whopping majority of the formerly uninsured who now are covered receive coverage through taxpayer-funded Medicaid rather than a private plan they pay for.

Considering a shortage of primary care physicians who would accept Medicaid patients already existed before Obamacare, where did the geniuses who created this health-care boondoggle think the newly covered would go when they needed care that couldn’t wait for months until a physician could see them at the office?

To the ER, of course, which won’t turn them away.

Obamacare supporters will try to pooh-pooh this survey, claiming it’s anecdotal.

Yet while it may not be absolutely conclusive, the survey offers a realistic view of what’s happening on the ground rather than the rosy rhetoric offered on the campaign trail.

Plus, plenty of rigorous data – again available even before Obamacare was implemented – showed that expanding Medicaid increases the strain on emergency rooms.

Since the Obama and Beshear administrations don’t have a solution for that problem, they choose to simply ignore it and act like Kentucky and the nation has cured its crisis of uninsured citizens.

They’re still failing to treat this condition.

But if you leave an infection untreated, won’t it only grow worse?

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Bluegrass Beacon: Kentucky is barely ‘back’

BluegrassBeaconLogoA little-known fact about Arnold Schwarzenegger’s famous “I’ll be back” line in his “Terminator” movie is that it just about didn’t happen because the famous Austrian-born actor-turned-governor-turned-actor-again had difficulty pronouncing “I’ll” properly.

Director James Cameron refused to grant Schwarzenegger’s request to change the phrase to the easier-to-pronounce “I will be back.” The American Film Institute marks the shorter “I’ll be back” as history’s 37th most memorable movie quotation.

Of course, the phrase probably would not have reached such notoriety had it also not had the credibility backed up by Schwarzenegger’s cyborg assassin character, who utters the now-famous line to the cop at the entrance-desk window of the police station where his target Sarah Conner is being housed. The credibility of his promise is greatly enhanced when he actually does return a few moments later – in the form of a car crashing through the doors right into that officer’s counter.

Gov. Steve Beshear in recent his State of the Commonwealth speech zealously declared: “Kentucky is back, and we’re back with a vengeance.”

His claim, however, lacks that needed credibility.

In key categories of employment, population and wage growth, the commonwealth is not “back with a vengeance.” It’s barely “back” to where it was when Beshear gave his first State of the Commonwealth address in January 2008:

  • According to the Bureau of Labor Statistics (BLS), total private-sector weekly earnings are up, on average, less than 1 percent annually since Beshear took office. That hardly offers an economic portrait entitled: “back with a vengeance.”
  • While the governor touted the drop in unemployment in his speech, he said nothing about the drop in employment, which should be of great concern. An analysis of data from the BLS and the U.S. Census Bureau reveals that only 8,000 net jobs have been added during Beshear’s stint in office. (BLS and U.S. Census Data).
  • The commonwealth’s manufacturing sector isn’t even “back” to where it was during Beshear’s first year in office. Instead, there was a net decline of 14,200 manufacturing employees between November 2008 and November 2014. At the same time, there was an increase of 16,900 government jobs during that same period (BLS).

“While the ship’s not sinking, “it’s not going anywhere fast, either; it’s limping into port,” said economist John Garen, Gatton Endowed Professor of Economics at the University of Kentucky’s Gatton College of Business and Economics and chairman of the Bluegrass Institute Board of Scholars. “While there are some growth areas in Kentucky, overall it doesn’t present the picture of a dynamic, robust, growing economy. We just barely made it back to where we were when the recession hit in 2008.”

“Back,” like “beauty,” may be somewhat in the beholder’s eye. What’s not up for grabs is the fact that wishing something was happening is not always an indication of reality.

No reasonable Kentuckian, for instance, wants to believe that our education system is not “back with a vengeance.” Thus, we heard Beshear’s enthusiastic claims that “student performance has improved tremendously” and “college and career readiness has skyrocketed.”

However, he used questionable Department of Education statistics to claim that the commonwealth’s college and career readiness rate jumped from 38 percent in 2011 to 62 percent in 2014.

The commonwealth’s own Office of Education Accountability (OEA) recently reported that problems with these statistics are so severe that they cannot be relied upon to evaluate programs or compare performance between school districts. In fact, the OEA warned the statistics were not even consistently reported between 2011 and 2014.

The only stable college-readiness statistics available for the period are from the ACT college entrance test, which shows only a minimal, 5 percent increase in readiness for college between 2011 and 2014. Among 2014 Kentucky grads scarcely more than one in three showed college readiness on the ACT.

“Back?” Barely.

“Back with a vengeance?” Hardly.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Media alert: Governor offers ‘alternate reality’ of Ky’s dire condition

Wage, employment and population stagnation present stark contrast to Beshear’s claims that the Bluegrass State is ‘back with a vengeance’ 

LegLogo(FRANKFORT, Ky) – In his final State of the Commonwealth speech tonight, Gov. Steve Beshear had the opportunity tonight to set Kentucky on a new course of prosperity and freedom.

Instead, he chose to largely ignore the biggest problems facing Kentucky while offering few new ideas to address the state’s ailing public-pension crisis, widening achievement gaps between black and white students and unfriendly business policies that put up “Do Not Call” signs at the commonwealth’s borders.

Demonstrating the alternate reality that has characterized his administration for eight years, Beshear told a joint session of the General Assembly that “Kentucky is back, and we’re back with a vengeance.”

Actually, in the key categories of employment, population and wage growth, the commonwealth is barely back – and only back to where it was when Beshear gave his first State of the Commonwealth address in January 2008. For instance:

  • Total private-sector weekly earnings are up, on average, less than 1 percent annually since Beshear took office. (Bureau of Labor Statistics)
  • While the governor touts the drop in unemployment, the drop in employment is most disconcerting. While there are about 61,000 more 25-64-year-olds in Kentucky than there were when Beshear took office, only 8,000 net jobs have been added during that period (BLS and U.S. Census Data).
  • The commonwealth’s manufacturing sector experienced a net decline of 14,200 employees between November 2008 and November 2014. Meanwhile, there was an increase of 16,900 government jobs during that same time period. (BLS)

Tonight, the governor touted Kentucky’s performance compared to other states and criticized those of us who have called for looking at examples of growing, robust economies in neighboring states.

Rather than Kentucky finding out what our neighboring states are doing to improve their economies and education systems, the governor said “Tennessee, Indiana and the rest of our neighbors are working hard to be more like Kentucky!”

“Would the governor really have Indiana rid itself of its robust school-choice program or Tennessee trash its right-to-work law so they be more like Kentucky, which has no parental choice and no right-to-work protections for its employees?” asked Bluegrass Institute president Jim Waters. “Claiming Kentucky has roared back and then denying the competitive disadvantage the state has put itself in offers a glimpse into the alternate reality and parallel universe this administration has chosen to operate in for eight years.”

“The fact is Kentucky’s per capita income in 2013 was lower than six of the seven surrounding states,” Waters continued. “Meanwhile it’s losing out on major job growth as companies like Caterpillar and Beretta gun manufacturers cross Kentucky off its list and head to Tennessee, Georgia and other right-to-work states.”

The fact is that Kentucky trails right-to-work states in almost every key category, including higher welfare rates than right-to-work states.

Meanwhile, the Bluegrass Institute commends the Kentucky Senate’s Economic Development, Tourism and Labor Committee for supporting a right-to-work policy for the commonwealth.

“We look forward to approval of the full Senate on a statewide right-to-work policy before the week is over,” Waters said.

He also commended local county leaders who have not allowed Frankfort’s inertia to keep them from passing their own right-to-work ordinances and giving their counties every opportunity to succeed in attracting manufacturers and the opportunities they offer their citizens.

“For too long, this governor and his administration have touted Frankfort as the answer to Kentucky’s greatest challenges,” Waters said. “We offer the governor’s own words to that approach: Kentucky is much more than political and legislative battles inside this complex. Rather, it’s ‘out there – in homes, on farms, in classrooms and along the Main Streets in our 120 counties.’”

For more information, contact Jim Waters at (270) 320-4376 or jwaters@freedomkentucky.com. 

Bluegrass Beacon…Right-to-work: The right message for Kentucky’s governor

BluegrassBeaconLogoThe 3,748 manufacturers that have stayed in Kentucky and employ 228,600 workers – despite a less-than-friendly business atmosphere – deserve all of the accolades Frankfort can muster, including Gov. Steve Beshear’s decree that October is “Manufacturing Month in the Commonwealth.”

Perhaps this could be followed by “Political Courage Month” in November, during which the governor digs his bully pulpit out of storage, dusts it off and places a reminder on it to “pound here in favor of right-to-work for Kentucky.”

He would have the support of manufacturers, who strongly endorse a right-to-work policy for Kentucky because they can see – and compare – what’s happening in states with and without them.

However, Beshear once said in an interview highlighted by Southern Business and Development magazine that those site selectors who claim that a lack of a right-to-work law is an obstacle to Kentucky’s economic growth have the wrong “perception.”

“There’s a perception issue among some companies that it is a problem,” Beshear said. “Our job is to break through that perception. We deal with site selectors every day and we are developing close relationships with those site selector companies, and as we do that it gives us the opportunity to really show them the facts about Kentucky.”

Based on his tepid concern about right-to-work, which attracts manufacturers because it allows individual workers to make their own choices regarding labor-union membership, certain “facts” likely are missing from Beshear’s talking points.

It’s a pretty good bet that data by the Bureau of Economic Analysis showing that growth in real manufacturing GDP in the decade ending in 2010 was more than 17 percent in right-to-work states, 9 percent in states without a right-to-work law and even worse – a paltry 4 percent – in Kentucky isn’t included in the governor’s presentation.

The “facts” are that neighboring states to the South with right-to-work laws like Tennessee, with its 5,790 manufacturers, attract companies like Hankook Tire – one of the world’s fastest-growing tire makers – which broke ground this month on an $800 million facility that will employ 1,800 people in Clarksville.

The “facts” are that site selectors like James Medbery of the Binswanger Company says that many  companies cross Kentucky off their list “without giving it another thought” because we lack a right-to-work law.

This past spring, I ran into Louisville mayor Greg Fischer in a small café in his city’s West End where he told me that the right-to-work issue is nothing but “political noise.”

Companies “don’t even bring right-to-work up” when considering the River City for expansion or relocation, Fischer said.

Why should companies fight it when they can cross the Ohio River to a business-friendly state with more than twice as many manufacturers?

Indiana also has the River Ridge Commerce Center, which became home to the new Amazon Fulfillment Center just 44 days after Indiana became a right-to-work state. The Amazon facility employs 5,500 employees – including 3,000 seasonal workers – in a 1 million square-foot facility on 70 acres less than 15 minutes from Fischer’s office.

Since then-Gov. Mitch Daniels signed Indiana’s right-to-work law on Feb. 1, 2012, there have been several closings on deals at the River Ridge property leading to the employment of 8,505 workers with such high-profile companies like The Standard Register Co. and Fuji Seal Inc.

Louisville Business First reporter Marty Finley toured River Ridge and reported that Paul Wheatley, its director of marketing and finance, believes the center “could employ 20,000 people in the future,” and that development will “explode” once new bridges being built connect Indiana, a right-to-work state, with its non-right-to-work neighbor to the South.

If that happens, it means that a single development in southern Indiana just across the river from Kentucky’s largest city will employ the equivalent of nearly 10 percent of the Bluegrass State’s entire manufacturing workforce.

Watch out for heavy traffic if you happen to head northbound on those bridges.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.