Bluegrass Beacon: Actuarial integrity key to repairing pension bridge

20111129beacon2Editor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

Any retiree who worked as an engineer in building and repairing Kentucky’s buildings, highways and bridges should concur with a hearty “Amen!” for structural integrity, which indicates the ability of a structure to withstand a certain amount of intended weight without failing, fracturing or otherwise weakening.

If Kentucky is to fix its pension mess, then “actuarial integrity” must become to its defined-benefit system what structural integrity is to its physical infrastructure.

The new Abraham Lincoln Bridge connecting Louisville with Jeffersonville, Indiana, has a $1.1 billion price tag, a weight-bearing capacity of nearly 5,000 pounds per linear foot and is designed to serve that load for at least the next 75 years.

It was built only after determining the structure’s cost and reaching an agreement between the two states that its beneficiaries cover a substantial portion of the needed funding via tolls.

When the Kentucky Employees’ Retirement System was established in 1956, it was created as a linear system whereby actuaries determine each year’s benefit levels based on several factors, including anticipated investment returns, salary and payroll-growth rates, life expectancy, retirement age and attrition.

When beneficiaries reached retirement, their pension payments would come from a fully funded, actuarially sound system.

However, by allowing the load placed on Kentucky’s retirement bridge to increase by raising benefits established and funded in previous years, actuaries – pension-systems’ engineers, if you will – have compromised the integrity of our entire retirement system.

If engineers want to increase the weight-bearing capacity on the Lincoln Bridge to, say, 10,000 pounds per linear foot, they would complete construction of more lanes or cable before accepting the increased weight.

Allowing the increased weight without expanding capacity would make the bridge structurally deficient and dangerous to all who dare cross it.

Similarly, retirees and current beneficiaries in the commonwealth’s pension plans increasingly rely on a structurally deficient system to provide for them the rest of their lives.

A main contributing factor to this structure’s weakness is the poor performance of actuaries who work for Kentucky’s retirement systems and have given their wink-and-nod blessing to increasing the weight on our pension bridge without a corresponding expansion of its capacity critical for handling the heavier load.

Legislators too often have enabled this to happen without the proper understanding, oversight and questioning critical to protecting their constituents who pay for such shenanigans.

Actuaries know that ensuring the long-term sustainability of the systems requires strict adherence to the original benefits that were fully funded with normal cost payroll contributions.

Enriching these benefits after the fact may represent the worst assumption of all: future employers will have unlimited funding to pay the principal and interest required to fund unaffordable and retroactive benefit enrichments.

But who wants to bear such bad news to the folks who sign your checks, even if not doing so ends up being a large contributing factor to an entire state’s growing pension crisis?

The impact of an outside audit by the PFM Group on addressing the pension plans’ structural weakness likely will be as limited as the scope of its review.

By evaluating the systems only back to 2004, PFM’s audit simply cannot include the impact that increasing benefits and then applying those benefits retroactively in each of Kentucky’s retirement plans for years has exerted on weakening the integrity of our pension systems.

We’re still waiting on PFM’s final recommendations.

Perhaps the firm’s auditors will offer meaningful help in returning our retirement system to one based on actuarial integrity rather than debt, unfunded liabilities and unreasonable expectations by beneficiaries.

To do any less would be the equivalent of giving their own wink-and-nod – consciously or not – to weakening Kentucky’s pension bridge, in which case taxpayers should demand a full refund.  

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

Bluegrass Institute pushes pension reform @ Georgetown

Waters TalkingBluegrass Institute president and CEO Jim Waters presents “Sound Solutions for Kentucky’s Public Pension Crisis” for the Georgetown Rotary Club on Tuesday at the Scott Country Public Library in Georgetown.

You can view the Bluegrass Institute Pension Reform Team’s PowerPoint presentation here. This PowerPoint is not a full report, which is in the works, but the outline of the Institute’s position and ideas regarding pension reform.

Read more about the Bluegrass Institute’s work on pension reform here and here.

Also, President Waters will be speaking on pension reform at Noon on Sept. 20 at the Harrodsburg Christian Church.

 

Bluegrass Beacon: The due process of defining pension benefits

20111129beacon2Editor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

“Can pension benefits be cut?”

My answer to the reporter’s question may sound political but when it comes to Kentucky’s responsibility to its public servants, it’s nevertheless true: “It depends.”

The commonwealth’s moral obligation to protect properly earned and funded pension benefits doesn’t extend to improperly awarded ones.

Just because some group of politicians in the past improperly awarded new benefits or enhanced existing ones doesn’t mean future generations of Kentuckians should be forced to pay the bill for time and eternity for such gravy trains.

Unfortunately, beneficiaries, retirees and even legislators have been misled to believe that any benefit ever granted at any time or level and for any reason – regardless of actual rules or the commonwealth’s ability to pay the bill – is inviolable.

“We will not accept cuts to benefits promised under an inviolable contract,” wrote retiree activist Jim Carroll in a letter appearing in several newspapers. “If a bill is considered that reduces promised benefits, we will storm the Capitol with torches and pitchforks. If it is signed into law, we will litigate.”

That’s a wonderfully emotional statement designed to fire up a base of misinformed beneficiaries and retirees.

Here’s the rub: what benefits are promised “under an inviolable contract?”

Carroll rightly notes that previously awarded cost-of-living adjustments (COLA) not only no longer exist for Kentucky Retirement Systems’ participants but also that such benefits were “a contributor to our unfunded liabilities.”

COLAs still exist for Teachers’ Retirement Systems’ (TRS) beneficiaries, and thus – take Carroll’s word for it, not just mine – remain “a contributor to our unfunded liabilities.”

Plus, they are only one of many benefit enhancements that have helped dig Kentucky’s deep, dark pension hole.

The biggest shovel of all in digging that hole in each of the state’s retirement plans have been decisions, primarily by past legislators, to increase benefits in a particular year and then apply those gifts to all previous years of beneficiaries’ service.  

The very nature of a defined benefit pension system is that the level of benefits fluctuates each year according to actuarial assumptions considered each year, including investment returns, longevity, growth rate of salaries and payrolls, retirement age and attrition rates.

When, for example, investment returns are estimated to be higher, it may be possible to properly fund a higher benefit factor for that year because it is actuarially sound and properly funded.

But for beneficiaries to be led to believe that the commonwealth has a moral obligation to keep the rate at that level and to never lower it for years when returns are down is the worst kind of fake, even fraudulent, news.

Retirement benefits are to be determined annually by the systems’ actuaries based on solid, credible data on what the commonwealth can actually afford.

They form an agreement between the state, employees and taxpayers that’s smashed and broken when policymakers in future years reach back to increase the benefits from previous years.

Doing so is the equivalent of believing that while your personal investment in a money-market account offered a 3-percent return one year, 5 percent during another and 8 percent this year that you’re entitled to an 8-percent return ad infinitum for all years – both past and present.  

While the state has a moral obligation regarding benefits properly established, no such obligation exists for arbitrary benefits or those awarded either retroactively or prospectively without the due process of the actuarial process.

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

Bluegrass Beacon: Coal-hating chickens coming home to roost

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

How is it that residents in one of America’s most energy-abundant areas now face the real possibility that proposed hikes in their electric bills will result in a hard choice between staying warm next winter and making the weekly trek to the grocery store?

Rep. Chris Harris, D-Forest Hills, blames greed.

Harris is seeking legislative means to stop Kentucky Power, a subsidiary of American Electric Power (AEP), from getting approval from the Public Service Commission to raise rates by a whopping 16 percent – or more than $20 monthly on average residential customers – in his coal-country district next year.

Additionally, he’s sponsoring the first two pre-filed bills of the 2018 General Assembly which include a request that the PSC reconsider $100 million worth of previous rate-increase approvals for Kentucky Power.

Harris is outraged that the company is asking for such a huge rate hike when it’s (a) already had large increases approved in recent years, and (b) its parent company’s profits are soaring.

Both points are undeniably true.

  • The PSC has approved three increases totaling $104 million in rate increases plus $68 million in additional funding for costs related to projects like closing the Big Sandy power plant in Louisa, for which Kentucky Power customers are getting charged $16 million annually for 25 years to cover. The company’s newest request would add nearly $70 million in rate increases and additional charges to customers’ bills.
  • AEP’s stock prices have doubled during the past five years with dividends increasing for its stockholders each year.

Kentucky Power, in a release accompanying its latest rate-increase request, blamed a 14.2-percent decrease in electricity usage among its customer base just since September 2014 due to losing 2,000 residential and 450 industrial and commercial customers.

The company says it must charge more to cover the cost of continuing to provide electricity to the region.

“You can’t just shut down a third of a generation power plant” because there are fewer customers, Allison Barker, the company’s corporate communications manager, said in a phone conversation. “You either run the whole plant or you run none of it.”

Harris is right in that Kentucky Power, which, while privately owned, also has a monopoly on the electric business in a full slice of Eastern Kentucky – including some of America’s poorest counties – must justify all rate-hike requests.

But Barker says that while AEP has been profitable, each of the power company’s state-based divisions must pay their own way.

“We don’t get money from American Electric Power,” she said. “We pay for our own generation, distribution and transmission, and the way we recover costs is from Kentucky Power customers.”

While AEP has operating companies in other states, “you wouldn’t ask a Kentucky Power customer to pay for a project in Oklahoma; neither do Oklahoma customers want to pay for a project in Kentucky,” Barker explained.  

Harris should be equally outraged that what’s happening in Eastern Kentucky – and likely to occur in many other places across not only the Commonwealth but the nation – is directly connected to concerted efforts by the Environmental Protection Agency to target coal-fired power plants without regard to the devastating consequences for his constituents.

Bad-policy chickens whether in Harris’ district or districts nationwide don’t look good roosting in the form of higher electric bills, job losses or questionable supply of cool air for hot summers or heat for rough winters.

Only the economically naïve could believe that the shutdown of one victim of the EPA’s anti-coal campaign – a large unit at the Big Sandy Plant in Louisa, which consumed around 2 million tons of coal most years and employed 500 workers annually but was slated for shutdown by Kentucky Power in 2012 – wouldn’t yield future negative consequences.  

While Kentucky Power’s rate request must be vigorously debated, it should be done so against a backdrop of understanding that bad policies always produce appalling consequences.

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

Bluegrass Beacon: Objection! Beshear MIA in open-records dispute

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

Kentucky’s lawsuit against the manufacturer of OxyContin, heroin’s chemical cousin, stretches back more than a decade and involves three attorneys general.

It began in 2007 during Greg Stumbo’s stint as the commonwealth’s top lawyer, who, when he wasn’t busy indicting members of former Gov. Ernie Fletcher’s administration, was crowing about how “a billion dollars wouldn’t touch” what he could wring from Purdue Pharma.

Stumbo’s lawsuit charged the company lied to doctors about the addictiveness of the prescription painkiller, causing them to overprescribe it with devastating results, particularly among the poor in Eastern Kentucky.

After Purdue insulted the commonwealth with a $500,000 offer as part of a national settlement, Stumbo rightly decided that Kentucky should opt out and pursue its own case against the giant company, which, according to Forbes, has made $35 billion off the drug.

But he failed to deliver.  

A decade and a paltry $24 million settlement later – the amount agreed to by Jack Conway, Stumbo’s successor – the case continues in the courts over what, if any, information related to that agreement should be publicly disclosed.

Purdue is imploring the courts to honor an agreement made with Conway’s office to seal presumably damaging information about how it marketed its drug to doctors, patients and the public.

But First Amendment legal guru Jon Fleischaker, who’s representing STAT, an affiliate of the Boston Globe, rightly urged the Kentucky Court of Appeals to uphold Pike County Circuit Judge Steven Combs’ ruling unsealing the documents.

Combs, whose Eastern Kentucky court sits in a district where 51 people out of every 100,000 died from a drug overdose in 2014 and where a jury likely would render a judgement astronomically higher than the amount Purdue – which tried to get the case moved out of Pike County – agreed to pay, said the public has a right to “see the facts for themselves.”

Fleischaker agreed, arguing: “the public’s right to access cannot be controlled by two lawyers agreeing to keep certain records private.”

He also noted that trial courts possess “great discretion, as long as it’s not abused.”

Nothing prevents the court from releasing only information relevant to the public’s interest and right to know about this case while keeping documents revealing, say, sensitive proprietary information about Purdue under wraps.

While Purdue acted in a despicable manner, it’s a privately-owned company and courts operate on precedent.

If a private firm’s proprietary information – valuable only to competitors – is released in this case, it could have a chilling effect on companies’ eagerness to cooperate and make it tougher to litigate such cases in the future.

However, granting Pharma’s all-or-nothing demand would be an affront to Kentucky’s open records laws.

Fleischaker vigorously asserted that citizens have a right to know how this settlement was reached: “How did the court behave? How did the attorney general behave? Was it settled for too little or too much? You’re dealing with public offices and public trust in the system.”

No doubt, Conway was all too happy to stick a feather in his settlement cap at the expense of a big, bad drug company.

Plus, there has been no “I object!” from his successor Andy Beshear, who, prior to becoming attorney general, worked at the law firm representing Purdue Pharma. Beshear’s father, former Gov. Steve Beshear, now works at that same firm.

Andy Beshear’s office issued a statement claiming, “the terms of the settlement and court orders preclude the attorney general’s office from taking any position on the appeal.”

I object, your honors!

It’s understandable that the favorite position of Beshear – like most mediocre politicians – is to take no position.

However, nothing in the settlement prevents him from now advocating for the disclosure of public records, especially when the issues are so critical and implications so widespread.

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

Bluegrass Beacon: Spray schemes with transparency disinfectant

BluegrassBeaconLogoEditor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

Privatization done right can be a boon for taxpayers and those dependent on government services.

Outsourcing medical care for veterans – an idea floated by President Drumpf – would very likely reduce wait time and improve the quality of care received by those who have served our nation.

It couldn’t get much worse.

Too many veterans have died or needlessly suffered while waiting in line because of the inept delivery of government-provided care.

Worse, there’s an inadequate level of urgency to fix the problem.

Such earnestness is likely to be more present if a private company whose reputation and future is on the line is charged with delivering the care.

There’s really not a strong case for claiming that government somehow delivers medical care, builds roads, lands planes or more effectively educates children than conscientious competent engineers and teachers in the private sector.

However, even the fact that private entities can, and often do, provide these products and services at lower costs and more effectively doesn’t eliminate government’s proper, if limited, role of ensuring sound contracts, proper oversight and responses to demands for accountability, including transparency related to the spending of taxpayer dollars.

Just because government may not be the best entity to deliver a service doesn’t negate or minimize the importance of ensuring such services get delivered and that citizens still have access to how their hard-earned tax dollars are spent.

Creators of Kentucky’s sunshine laws diligently sought to provide such protection and ensure that outsourced services relying heavily on taxpayer dollars were transparent by making private companies deriving at least 25 percent of their funds from state or local agencies subject to the open records law.

However, loopholes created during intervening years weakened the law, allowing private entities like the Utility Management Group (UMG) to take Pikeville’s Mountain Water District (MWD) and its ratepayers for a ride in recent years.

UMG played hide-and-seek with ratepayers’ dollars behind those amendments, which – for some untenable reason – exempted funds received for certain types of publicly bid goods and services as being subjected to the 25-percent rule.

It must be deemed unacceptable by all taxpayers and legislators that not only did UMG deny the MWD itself the cost of operating the district, it thumbed its collective nose at then-state Auditor Crit Luallen’s request for cost information.

Whether UMG is subject to Kentucky’s open records laws will be decided by the Kentucky Supreme Court, which heard arguments in February but has yet to rule.

Kentucky legislators should now decide once and for all that secretive, costly and questionable, if not outright corrupt, agencies like UMG – which gets most of their revenues from public sources – need more, not less, light.

Private companies must understand: if they want to use taxpayer dollars to do business with government, how they spend those dollars must be subject to public scrutiny.

Failing to provide such oversight led to a decision by the Legislative Ethics Commission to fine former Rep. Keith Hall, D-Phelps, after one of his companies won $171,000 in no-bid sewer line projects he voted to include in the state budget.

Hall was later convicted and imprisoned for bribing a mine inspector.

Rep. Chris Harris, D-Forest Hills, who defeated Hall in his re-election bid in 2014, has twice introduced bills to close the loopholes and spray the disinfectant of transparency all over these public-private schemes.

“Regardless of whether a contract is placed for bid or not, the public’s business should be open and available for inspection and review,” Harris replied in a text message seeking comment.

Could consistently ensuring such transparency be even better than a disinfectant? Could it also serve as a vaccine against future secretive, self-serving and corrupt arrangements?

Let’s find out.

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

Bluegrass Beacon: Make health care affordable again

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Editor’s note: The Bluegrass Beacon column is a weekly syndicated statewide newspaper column posted on the Bluegrass Institute website after being released to and published by newspapers statewide.

Whether the American Health Care Act (AHCA), which narrowly passed the U.S. House of Representatives last month, offers an effective repeal and replacement of the Affordable Care Act (ACA) – affectionately known as Obamacare – is the subject of much debate as the Senate takes up another attempt to deal with the failed health care fiasco.

It’s indisputable, however, that any replacement plan failing to deal with cost – the primary malady affecting health-care policy – is an effort in futility.

A growing body of evidence suggests that not only has Obamacare done little to address the cost of health-care products and services, it’s exacerbated the problem.

Recent analysis by the U.S. Department of Health and Human Services indicates average premiums are 105 percent higher for Americans in the 39 states purchasing policies through the federal exchange in 2017 than for individuals’ plans in 2013 – before the exchange was created.

The analysis further unpacked reports that the average individual market premiums rose from $2,784 before Obamacare had kicked up to $5,712 in 2017.

“Affordable” Care Act, anyone?

All of this, it seems, would produce a wonderful opportunity for Republicans, who control Congress, the presidency and most state legislatures to use the leverage given them by voters to tattoo history with:  “Here’s how you do health-care reform,” and do it right.

Don’t get your hopes up.

Insurance-company lobbyists and welfare recipients have joined forces to weaken the resolve of many legislators who campaigned for changing a policy that never should have been implemented in the first place.

We would’ve been much better off seven years ago, instead of passing Obamacare, to adhere to the wise adage of President Calvin Coolidge: it’s “much more important to kill bad bills than to pass good ones.”

Still, killing not only Obamacare but its foundational ideas and approaches remains a priority.

More than reasonable doubt exists concerning whether the AHCA comes anywhere close to doing this – with its Obamacare-like approaches to taxes, subsidies and even mandates.

Northern Kentucky congressman Thomas Massie, one of 20 Republicans to oppose the AHCA, sassily compared the legislation to a kidney stone, charging “the House doesn’t care what happens to it, as long as they can pass it.”

Yet even when it comes to something as politically charged as whether we’re going to replace a health-care policy bearing the name of a Democratic president with a Republican-created substitute, progress can be made regarding critical policies in a bipartisan way.

There is, for example, strong support for making the cost of care transparent.

Costs have largely been hidden in our days of low co-pays, employer-provided plans dominated by third-party administrators and government programs.

“I don’t think I’ve ever had a Medicaid patient ask me how much something costs,” Dr. Cameron Schaeffer, a Lexington-based pediatric urologist and proponent of free-market policies, said on KET’s recent Kentucky Tonight program.

Neither Obamacare nor the AHCA effectively connects patients with cost, which is critical to making America’s great health care affordable again.

One viewer’s email read by Kentucky Tonight host Renee Shaw noted, “a free market only works when there is competition.”

Both Schaeffer and fellow KET panelist Dr. Barbara Casper, an internist, professor of medicine at the University of Louisville and Obamacare supporter, agreed providers should post their prices in a clear and understandable way.

Doing so would “help patients know what they’re getting into” and “would also allow for … more competition,” Casper said.

“I think we need to do everything we can to lower costs,” she added.

Whatever your political belief system, you will bear the burden or at least the consequences of higher health-care costs.

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

Pension crisis on Louisville’s 970 WGTK

BIPPS Logo_pickMembers of the Bluegrass Institute Pension Reform Team Dr. William Smith and Bluegrass Institute president and CEO Jim Waters appeared on “The Rest of the News” with host Dr. Frank Simon. The Saturday interview on Louisville’s 970 WGTK addressed the looming pension crisis in the Commonwealth.

The pension crisis “threatens every aspect of our economy,” according to Waters, which is why the Bluegrass Institute has spent five years working on this issue. It is both a math problem and a policy problem.

Figuring out the cause of the $38 billion deficit is necessary to find a solution. As Waters pointed out, “For years, the politicians have used the pension system to curry political favor. And this has resulted in serious problems.” Ignoring the facts has lead policy makers to promise more benefit than the state can afford.

Dr. Smith expounded on the reason why the pension system has escalated this far: “Employees and employers fund their own benefits. All these systems have a full set of actuarially pre-funded benefits, but those benefits change over time.” Because of retroactively enhanced benefits, the pre-funded account is exhausted.

While the state did perform an audit on the pension system, they only went back to 2004. Dr. Smith for the Bluegrass Institute went back to the beginning of the system, 1958, in order to assess the situation.

Though the unfunded liability is daunting, the Bluegrass Institute believes Kentucky can turn its pension system around. Dr. Smith made it clear that the state cannot, and even should not, roll back the enhanced benefits, but should “stop the bleeding.” Moving forward, “assumptions need to be based on empirical data.” Benefits calculations must be grounded in reality.

Additionally, as the Bluegrass Institute has said for years, the system needs more transparency. While many Kentuckians receive a modest pension, there is corruption in the system. Some private entities crept onto the public pension payroll, such as the Commonwealth Credit Union.

Some of the solutions the Bluegrass Institute proposes include making the pension boards accountable for their behavior. The state needs to set up independent actuarial analyses to assess the system. Crucially, the benefit factors must be set at a level the state can actually fund.

Ambiguity allows officials to use tech toys, dodge sunshine laws

COG2Bluegrass Institute Center for Open Government Director Amye Bensenhaver and President and CEO Jim Waters joined Kruser and Krew on Lexington’s NewsTalk 590 WVLK-AM  this week for a segment on Bensenhaver’s report.

Sunshine laws, Bensenhaver told the afternoon radio audience, are laws that “guarantee the public’s right of access to open records…and open meetings.” The state enacted the laws in parallel with the federal Freedom of Information ACT in “recognition that … we need those same kinds of guarantee of access.” These laws apply to agencies that receive at least 25 percent of their funding from the government.

Unfortunately, the sunshine laws are getting outdated. These open records and meetings laws were last updated in 1994, with the last substantial changes being passed in 1992.

Twenty-five years later, much work remains to be done.

Under current statute, a public official could dodge open records laws by using Skype because of a lack of clarity in the language. Bensenhaver emphasizes the importance of change to “eliminate those ambiguities that exist in the statute.”

Bensenhaver addressed violations of the sunshine laws by two of the commonwealth’s universities.

University of Louisville’s latest audit demonstrates shocking cover-ups of blatant transgressions. The University of Kentucky has held meetings, “with trustees in less-than-quorum meetings to discuss the budget excluding the public from those meetings, she explained.”

Acting this way keeps the budget discussions off the record, she noted.

These are not isolated incidents, according to Bensenhaver.

“Based on the flaw within the statute, (lack of transparency) has been a perennial problem across the state,” she said. Ignoring transparency means “you get no public discussion of a public issue.”

Bensenhaver warned: “one of the gravest threats to public access … is a decision rendered by former Attorney General Jack Conway on the last day of his  administration.” The decision declared that “those communications between public officials, if they are conducted on private devices, do not constitute public record,” Bensenhaver declared.

“That decision is so wrong,” she declared.

Kentucky has fallen behind in addressing the need for revision, which is why the Bluegrass Institute is so deeply committed to transparency.

Amy Searl is working with The Bluegrass Institute through the Koch Internship Program.