BY CITIZENS AGAINST GOVERNMENT WASTE AND BLUEGRASS INSTITUTE FORPUBLIC POLICY SOLUTIONS

Since 1991, Citizens Against Government Waste has helped save taxpayers billions of dollars with its annual exposés of pork-barrel spending in federal appropriations bills known as the “Congressional Pig Book.”

Now the battle against wasteful spending is spreading from Washington to state legislatures. CAGW is teaming up with free-market think tanks like the Bluegrass Institute to launch a series of state publications that expose overspending and identify areas of potential savings.

Kentucky’s current fiscal crisis presents a timely opportunity to produce the Bluegrass State’s own “Piglet Book.” According to the Bluegrass Institute, the new publication reveals rampant and undisciplined spending by Kentucky’s state government. It unmasks an ingrained addiction to overspending as the real culprit behind the commonwealth’s budget crisis.

Before asking hard-working Kentucky families to sacrifice one more dollar in taxes, the report asserts, lawmakers should carefully reduce their budget by eliminating waste, fraud and abuse. The “Piglet Book” is a tool designed to help legislators make better spending decisions that profit all Kentuckians over the long term rather than funding projects promoted by special-interest groups that benefit only a few.

For example, the report asserts, a tax dollar taken from a struggling single mother and spent to subsidize improvements to a state-run golf course might be better spent purchasing new school clothes for her children. Every public dollar expended to subsidize shrimp farming might instead be saved for a new set of brakes for an elderly citizen’s car. By reducing unnecessary public spending, individuals can use their own money to spend or save in a way they feel makes their own lives better.

Bluegrass Institute fiscal policy analyst Aaron Morris and research analyst Joel Peyton authored Kentucky’s first “Piglet Book.” The Institute rolled out the project yesterday during a press conference at the state Capitol in Frankfort. A portion of it is reprinted here. To read the full report, go to www.bipps.org.

Let’s meet in Corbin
Kentucky reaps the benefits of many wonderful tourist attractions like the Kentucky Derby that draw thousands of tourists and millions of dollars to the Bluegrass State every year. Many cities would love to host such events, but few communities have the infrastructure to do so.

For example, the town of Corbin (population: 8,111) has longed to bring in more tourist dollars but doesn’t have the seemingly requisite convention center. The city’s elected officials decided they wanted to find a way of building a new convention center without paying for its construction and lobbied the Kentucky General Assembly, which eventually appropriated more than $12 million in borrowed money to construct the Southeastern Regional Agricultural and Exhibition Center in Corbin.
Interest payments alone will cost an average of $75 for every man, woman and child in the city. Of course, Corbin residents will not be the only ones paying for this pork. All Kentuckians will be forced to contribute — even though most of the state’s taxpayers will never have occasion to visit this Mecca.

But that’s not the end of this story. After Frankfort politicians — who seem very (eager) to please Corbin’s officials — secured the construction money, the town needed a way to finance the upkeep of the convention center.

To do that, they decided to institute a restaurant tax. But local politicians faced a dilemma: In order to legally pass a restaurant tax, Corbin, a third-class city, could rate no higher than a fourth-class city. Again, Frankfort’s big-spending lawmakers rescued Corbin’s fat from the fire by demoting the city to fourth-class status, which allowed it to pass a restaurant tax.

While all Kentuckians will subsidize the $12-million tab to build the facility, only the continuing costs of maintaining the convention center will be paid for by those who get the most benefits from it — primarily the citizens of Corbin. Not surprisingly, even before Corbin officials broke ground for the project, they were already insisting that the project would cost more than $12 million.

In the same vein, the Kentucky General Assembly appropriated $150,000 for planning and design of an “exposition center” in Hopkins County in the 2004-06 budget.

If the people of Corbin or Hopkins County decide they want a new convention center and there is sufficient demand, they should pay for it.

Better yet, a local convention center should be financed with private funds. If such a facility succeeds to the level promised by the local politicians, some enterprising entrepreneur should notice the decided lack of space for events and build one that eventually turns a profit. On the other hand, if the private sector does not believe in the potential profitability of such a venture, why should taxpayers be left holding the bag?

State employees living high on the hog
Originally, the merit-employment system aimed to protect Kentucky’s government workers from being dismissed from their jobs for political reasons. The system was established in 1960 to keep new gubernatorial administrations in Frankfort from handing out essential jobs to political supporters and firing existing employees as a result.

This law states that the merit approach should ensure “competent, well qualified employees and insure continuity in the provision of government services by retaining experienced employees from one administration to the next.”

In the private sector, employees are retained based on their ability to carry out the mission and goals of the organization and are subject to an annual evaluation. Raises are mostly based on achieving or exceeding the requirements of one’s job.

But in Kentucky — to paraphrase Woody Allen — 100 percent of the raise depends on merely showing up. The merit system as defined in Chapter 18 of the Kentucky Revised Statutes decrees: “An annual increment of not less than five percent (5%) of the base salary or wages of each state employee shall be granted to each employee on his anniversary date.”

This 5-percent increase remains available to every state employee and occurs regardless of job performance. The amount can only be altered by an act of the General Assembly.

Not only do merit employees get annual raises, but by working on the state’s payroll, they possess one of the commonwealth’s most secure forms of employment. Supervisors must familiarize themselves with six pages of state law just to discipline an employee. Even then, numerous procedures for appeals, hearings, grievances, complaints and mediation exist.

Once someone begins working for the state, they have a secure job with little chance of termination and guaranteed raises regardless of their performance. Only a government entity could promulgate such a system.

Government positions should have the same risks and rewards as private sector employees. Having such a policy would likely improve the productivity of state government and save taxpayers millions of dollars.

For more information on the Bluegrass Institute, or to read the whole piglet book in PDF form, go to www.bipps.org.

Sources:
Let’s meet in Corbin: U.S. Census Bureau, “2004 Population Estimates,” “Census 2000,” and “1990 Census,” at http://www.census.gov/popest/estimates.php; Kentucky General Assembly, House Bill 267, “Budget of the Commonwealth,” at http://www.kentuckyvotes.org/2005-HB-267.
State employees living high on the hog: Kentucky Legislature, Revised Statutes, 018A.095, at http://www.lrc.ky.gov/KRS/018A00/CHAPTER.HTM