Just When You Think It Can't Get Worse - Youth Unemployment

Just when I thought our youth unemployment rates couldn't get any worse compared to other states, I found the 2007 data from the Bureau of Labor Statistics on the 16 to 19 year old and all age group unemployment rates. It looks like our youngest KERA educated kids in the job market are more unemployable than ever before.

The first figure shows how our 16 to 19 year old unemployment rate compares to the average for the seven states that surround us. As you can see, we are in the worst position ever, with a rate 6.7 points higher than the average for our neighboring states. The growing trend of decay for Kentucky is also unmistakable in this figure.



Not shown in the figure, our 2007 youth unemployment rate of 23.1 percent is also the highest among Kentucky and its seven neighboring states.

OK, you say, maybe the overall rate in Kentucky is up, too. Maybe the youth increase is just following an overall trend. Well, guess again.

I checked that excuse out, and it didn't wash. This next figure shows the youth rate and the rate averaged across all age groups in Kentucky.



Notice that the overall average unemployment in the state stayed fairly stable over the years. The growth is in youth unemployment only, as the next figure shows. The gap between the youth unemployment rate and the overall average rate in Kentucky has been growing ever since the KERA school assessments started in 1992.



This leads us to a major promise from KERA -- that our kids would get better educations that would make them more employable.

Well, it isn't happening. Despite the fact that the overall unemployment rate trend shows jobs are not drying up here, the kids are not getting hired out of high school.

This is a major problem -- one that policymakers simply cannot ignore any longer. KERA is failing these kids, and failing them in sharply increasing numbers.

If you want to see the latest BLS report, click here. It won't be happy reading, unless you are an older Kentuckian who was educated before KERA came along.

Frankfort, We Have A High School Dropout Problem

Bellarmine University hosted a High School Dropout Solutions Summit yesterday.

Organizers originally expected about 100 participants, but in the end nearly 450 showed up – clear testimony that tons of people in this state get it – high school dropouts are a major problem – and one that KERA most definitely has not solved.

The event’s logo was a stylistic artwork proclaiming “1 in 4 is too many!” That says it about right – at least in so far as we can get any sort of handle on the true dimensions of the high school dropout problem in Kentucky.

The very well-done morning keynote presentations accurately pointed out many things that lead to the conclusion that the high school graduation rate problem is indeed a crisis for this state and country. Speakers noted the proliferation of confusing graduation rate calculations over the past few years that just create a smokescreen around the truth, showing that you can find “official” graduation rates for Jefferson County schools running from only 63 percent up to 75 percent. Keynote presenters pointed a well-aimed finger at the US Department of Education’s inexcusable failure to fix this problem when No Child Left Behind came along. There were no smiles in the room when the main speaker pointed out that the US graduation rate now ranks only 15th in the world.

Overall, I was impressed with the keynote presentations. Thus, I looked forward to the afternoon breakout session I had selected to attend where the Web announcement of the conference promised, “participants in this track will identify policy issues that hinder students from graduating…and make recommendations for policy and legislative changes that will work toward getting young people to graduate and become prepared for careers and/or postsecondary education.” Sadly, that wasn’t what happened at all.

Instead we were run through a fairly typical “Delphi Technique” effort to get participants to legitimize and rank order a set of 26 policy ideas that had already been worked up in advance by “others.” There was a totally inadequate time to discuss these suggestions – some very good, some loaded with unintended consequences, and some that had only a most tenuous relationship to dropout rates, at best.

Worse, there was little time for the very well qualified participants (which included MANY college professors and public school educators) to add additional items, and there was no time for the group as a whole to discuss these newly added items and ask any questions about them.

Thus, the vote on the final list was inadequately informed, rushed and ultimately unreliable. It is a shame that the collection of so much talent and knowledge was so poorly utilized as a consequence of selecting the Delphi process to manage the working groups – a lesson the conference organizers need to carry forward if summits are attempted in other cities.

By the way, the dubious character of the Delphi rankings was indirectly emphasized by Dr. Shelly Berman’s surprise at the end of the conference that some other very important items like a renewed commitment to academic rigor were not on any working group’s final list. Ultimately, if kids are not learning material, they become prime candidates to drop out later, so our currently high dropout rates obviously signal a need to reexamine our academic requirements for all grades. Bravo to Dr. Berman, who is the superintendent of the Jefferson County School District, for spotting this obvious problem in the results of the conference. I guess you were not one of the chosen “others” who put my working groups’ pre-ordained list of 26 items together, either.

I hope Dr. Berman and others take the rank ordering of the recommendations from my working group for what it is – an inadequately deliberated, rushed product that can’t be considered trustworthy. I suggest looking at the 26 items without paying any attention to the bogus rankings, but be aware some are minefields (like bad ideas to use GEDs to inflate graduation rates for high schools), while others do appear to have value. If you don’t trust your own judgment, set up your own committee to advise you, but give them adequate time to do research and deliberate before taking any votes. Delphi meetings won’t get you what you need.

I must add that the day was not lost, however. After my working group shut down, the room quickly emptied except for me and a college intern. She was left behind to clean up the mess of left over office supplies. I started to talk to her, and she wistfully mentioned that no-one listens to her, but she has some ideas about what is really behind the Jefferson County dropout problem. I told her I was listening, and she explained she came from the West side of Louisville and grew up with lots of kids who later dropped out. She saw a common thread in their failures – drug abuse, plain and simple.

This is something that adults talking to kids who have dropped out are not likely to find out. After all, do you think a kid who is probably still abusing drugs is likely to admit that to some strange adult? But that dropout might tell one of his friends, like my young intern. Maybe Dr. Berman needs to listen to her – I can confirm she presents herself very well indeed. You just have to take time to listen.

So, in the end, I came away from the conference with several things of value. Some of the 26 ideas are worthwhile, and I am going to see if there is some way to expand on the young intern’s observations. After all, while the drug problem was one of the 26 policy items on the “others” list, it didn’t make it into the top five in the Delphi voting process. Maybe, if more had listened to this young intern, it might have.

Spanking legislators till they can't sit down

I didn't expect Franklin Circuit Judge Phillip Shepherd to cancel the road bill because it was passed using the legislature's "stop the clock" trick, but that is what he did.

The trick involves pretending that the last day of the General Assembly session doesn't end at midnight, but instead that it goes on until lawmakers feel like stopping.

Now might be a good time to remind them that if will only move the filing deadine to after the end of the session, this last-minute game playing probably be an issue.

Each election year, lawmakers sit around the first month doing practically nothing while they wait for the election filing deadline to pass. That is clearly a luxury we can no longer afford to allow them.

Doing something real for the economy

While some are content to toss around tax dollars and call it economic development, a huge national manufacturer's trade group is about to announce that it's major grassroots initiative will include Lexington.

The Consumer Electronics Association's Free Trade Bus 26 state tour will make a stop in Lexington the morning of September 5th to draw attention to the importance of getting government out of the way of international trade.

From the press release:

"After decades of America believing it can compete and win in global markets, a disturbing trend, spurred on by fear-mongering commentators, has led some to turn against trade. A recent CNN/Opinion Research Corporation poll found that for the first time a majority of Americans view foreign trade as a threat to the economy."

"The facts demonstrate that trade creates millions of American jobs and provides billions of dollars to our economy. When America competes in the global marketplace, our nation's economy and workers win," said Shapiro. “The success of our consumer electronics industry in the United States and around the world is proof that the fear-mongerers and naysayers are wrong about trade. It’s vital that we take this message to the people.”

"Spurred by trade, the consumer electronics industry is projected to generate $1.4 trillion in direct business activity this year and directly employ more than 4.4 million Americans. Trade plays a critical role in the industry’s health – for example one in seven of those jobs, or about 616,000 jobs, is directly tied to America’s trade overseas."

Former Governor Martha Layne Collins is expected to play a role in the event. Congressman Ben Chandler's participation would be a welcome bonus, but is not widely anticipated.

Is Beshear a pro-business Governor?

When Site Selection Magazine ranks the states later this year, Kentucky is likely to be at the top of the heap.

What they don't tell you is that corporate welfare or incentives determine placement in those rankings, not whether a state is really a good place to locate and grow a business.

Sure glad House saved Treasurer's office

You've heard all the belt-tightening blah blah blah in Frankfort all year. If the House is still looking at someplace easy to cut, they might rethink their decision to kill SB 14, the bill to shut down the Treasurer's office.

Here's a little food for thought:

California dreaming, Kentucky scheming

Getting out of the business of shilling for politicians has never felt so good to me as it did this morning when I read the following effort from Gov. Steve Beshear's new blogging defender:

What the writer is trying to do is draw a parallel between Kentucky's relatively brief and uneventful budget stand-off and California's fireworks. There is actually a lesson to be learned here about partisan politics, though using the budget process in Kentucky this year to shill for one of the participants is a bit of a stretch. In both California and Kentucky, Democratic legislators championed tax increases and Republicans pushed for massive borrowings. In Kentucky, Beshear "passed" a budget by giving in to Republicans. California's Democrats will wind up "giving in" as well.

Our massive borrowings may not match up to California's in terms of sheer size, but proportionally, we are already way ahead of them.

Trying to score political points from these sorry episodes is hardly worth the embarrassment.

Counties group upset about deck chairs

When someone seems inordinately concerned with an inconsequential detail in the face of a major disaster, he is sometimes said to be "arranging deck chairs on the Titanic."

Such is the case with the Kentucky Association of Counties in their response to the new pension reform bill. From The Courier Journal:

"The Kentucky Association of Counties plans to lobby the 2009 legislature to change one aspect of the pension reform bill passed during this summer's special session."

"The new law bans retirees who return to the public sector -- state and local governments and school systems -- from collecting a second pension. But their government employers are still required to contribute a percentage of those workers' pay to the retirement systems."

"Bob Arnold, the association's executive director and chief executive officer, said it's unfair to force governments to make those contributions if employees can't collect any extra benefits when they retire a second time."

What Bob doesn't seem to understand is some combination of higher employee contributions and/or lower benefits has to happen to hold off bankruptcy for the retirement system.

And if he is unhappy now, he will be really upset when we get serious about reform.

Insight into the Massive Special Education Problem

A most remarkable comment showed up in a recent US News and World Report article.

The article discusses new teaching methods that identify and help students BEFORE they wind up getting labeled as special education students.

In a negative reaction to this new program, which seems to be a promising way to help kids, USN&WR quotes an education professor as saying, "Everyone's great fear is: Will the science compromise the art of teaching?"

I find that comment terribly revealing. I can't help wondering if the quote is accurate.

Real science is all about determining the truth concerning cause and effect – in this case, the best student reaction to different methods of teaching.

So this quote basically asks, “Will the truth about what is needed to meet students' educational needs be allowed to interfere with teachers doing whatever they prefer instead, regardless of whether those teacher-preferred practices work better for children?”

If this sort of philosophy is actually present in our education schools, we have been presented with some great insight into why so many kids wind up in special education while the results of solid research into what works gets discarded in favor of some sort of ill-defined teaching “art.”

Busting a cap in Obama's class warfare

Parents and students stuck with failing schools in Kentucky have no opportunity to move their children into a charter school like they would in California, or a private school like they would in Washington D.C. Our soon-to-be legislative liaison from the Kentucky Department of Education Frank Rasche saw to that (here and here).

Kentucky's Democratic primary voters rejected Sen. Barack Obama. Seems like they would reject this, from the Wall Street Journal, as well:

"A visitor to Mr. Obama's Web site finds plenty of information about his plans to fix public education in this country. Everyone knows this is a long, hard slog, but Mr. Obama and his wife aren't waiting. Their daughters attend the private University of Chicago Laboratory Schools, where annual tuition ranges from $15,528 for kindergarten to $20,445 for high school."

"When the day arrives that these two candidates face off, we hope Senator McCain comes prepared to press his opponent hard on change, hope and choice in the schools."

"'Government whitewash' for $100, Alex"

The General Assembly's Education Assessment and Accountability Review Subcommittee will meet in Frankfort on August 12.

On the agenda: a report on the goals of the Department of Education’s Task Force on Assessment and Accountability.

This is the education establishment's cover for killing SB 1 or anything else that might make our system of public schools more efficient.

Tell them where to stick their carrot

People change behaviors when presented with sufficient incentive to induce change. A clear understanding of this truth generally creates public policy that works.

And then there is the other kind.

Governing Magazine sent a staffer to a health policy seminar and she concluded from the whole thing that the best plan is to spend more Medicaid money to educate people about healthy lifestyles:

"A primo move for a state that wants to improve the access of its citizens to health care is to make sure they get an education when they’re young. While awaiting the day when all high schoolers graduate and are literate, Medicaid officials should look into shifting spending into educating beneficiaries about health and health services. That way they can make use of all those services Medicaid promises to provide but beneficiaries tend not to understand or use."

You can rest assured that the writer of the above paragraph didn't mean "spend the same or less" when she said "shift spending into educating beneficiaries."

I'm more than a little skeptical of a plan to produce healthy lifestyles videos for Medicaid recipients and hope they suddenly make better health choices while we continue to subsidize methamphetamine and crack cocaine habits.

Dispatches from Workers Paradise

No, not China, silly. Massachusetts!

Someone has to keep beating the drum about how greater government involvement in healthcare costs billions of dollars more than "anticipated" without solving what it purports to solve.

Kentucky can not in any way afford to go down this road.

Still pimping weak pension reform bill

Speaker Jody Richards trotted out his apologist actuary again today to make the ridiculous claim that last month's pension reform bill was really, really good.

"Next, HB 1, the legislation that was enacted, is projected to save more money in the long run than any of the other proposals that were made during either the regular session of the General Assembly or the negotiations that led up to the special session. Those HB 1 design changes will save state taxpayers billions of dollars in the long run."

That will provide cold comfort to taxpayers who, having "saved" billions of dollars, still will be on the hook for many billions more. This actuary, Patrick Welsh, then finished up his empty argument with this fancy little bit of quod erat demonstrandum:

"and do not underestimate the value of the design changes made by House Bill 1's reforms. I've seen the numbers."

I think that is actuary-speak for "don't argue with me, I'm an actuary."

Somehow, I think this report was meant to be a refutation of this. But it wasn't a very good one.

ICARE, but we shouldn't

Two important healthcare initiatives came up in the 2008 Kentucky General Assembly and, surprisingly, one of them ended in victory when the Senate refused to extend the ICARE entitlement. The loss came when the House failed to move toward doing away with CON.

Here is the flashback to March of this year. This next Tuesday, the Joint Committee on Banking and Insurance will discuss the dying ICARE program Gov. Steve Beshear promised to expand during his election campaign.

Reviving this entitlement when we can't afford the entitlements we can't get rid of may not be the best idea.

Selling strained credulity on Ebay

Education Commissioner Jon Draud is selling his $31,000 car on Ebay. You remember: it's the one he ordered and then lied about. And now he wants you to know he will buy it for the whole $31,000 if someone else doesn't bid that high.

No doubt he will pay for it with the $40,000 freebie the legislature slipped him earlier this year.

Tennessee's "basically harmless" tax collectors

Gov. Steve Beshear said a week ago he was open to eliminating Kentucky's income tax. Let's just hope he hasn't been talking to Tennessee Gov. Phil Bredesen, whose Revenue Department has some incredibly bizarre tax collecting rituals in their no income tax state.

Get ready for the Kentucky Horse Tax

Gov. Steve Beshear has announced formation of a task force to save horse racing in Kentucky.

I'll take a wild guess and expect they will want money and tax increases. Oh, and casinos.

"Operation successful, but the patient is dead"

Ohio might be the next state to go for expanding its healthcare spending well beyond its ability to pay for it, Cincinnati.com reports:

"If the entire plan proposed to Strickland by a special task force he appointed last year is adopted, it would cost $1.5 billion to $2 billion a year and likely would require new taxes. He hopes to cover about 500,000 of the 1.3 million uninsured Ohioans by the end of his first term in 2011."

And you can't blow up a state budget with new entitlement spending without bringing up Massaschusetts. This quote from the same story should be instructive:

"In Massachusetts, for example, projected costs for a 2006 plan aimed at universal health coverage have doubled to about $1.35 billion a year, but the plan has covered about 350,000 more people."

""It's unbelievably exciting but it's killing us financially," said Jim Conway, senior vice president of the Institute for Healthcare Improvement in Boston, who spoke to the Greater Cincinnati Health Council in June."

It's way past time to dial back government involvement in health insurance contracts. The Nanny State watches people sign all kinds of legal agreements on their own every day without breaking the bank expanding government programs. Who decided health insurance contracts needed such intense regulation and subsequent taxpayer subsidization?

Either way, if Ohio follows through on this it may help Kentucky in regional economic competitiveness rankings.

Ignoring healthcare reality at our peril

I'm starting to wonder why so many people are going to such great lengths to ignore healthcare policy issues these days.

Take, for example, The Boston Globe. The paper has to earn Wednesday's prize for greatest effort to ignore the impact of healthcare in a news story:

"Massachusetts, which earlier this decade had the lowest percentage of eligible residents using food stamps, now has the fastest-growing food-stamp program in the country, a dramatic turnaround that state officials attribute to soaring food prices and a simplified application process."

"As food and fuel costs continue to rise, the officials say, people who would not normally use food stamps are turning to the federal program to make ends meet."

""I think low-income families are faced and will be faced this winter with the difficult choice of eating or heating a home," said Patricia Baker, senior policy analyst for the Massachusetts Law Reform Institute, a nonprofit organization that advocates for the poor."

So we are supposed to be prostrate with grief because of rising food prices (maybe) and a massively liberalized food stamp application process (definitely) preceded a huge increase in new food stamp recipients in a state that is running itself to ground passing out "free" health insurance to all comers, regardless of how sick they are?

It's folly to ignore the role of socialized medicine, which is attracting and insuring low income people to the state who then sign up for food stamps.

Good thing Gov. Steve Beshear had to back up on his health insurance giveaway campaign promises. Of course, though, here comes Barack Obama.

Will Beshear hire David Williams' majority?

Gov. Steve Beshear has to be watching Ohio Gov. Ted Strickland eat into his state's House Republican majority by hiring away GOP incumbents in close races.

"Gov. Ted Strickland might have found a new formula for helping his fellow Democrats capture control of the Ohio House this year: If you can't beat 'em, hire 'em."

"Strickland already has been plenty helpful to House Democrats, particularly in their fundraising efforts. Now, in a move that has angered Republicans, he's taking a new tack by hiring away GOP lawmakers in key districts."

"In one day, House Republicans lost candidates in two swing seats that suddenly became much more competitive. Democrats need a net pickup of four seats to take control of the chamber for the first time since 1994."

Legislators voted themselves a powerful incentive to become susceptible to such an offer in 2005.

Jumping out of the Medicaid frying pan

An interesting national debate may be on the way regarding helping states with ballooning Medicaid spending by expanding Medicare to include nursing home care.

Kentucky already makes purchases of Long Term Care Insurance tax deductible and last session made a very strong move toward incentivizing purchase of a policy to save taxpayer money.

As tempting as it might be to some to shut down a sector of the insurance industry and replace it with benevolent government bureaucrats, someone might wish to point out that efforts to save money by making government bigger often doesn't work out so well.

Tighten your belt: Rasche, Graham need a raise

House Education Committee Chairman Frank Rasche is leaving the legislature to join the growing list of lawmakers who are blowing up the public employee fringe benefits system with the 2005 platinum handshake they passed for themselves.

What's even more exciting is his replacement to chair the committee is likely to be another walking, talking conflict of interest: school teacher Rep. Derrick Graham.

"See this apple? It's really an orange"

It's easy to tell that the work of the Bluegrass Institute is not complete when the Louisville Courier Journal editorial page trots out another Sunday op-ed extolling the virtues of the Kentucky Education Reform Act and claiming that all will be well with our K-12 pubic schools when we just give them "enough" money.

"The landmark state Supreme Court ruling in 1989 and the subsequent passage in 1990 of the Kentucky Education Reform Act are considered among the most significant events in the history of our state and its schools. But there have been many opportunities for KERA's changes to run into a ditch. It has been the tenacious, focused efforts of committed Kentuckians -- particularly the hundreds who have volunteered their time with the Prichard Committee -- that have kept school improvement on course."

"That course has moved Kentucky up from the cellar and is pointing us toward the higher echelons of the nation. In just one generation, the state has moved from a 43rd place ranking among the 50 states to 34th on an index of indicators developed by the Kentucky Long-Term Policy Research Center. The index shows that national test scores, dropout rates and the number of high school and college graduates show improvement across the board."

Those statistics sound good and suggest the conclusion you are supposed to draw that throwing more money will spur on the demonstrated momentum. But the research behind those statistics is not legitimate. Our Education Analyst Richard Innes debunked that Kentucky Long-Term Policy Research Center report almost a year ago.

“Infinite Campus” equals Infinite Heartache?

The latest slam on the Kentucky Department of Education’s (KDE) student tracking program called “Infinite Campus” was leveled in the Kentucky New Era on July 19.

Apparently, the user unfriendly computer program made for some long delays during student registration at Christian County High School.

Infinite Campus isn’t fully up and running in all school districts, but it certainly has had growing pains during the pilot stage.

The KDE says the student tracking program is to be up in all schools by the end of 2008. Given the number of complaints to date, that isn’t looking like much of a Christmas present for those schools that have yet to tangle with this tangle.
I last wrote about Infinite Campus’ woes only a few days ago in an article about new California dropout rates from that state’s new and much more accurate student tracking system. Infinite Campus is supposed to serve a similar function here. But, if students take hours just to get registered in the new system, it is highly likely that the data it produces won’t be worth much for a long time. Of course, given that we expect Kentucky will have to own up to much lower graduation rates and much higher dropout rates once Infinite Campus is working, maybe the confusion and delay was someone’s idea from the start.

Perhaps it’s time to call California to find out how they can do this job – now – with hundreds of thousand more kids, better than we can.

Three citizens sue for waste of welfare money

Three central Kentuckians sued the city of Lexington, the Lexington Health Department, and the Kentucky Office of Vocational Rehabilitation this morning in the U.S. District Court of Eastern Kentucky for improperly providing welfare benefits to illegal aliens.

The case is a Petition for Writ of Mandate, which any citizen may file for $350 without an attorney, and asks that the defendants be required to follow federal law and stop illegally providing taxpayer-funded benefits to people who are not in this country legally.

Court documents in the case reference specific federal laws regarding verification of eligibility for public benefits, restricting public benefits for unqualified aliens and states that the defendant agencies have ignored those laws.

The petitioners, David Duncan and Wendy Devier of Lexington and Jenean McBrearty of Danville, claim that they filed the suit because they "have no other speedy and effective way to compel the LFUCG and its agencies to stop providing public benefits and services to illegal aliens."

"Removing illegal aliens from the rosters of eligibility will save the Petitioners' and other Kentuckians' taxes and provide more services to legal Kentucky citizens," the petitioners said.

The suit asks for the city of Lexington to be ordered to stop providing benefits to people without valid drivers licenses and Social Security numbers. The suit also asks for the federal government to restrict all federal funds coming into the city of Lexington until the city and all of its agencies are in compliance with federal law.

No Need to Worry Here?

It looks like there’s been some pretty blatant cheating on New York’s high stakes public school testing.

Can Kentuckians breathe easy?

I doubt there has ever been a rigorous check in Kentucky to see if all the test prep materials our kids get exposed to before CATS testing have any similar problems.

The Kentucky Department of Education only changes out a small portion (20% was the last number I heard) of the CATS questions every year. The rest are ‘repeaters.’ And, the department has been notoriously difficult about letting independent organizations look at the CATS questions. Furthermore, the department has only dribbled small amounts of obsolete questions out into public view. So, there isn’t an easy way for an independent and unbiased group to do this sort of badly needed study, either.

If this guy can get it, anyone can

Peter Orszag says we should cut government spending and that is significant.

You see, Orszag is the former Deputy Director of Economic Policy at the Brookings Institution -- they are the folks who said the solution to the Fannie Mae/Freddic Mac is a total government takeover (seriously) -- and is currently Nancy Pelosi and Harry Reid's Director of the Congressional Budget Office.

In a letter about tax policy dated Thursday, July 17, Orszag said:

"Legislation to limit the growth of the AMT or to extend the tax reductions beyond 2010 would increase federal budget deficits and federal debt, relative to those that would occur under current law, unless offsetting changes in federal taxes or spending were also enacted."

We haven't had a tax increase on the federal level in fifteen years and sober heads will likely prevail to extend that streak.

That leaves "legislation to limit the growth of the AMT" and "to extend the tax reductions beyond 2010" and "offsetting changes in ... spending" as the only politically palatable fiscal actions.

Now that Peter Orszag understands this, someone tell him to call Steve Beshear, Greg Stumbo, and David Williams.

Robert Novak speaks

Austin Texas is blogger central this weekend as it plays host to Netroots Nation and Americans for Prosperity (that's the left and right, respectively).

Keynote speaker Robert Novak is not optimistic about Republican chances in Congress and says Obama is currently 12 electoral votes ahead of McCain.

"Why in the world is this race so close?" Novak asked.

His answer to his own question is that the middle doesn't trust Obama. He said the key issue is whether Obama "a very liberal young man" is ready to lead the country.

Novak said Hillary said privately that she lost the primary because she voted to go to Iraq and Obama voted against it. And now Obama is saying he wants to leave 50,000 troops in Iraq indefinitely.

Novak said Hillary is not one of the worst appointments to the Supreme Court Obama would make.

Said big lobbying effort going to make John Edwards the Attorney General under Obama.

Novak said the bright spot for coming losses by Republicans in the Congress would be the opportunity for new leadership in both chambers.

Novak said there is no chance that a new conservative party would rise up to replace the Republican party.

"The Republican party is frustrating and does stupid things sometimes, but it is the party of Goldwater and Reagan and it is the only hope we have."

Novak spoke glowingly of the FairTax proposal to wild applause from the audience (no exaggeration.) He said that Rep. Paul Ryan's flat tax proposal would be easier to pass. Said that he mentioned Ryan as a possible veep on television as a trial balloon and that it crashed. He said Ryan should run for the Senate from Wisconsin and ultimately for President.

He said Eric Cantor will probably be the next minority leader in the House. He said Senator Jim Demint would make a great Republican leader, but that it probably won't happen.

Novak said he would like to see Rob Portman on the Republican ticket as Vice President, but doesn't think McCain will take him because he's too close to Bush. Thinks Romney will be the pick for the GOP and Virginia Governor Tim Kaine is the most likely pick for the Democrats. Said Sen. Joe Biden is the second most likely pick.

Said that Norm Coleman is the second most likely veep choice for the GOP. Also said Coleman would be a sure loser in his Senate race in Minnesota except that he is running against Al Franken.

Please, No “Erwin 2”

The Courier-Journal reports that the Kentucky Council on Postsecondary Education (CPE) is hiring a new search firm to help find a new council head.

The search contract’s costs could run more than three times what the Kentucky Board of Education (KBE) paid a search firm for the aborted Barbara Erwin mess last year.

Hopefully, the CPE has done some “life-long learning” and won’t place total, blind faith in the search firm like the KBE did. Also, the CPE better not keep the names secret until the very end, and they better listen to independent researchers and reporters if problems are unearthed.

And, there better be some sort of penalty clause in this contract, which could be more than three times as costly as the bill the KBE paid for non-performance.

Bottom line: Let’s keep this process open and transparent. That would be nice, for a change.

New money scandal coverage speaks volumes

After spending the first month of the Robert Felner scandal at University of Louisville acting like stealing $694,000 was just boys being boys, The Louisville Courier Journal is now content to cheerlead the main fox as he guards the henhouse:

"The irony is that any mistakes in money management were made on the watch of Dr. Ramsey -- an expert in budget matters. The good news is that, if anybody knows how to improve financial oversight, he should."

That sounds great. U of L President James Ramsey didn't think of managing finances well enough to prevent a $694,000 theft, but they think he is just the guy to prevent it from happening again.

Sounds like someone is a little too interested in getting invited to all the right parties.

One good way to show we're serious

A New York town council is blazing a trail toward fiscal sanity by eliminating opulent health insurance benefits for part-time elected officials and government workers.

"The new policy applies to any part-time worker who was elected or appointed after Jan. 1 of this year. The three board members elected in November declined the town's medical coverage, and current part-time town employees with health coverage will keep it, board member David Gelfarb said.

Dropping health insurance for future part-time employees was an essential part of the new personnel policy, he explained.

"It was a significant aspect of it because of its tremendous cost component," he said. "The health benefits are approximately 13 or 14 percent of the town's budget. There is a need to match the legitimate expectations of employees with the taxpayer concerns with ever-increasing property taxes."

The state of Kentucky would do very well to follow their example. It's just too bad meaningful reform like this wasn't part of last month's special session.

Tennessee Not Messing Around with Poor Performing Schools

We already had our sights on Tennessee education, and new action down there adds to the growing evidence that the Volunteer State isn’t messing around about education reform. In the latest example, the Nashville Tennessean reports that many of the city’s schools with poor No Child Left Behind performance are getting new principals.

According to the newspaper, Tennessee already has a small track record in this area. They replaced the principal at the Maplewood High School last year. This year that school met its testing benchmarks for the first time in almost a decade.

Meanwhile, here in Kentucky, doing anything significant in local school systems – even when clearly warranted – is as far away as possible from the minds of Frankfort educators.

Consider Kentucky’s case in point high school example. Last year, despite abundant evidence that the Covington Independent School District’s Holmes Junior-Senior High had horrible performance, the Kentucky Board of Education refused to step in beyond shifting control of the school’s site base council to – that district’s own superintendent. No one got replaced. The state board did the very least it could get away with. That’s what happens when there is a failure to lead.

Well, it looks like Tennessee’s education system understands its obligations, and that state clearly has leaders who are willing to step out and make some tough choices. And, we think it’s working in Tennessee. We’ll tell you more about that very shortly.

Mike Cherry's new nickname

I don't normally read USA Today because they usually cover state stories from 30,000 feet, missing most if not all details. Such was the case when they flew over Kentucky's official inaction on pension reform.

The first tip-off that they didn't bother to look at the $27 billion (and growing) unfunded fringe benefits liability for public employees is that they only managed to scrape up the utterly clueless Rep. Mike Cherry for discussion of double-dipping.

On cue, Cherry worked up some level of pretended outrage for the record on one of the smallest parts of the benefits debacle:

Representative, I dub thee Mike "Absolutely Ludicrous" Cherry.

A few years from now when Rep. Cherry is retired and sucking up his own fat pension at home, Kentuckians paying his bills will have a few choice words for the cost and we won't be able to print them on a family blog like this.

Honest High School Dropout Reporting in California Brings Huge Rate Increase

California recently started a high quality student tracking system, and the first results just came out. The state now admits that one out of four kids didn’t make it through high school.

The new dropout rate for California is listed as 24.2-percent. Last year, using a calculation the Los Angeles Times now labels “discredited,” Californians were told only 13.9-percent of the students were lost during the high school years.

Here in Kentucky, we are still waiting for our troubled student tracking system to even start. The first attempt, the STI system, has been cancelled, and the replacement, called “Infinite Campus,” is generating lots of complaints from the pilot school districts. Never the less, the Kentucky Department of Education says they are going state-wide with Infinite Campus anyway by the end of the year.

Meanwhile, Kentucky remains where California was, using officially “discredited” data from our CATS nonacademic reports that do nothing beyond inflating CATS school assessments and No Child Left Behind results.

Beshear wants to "fix" Kentucky energy

Get ready for taxes and energy prices to go up if Gov. Steve Beshear's new proposed "Make Kentucky the Energy Capital of the World" plan becomes a reality.

Beshear wants Kentuckians to use less energy and use more alternative sources of energy and to produce two billion gallons of motor fuels a year from coal.

Beshear said today he plans to release a comprehensive energy plan in September.

Mass media getting slower and slower, even in the Web

The print version of the Kentucky Post died last year, but a ghost in the form of a Web version lives on. Still, the Blogosphere often keeps well ahead of such mass media efforts.

The latest case in point is the July 15 KYPost.com article, “College Transition Programs Helping, Lawmakers Hear.”

The referenced meeting actually occurred over a week earlier on July 7, and we commented on it in this Blog on July 8.

The 15th must have been a “very slow” news day. Herein may lie a clue to the print Post’s decline. Our rather different take from the Post’s on key comments at the meeting may be another clue.

"What's Beshear waiting for?" Wednesday

Insiders close to Gov. Steve Beshear's e-transparency task force say the online checkbook program used by Missouri is the probable model for a similar site to allow Kentuckians to know where their tax dollars are going.

Beshear may eventually show us the money like Missouri does, but he should explain now what all the waiting around is about.

Missouri Gov. Roy Blunt opened up his state's finances to taxpayer scrutiny without waiting around for his legislature or anyone else. He signed an executive order putting Missouri's checkbook online back on July 11, 2007.

How do you say "bust the union" in German?

Volkswagen is building a new plant in Tennessee. While it is no surprise to see them ignore Kentucky due to our inability to pass a Right to Work bill, it is a drop-dead shock to see the Associated Press point this out in their news story:

And some people in Georgetown want to bring the UAW into the Toyota plant, believing that the automaker would just suck it up and stay here.

Lawmaker wants transparency to come faster

Rep. Jim DeCesare said today he plans to re-file his government transparency bill from last session and that he would like to see the rest of state government pick up the pace toward a more open and honest approach to spending taxpayer money.

"I appreciate Trey Grayson's efforts and I'm glad to see Governor Beshear coming around on this a little bit, but I'd like to see him move a lot quicker. (Posting expenditures online) doesn't need to be studied. The studies have already been done," DeCesare said.

Gov. Beshear called last month for a task force to study government transparency and the task force held one meeting on June 19. Finance and Administration Cabinet spokeswoman Jill Midkiff said today that a second meeting has not been scheduled.

Government transparency one agency at a time

In a regular meeting today, the State Board of Elections voted to put it's expenditures on the internet today, according to Executive Director Sarah Ball Johnson.

The Board is following the example of Secretary of State Trey Grayson, who is also the Chairman of the Board of Elections.

Requiring state government to post expenditures on the internet for all to see is one of the top priorities of the Bluegrass Institute.

Another opportunity to call for transparency

WHAS reporter Mark Hebert is interested in the cost of government agency conferences after getting a tip that Kentucky taxpayers spent $26,000 for a regional agriculture conference in June.

The coverage and the complaints surrounding this episode seem a little selective and probably have more to do with rumors of Agriculture Commissioner Richie Farmer running for governor in 2011 than with a sudden media interest in fiscal responsibility. (I'm glad to be proven wrong on this, but that would involve comparing the costs of other conferences and determining which items were unnecessary.)

If we really want to have a discussion about the cost of government conferences, then we should really have one. Putting all government expenditures on the internet for everyone to see would make it easier to find instances in which tax money is wasted, rather than waiting around for someone's political opponent to get mad and hand over some records to a reporter.

Kentucky's drug problem is a demand problem

The Lexington Herald Leader's editorial page is half-right in saying this:

"Drug abuse will continue to take a tragic toll on Kentucky communities as long as people seek to escape the reality of their daily lives through an addictive pill.

There are few simple answers. But as a practical matter, it will be impossible to make a dent in demand as long as drug-treatment options in Kentucky remain limited."

The key is in the "escape the reality" part, which is correct. Policymakers seek to escape the reality of natural consequences from the welfare state when they fall for the idea that drug treatment is the key driver for lowering demand for drugs to abuse.

In reality, welfare reform is the key.

Subsidizing with tax dollars lifestyles of the dazed and confused allows drug abusers to delay the natural consequences of their actions. We could have had a meaningful debate about using public money to buy illegal drugs for addicts earlier this year, but we did not.

Perhaps we will next year. Until then, we are simply feeding the demand we seek to stop.

Congressman Ben Chandler will hate this

A major trade organization will soon announce a "Free Trade Bus" tour around the country to start later this month. The bus will stop in Lexington on September 5.

Fifty thousand flushes of Lexington's toilet

Lexington taxpayers have wasted $50,000 (and counting) paying former Councilman Steve Kay to "consult" on some silly thing called Destination 2040.

This has been mentioned before, but it gets worse the more you look at it.

Time to take a look...

And they think the feds will save Kentucky?

Now that it looks like the federal government is going to step in and prevent reality from falling on the mortgage market, Kentucky policymakers holding out hope for a federal bailout of our public employee fringe benefits mess have to know the cavalry isn't coming:

"In choosing inflation over the collapse of the real estate market, which a Freddie and Fannie bankruptcy would immediately produce, the government is trading lower home prices for higher consumer prices. However a real estate price collapse is inevitable. Either nominal prices will fall sharply, or real prices will be crushed even more. The government has predictably opted for the latter. So buckle up, and prepare for a dollar collapse and soaring consumer goods prices, as the direct consequences of this “bailout.” In the end, even those getting the bailout, holders of Freddie and Fannie insured mortgages, will lose, as the value of the dollars in which these bonds are denominated go up in smoke." – Peter D. Schiff, Euro Pacific Capital

In the midst of all this national turmoil, Kentucky is going to have to work out its own solution to our problems. And soon.

Driving toward welfare reform in Kentucky

A tax collection device used in two states and the Dictrict of Columbia might hold a key to entitlement reform and greater fiscal competence in Kentucky.

Massachusetts is actually poised to join Rhode Island, Louisiana, and D.C. as the only states with the capability to suspend drivers licenses of citizens who are delinquent in paying state taxes.

Taxpayer groups who traditionally speak out on tax issues won't get much traction against a move like this because, in the eyes of the law, driving is a privilege and not a right.

Kentucky might consider the same approach to beefing up tax collection efforts because, of course, anyone who isn't paying his share of income taxes is costing everyone else more.

Enacting such a tactic would generate significant interest and debate. And at that point, when discussing the rights of those not paying their fair share, the discussion could be expanded to the rights of those who are using up public resources unfairly.

Take, for example, welfare recipients who use on illegal drugs. If we can start justifying tighter restrictions on welfare eligibility, we just might save some money and encourage greater personal responsibility for our citizens.

Taxing you to protect you from cheaters

Clark County's fiscal court is looking for a new way to "protect the public."

Of course, that means a new tax on businesses. The County Attorney seems pretty excited about it.

From the Winchester Sun:

Something tells me once the county government justifies protecting citizens from fly-by-night operators by taxing the honest businesses, they will decide they can do a better job with even more money.

The next Kentucky legislator pay increase

Two fairly recent legislative pay raises in Kentucky have been a little unusual. Switching to annual sessions in 2001 simply gave lawmakers more paydays. Sweetening their pensions in 2005 has allowed a growing number of legislators to game the system by switching to jobs in the judicial or executive branches of government and receiving unearned retirement benefits.

It's time for another bite of this apple. But here is the twist: we already pay House and Senate members to sit around and do nothing the first month of election years (despite one recent effort to fix this). Why not just give them less to do? If we remove some of the heavy lifting -- which they are hesitant to do anyway -- and pay them the same, that would be like paying them more, wouldn't it? And it just might lead to better government in the state.

What I'm talking about is amending the state constitution to allow for voter-driven ballot initiatives. For things like Certificate of Need repeal, prevailing wage repeal, Right to Work, meaningful education reform, and serious pension reforms that too many politicians are too afraid to touch anyway, why don't we empower the people to work around them to get the job done?

Smacking us back to reality

Given that Kentucky just elected governor a man who campaigned on expanding "free" health insurance, it looks like some voters might be due for a pimp slap back into reality. (Hit the "pimp slap" link for a hilarious analogy, but don't miss the serious point below.)

This is the reality:

Shona Holmes (Toronto, Ontario, Canada) from BigGovHealth on Vimeo.

Hat tip to Insure Blog.

Scores Up in DC Public Schools

The Washington Post does not want to give vouchers or charter schools any credit for this, but public school scores in the Washington, DC area are up.

Whether this is real improvement or just test score manipulation such as we exposed in Kentucky’s CATS system remains to be seen. However, it certainly doesn’t refute the idea that charters and vouchers could create real pressure on public schools to make meaningful reform, either.

One Reason We Need to Be Careful About Increasing Education Spending

Page One Kentucky and several blogs have been alive for weeks about a federal investigation into grants for education research that may have been mishandled by Robert Felner, the former dean of the education school at the University of Louisville. The Feds aren’t saying a lot, but TV newscasters in Louisville and Page One Kentucky have been posting all sorts of damning evidence. Now the Courier-Journal has finally chimed in, reporting that a huge grant for $694,000 to improve the state’s performance on No Child Left Behind may have evaporated without any increased benefit to our students.

While the investigation still continues in this case, it already looks like there couldn’t have been any sort of decent audit process in place to insure tax money was being properly spent. Individuals and agencies who were named as involved with the center supposedly created by this grant in fact have never even heard of it, something a reasonable audit should reveal.

While this particular problem highlights poor accounting for federal money at the US Department of Education and at the University of Louisville, we have plenty to worry about with the way Kentucky’s education tax dollars are being monitored – or, more correctly, not being monitored – as well. More than a year and a half after its shortcomings were first exposed, the state’s MUNIS education accounting system remains a mess, so badly organized that no-one even knows the overall amount we are spending on teacher professional development. That’s important, because a lot of this “development” is conducted by contractors just like Felner was supposed to be. With MUNIS a mess, who knows if those contractors even exist, or if they actually provide the services for which we are paying? Or, if our hard-earned money is just going into some crook’s pocket?

Just last year, a local school finance person was convicted for paying a full-time “salary” to her son. The problem – the son was in jail at the time. Why did this happen? Why did that finance person think she could get away with this?

The taxpayer deserves better accounting for his or her hard earned dollars, and the school system needs to understand that the current business as usual isn’t adequate. Education has just gotten too expensive for us to be able to afford sloppy fiscal controls. When over half a million dollars that could have helped kids just evaporates, a lot of the good people involved with education need to get in the lead of demanding a system where their honesty is firmly established while the dishonest go to jail. And, when the legislature and the governor just stand by while MUNIS remains in chaos, it’s time for taxpayers to cry, “Enough!”

Phil Gramm was right

Today's political roadkill is Sen. Phil Gramm, an economic adviser to Sen. John McCain.

McCain's opponent Sen. Barack Obama is having a field day stomping on Gramm for things he didn't say and extrapolating his misquotings beyond all reason, a commonly used political tactic.

Here is Obama:

Gramm actually said:

"You've heard of mental depression; this is a mental recession," he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. "We may have a recession; we haven't had one yet."

This is undeniably true. If we actually fall into a recession, the crybabies will go into full freakout. Just look at what they are doing now, while we still have economic growth. (That means the economy is better now that it have ever been in our history, a much-ignored fact.)

Gramm is also being excoriated for saying this:

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said."

Notice that Obama has to make up the "figment of your imagination" part and that his conclusion is "it isn't whining to ask government to step in and give families some relief."

Obama's premise that the current economy is wiping out innocent families betrays the folly of his contention that many of us aren't whiners and his definition of "some relief" would be tough for our government to finance under current economic circumstances, much less if things were to really get tough.

A "cat got your tongue?" day in KY media

Kentucky's state government revenue for fiscal year ending June 30, 2008 was $8.664 billion, 1.1% higher than it was the previous year.

The big news was announced early this morning and, strangely, the state's mainstream media seems to be a little slow picking up on the news.

This substantial evidence that spending and not revenue "shortfall" is our problem would be huge news if the opposite were found to be true.

Of course, that won't change the focus on tax increases when the story finally hits the big media outlets.

In a press release that hit my email box at 8:41 am, Budget Director Mary Lassiter said "this is the lowest level of growth we’ve seen since 2002. Despite the national income tax rebate checks, our sales tax growth is being substantially eroded due to inflation, primarily in the energy and food sectors. We will need to see improved growth in many of our revenue accounts to make the FY09 budgeted revenue estimate."

Sales tax receipts for the year were up $60.1 million or 2.1%. We may want to figure out how to start spending less money in case we find ourselves with an actual decrease in revenue.

What kind of car does Jody Richards drive?

A New York Times Op-Ed contributor paints a stark picture of General Motors and lays the blame for the impending failure squarely at the feet of outlandish union pension and health care benefits.

The title of his book: “While America Aged: How Pension Debts Ruined General Motors, Stopped the N.Y.C. Subways, Bankrupted San Diego and Loom as the Next Financial Crisis.”

There is still time to keep Kentucky from becoming a sad epilogue to this train wreck, but we are off to a bad start.

Watch Georgia end special needs student abuse

Georgia public schools have been failing to provide adequate services to special needs students, so the legislature arranged to give parents vouchers to escape poorly functioning schools.

It's going like gangbusters.

And places without private schools are (ta da!) building private schools.

Kentucky Rep. Stan Lee has tried to provide the same level of service to special needs kids here, but House Education Committee Chairman Frank Rasche would have none of it.

Making the case for two Kentucky tax hikes

Since early this year, we have heard how an increase in the state tax on cigarettes would fill in revenue gaps in K-12 education and healthcare while simultaneously saving lives by creating thousands of ex-smokers.

Today, the Lexington Herald Leader adds salvation for state colleges and universities to that already unrealistic laundry list:

"The Republican-controlled Senate this election year voted for cheap cigarettes over affordable higher education when it rejected a House-passed increase in Kentucky's cigarette tax, one of the nation's lowest."

But they didn't stop there.

Then the editorial steps into the wrong side of another debate that was long ago settled by reality. Financial aid:

"Lawmakers also should look into whether KEES, the Kentucky Educational Excellence Scholarship, is the most effective way for a poor state to use revenue from its lottery.
The financial aid awarded by KEES serves to inflate tuition with no regard to the financial needs of individual students."

Kentucky's merit-based KEES program is probably the only thing keeping college affordable at all in the state. Shifting it, as they suggest, into being just another needs-based program will raise direct costs for families who save for college and likely just add more debt to many of those who qualify for the need-based aid.

Legislative Process 101

Senate President David Williams has endured some pretty bizarre attacks. He has even deserved some of them. But I can't begin to figure out what planet WHAS reporter Mark Hebert is coming from trying to blame Williams for creating the last-minute logjam in the General Assembly because he didn't sign nine passed bills until April 2.

You won't hear any of Williams political opponents try to make hay out of this because they would be laughed off the stage. The timing of Williams' signing of the nine bills had no meaning whatsoever. All the bills were already passed and could not have possibly played a role in any last-minute General Assembly strife.

If anything, this sorry episode might help make the case for creating more legislative transparency so the public is less dependent on the big media filter. If you are looking for a way to keep track of Frankfort lawmaking, you might go over to Kentucky Votes and set up a free account.

Having, eating teacher pay cake

Remember this the next time Kentucky's teachers union has a fit about a merit pay proposal for teachers.

From The Washington Times:
"We have not seen any hard evidence yet that (merit pay) improves achievement," said Daniel Kaufman, a spokesman for the Maryland State Teachers Association.

While educrats are notoriously difficult to convince that paying more effective teachers more money encourages them to keep up the good work, they cling hard to the idea that paying bad teachers based on seniority works just great. And they do that with no evidence at all to back up their beliefs.

What Tests Do College Presidents and Public School Principals Like?

Some interesting comments were made in yesterday’s Elementary and Secondary Education Subcommittee meeting in Frankfort.

Dr. Wayne Andrews, the president of Morehead State University, discussed the inadequate preparation of many Morehead freshmen. He said about 40 percent of each new class requires remediation in at least one subject, usually math.

To combat this problem, Morehead started a cooperative program with public schools called the College Algebra Program. What is particularly interesting is the way Morehead measures the success of students that complete it. Morehead isn’t using the state’s CATS for this. Instead, they use the ACT college entrance test.

Other comments came from Tim Bobrowski, principal of Sebastian Middle School in Breathitt County. Bobrowski is very favorably impressed with the EXPLORE test, also created by ACT, Incorporated. He pointed out that EXPLORE shows kids where they stand in eighth grade, soon enough to give students a chance to repair some of their deficiencies.

Why is this interesting? During and after the debate on Senate Bill 1 from this year’s regular session, a rather concerted attack on these ACT created tests was launched by a group the Paducah Sun has dubbed the “KERA Amen Chorus.” The misguided crowd in the “Chorus” issued several papers attacking the validity of the ACT’s tests for eighth and tenth graders while taking swipes at the ACT college entrance test, as well. Among other things, it looks like the “Chorus” covets the money spent on these ACT tests and would prefer us to dump all of that cash into their beloved, though already bloated, CATS assessments, instead.

What was reiterated yesterday is that many don’t sing along with the “Chorus.” At least one practicing public school educator does not agree. At least one college in the state knows where to go when it needs to evaluate math preparation for college, as well, and that isn’t to the state’s home-grown CATS assessment, either. And, since school principals and college presidents are on the leading edge of dealing with the real issues in KERA, we probably need to give those folks more credence in preference to a group of ideologues who just seem to be singing off-tune.

Four day school week? Try zero

Gas prices have spurred a lot of talk about knocking one day off each school week to cut transportation costs twenty percent. And that could be a great idea.

We might also further incentivize independent learning by following the example of East Jessamine High School in Nicholasville. The school allows students who have mastered a subject on their own to test out of classes, with credit and without attending a day of classes.

Expanding that idea might advance student achievement goals as well as cutting costs.

Kentucky's new game of leapfrog

The House Democrats' jump onto the electric car bandwagon after Senate Republicans' prior announcement is oddly reminiscent of Gov. Steve Beshear playing catch-up last month with Secretary of State Trey Grayson's spending transparency initiative.

Now if we could get them to try to get to step into the huddle on pension reform instead of doing an endzone dance on the fifty yard line, the competition in this marketplace of ideas would really get us someplace.

Have you paid your Google tax yet?

The folks at Governing Magazine did a Google search of the word "Louisville" this morning and were surprised to see the city's official site listed fifth, behind four other non-governmental sites.

Great.

Some Kentucky government entities apparently hadn't thought to spend your time and money to outrank you and your fellow citizens' websites on Google. Well, expect that to change soon enough. And for the sites that already dominate the search engine, you have been Google taxed previously.

Assuming the moon is made of cheese

There is a not-so-funny joke economists tell about being stuck on a deserted island with a bunch of canned foods and deciding that starvation would be averted by "assuming a can opener."

It's also not very funny to see a House actuary try to calm widespread fears about the insufficiency of HB 1 by saying:

"Additional steps need to be taken. The state must stick to the funding schedule contained in HB 1. Health care costs need to be further contained. Maximum investment returns are required from the $30 billion in assets that are in trust to pay future benefits. But do not underestimate the value of the design changes made by last month's reform. I've seen the numbers."

That is the actuarial equivalent of pulling a rabbit out of hat or making a can opener magically appear on a deserted island. It's either a common deception or an very, very unlikely event.

The numbers on HB 1 are fine. But the assumptions are from outer space.

This is our next House Budget Chairman?

Kentucky's House Budget Chairman Harry Moberly may survive the upcoming shakeup in House leadership, but insiders suggest that eventually he will be replaced by Rep. Don Pasley.

Given the ignorance Pasley displayed in his latest Winchester Sun column, though, that change won't necessarily be an upgrade. Speaking about the General Assembly's special session and passage of HB 1, Pasley seems squarely in the middle of the "we solved the problem" camp Gov. Steve Beshear edged away from this past week.

Pasley makes the most of a vague term to make a case for the efficacy of HB 1, stating it would "get the unfunded liability in check by the year 2025." If by getting it "in check" he means for the $27 billion hole to grow much larger, then I guess he is right. But his constituents surely won't take it that way.

Pasley also repeated the canard that HB 1 will save the locals $56 million.

"Finally, this law does have one added bonus for our local governments and school boards: It will save them nearly $56 million over the next year because of a one-time reduction in their contribution rate. This was made possible because of their system’s better funding levels."

This is exactly the same as saying the state government has "saved" $27 billion by underfunding its benefits plans all these years. The local governments aren't being saved a penny. They are merely deferring $56 million in required contributions which will be no easier to make next year than they would be this year. So they may need to get deferred again. That's how we got in this mess in the first place.

Feeding the politicians

Remember how Gov. Steve Beshear campaigned on providing health insurance for all the people? Now that Sen. Barack Obama is doing the same thing, it may be helpful to take a look at how their brethren in Canada are arguing with each other about buttering toast in hospitals.

Brian Lee Crowley (Halifax, Novia Scotia, Canada) from BigGovHealth on Vimeo.

Don't just sit there, fix horse racing!

Open up your checkbooks.

Horse racing is in big trouble and Steve Beshear is promising bold government intervention. That can only mean one thing. He needs more of your money to "repair" a "market failure."

"Kentucky's signature industry is in crisis and immediate, aggressive action is necessary to preserve its integrity," said Gov. Beshear. "The actions I have taken today reflect my continued commitment to strengthening horse racing in the Commonwealth."

Do you think Gov. Beshear is spreading himself a little thin by lowering gas prices and healing all that ails horse racing in the same week?

Independence Day Commentary from Jim Waters

All right, people! Stand at attention and listen to Jim Waters’ stirring commentary on the real meaning of Independence Day.

Take a lesson from the left coast

California has overspent itself into a $15 billion 2008-09 budget mess.

We should watch them closely and then remember the next time the economy is moving along briskly in Kentucky that the good times don't always last.

And then spend accordingly.

Fouling the journalistic food chain

Local and state reporters often depend on national media sources for insight into how the rest of America views Kentucky. One well-established practice is treating the word of some of those sources as gospel.

Stateline.org is one of those sources.

Kentucky reporters looking for national reaction to the our 2008 General Assembly may want to be careful with Stateline's latest state-by-state legislative review.

The headline of this piece and the last two paragraphs bear little resemblance to reality. The only "rescuing" going on in last week's special session was of Gov. Steve Beshear's flagging political fortunes. Even he is starting to admit there is much more to do even as he takes a post-special session victory lap around the state. It is interesting no one has contradicted anything Sen. Tom Buford said in his floor speech explaining his "no" vote on HB 1, the only such vote in either chamber.

The statement the bill worked out "a timetable to fully fund the retirement system by 2025" is misleading as well, as the timetable would only fully fund the annual increase in liability in the year 2025. Not the whole thing. Under even the best of circumstances, the retirement system as impacted by HB 1 will be less fully funded in 2025 than it is now.

Further, the statement that the system "is under-funded because previous legislatures did not put enough money into it every year" ignores the part of the story that would truly allow reform to yield victory. If the writer is going to inject that much analysis into a "news" story, why not address the evolution in recent years toward a system of worker benefits the state can't come close to affording? It's like saying the reason all Kentuckians don't drive around in Rolls Royces is that we don't spend enough money on cars.

The lesson that has to be learned before anyone interested in the fiscal health of the state can claim victory is that we can't spend what we don't have. The Stateline article does nothing to move us toward that realization.

If Real Inflation Rates Are Not High Enough, Invent Your Own

Comments on page 46 in the new Kentucky Progress Report from the Southern Regional Education Board (SREB) caught my attention. The SREB says of Kentucky, “Total funding per full-time-equivalent student increased by $2,894 (25 percent), from $11,731 to $14,625. When adjusted for inflation at 4 percent per year, Kentucky’s per full-time-equivalent student funding fell by $377 (3 percent). Kentucky’s funding increases for four-year institutions lost ground to enrollment growth and inflation from 2001 to 2007.”

The claim just didn’t look right. Using the really neat Consumer Price Index Inflation Calculator from the US Census Bureau’s Web site, it turns out that $11,731 in 2001 dollars would be worth only $13,734.21 in 2007, not $14,625. Thus, if per FTE student funding in 2007 was actually $14,625, then there was a real funding increase of $891 in 2007 dollars, an increase of 6.5%.

So, how did the SREB turn a positive number into a negative one? They used a specially concocted inflation index from a crowd called the Common Fund Institute. That index only looks at changes in college costs; thus, a real increase in spending based on the universally accepted Consumer Price Index is turned into a drop in spending. At least, that is what the education crowd wants you to think.

Were we to fall for this sort of logic, the rapid rise in college costs would never be stemmed. I’m sure the college crowd loves to hide their bloated cost structure behind their own idea of an inflation calculation, but the facts are that Kentucky’s spending in real dollars have gone up, not down despite real inflation. Anyone who says otherwise is just trying to manipulate the poor taxpayer.

Pork for pork!

Gov. Steve Beshear actually sent out a press release announcing that he gave $412,500 in Master Settlement Agreement money to a company in Kuttawa, KY to build a pork processing facility.

MSA money is supposed to be used to pay health expenses related to smoking.

It's fitting, though, because after the government runs tobacco producers out of business they will probably go after fatty foods like pork next.

A photo-op, my kingdom for a photo-op

Gov. Steve Beshear is having so much fun going around proclaiming a new age in Frankfort after last week's pension "reform," he is expanding into gas price investigations.

Woo-hoo!

Beshear changes tune on pensions

Does this count as a government cut?

Gov. Steve Beshear trimmed back some of his earlier pension rhetoric yesterday while speaking in Ashland. Having said last Friday "we have taken a giant step toward placing our pension systems on a sound financial basis," Beshear shifted significantly downward to yesterday claim HB 1 "will slow down the rate of growth in the state’s unfunded pension liability, which currently stands at about $27 billion."

That is still likely a bit optimistic, but Beshear seems to be moving in the direction of a clearer picture of how little the legislative effort has actually changed.

I guess it is too much to expect Beshear to call a press conference and say "we spent $300,000 on a photo-op and to set goals for future legislatures that they will ignore. Vote for us!" But even just a little bit more honesty from Beshear on this reflects some enhanced understanding that wasn't there just a few days ago.

AP’s Education Survey Shows You Are Not Impressed

A new survey from the Associated Press shows Americans are not buying a lot of the propaganda being passed around about our schools. I briefly mentioned this poll last week. but the referenced news article only mentioned mathematics.

You get that issue – math is important, and the schools don’t teach it well. By a ratio of almost two to one you think that math, not English (which would include writing in this survey) gets insufficient coverage in our schools.

In fact, a huge 77 percent of you think that the schools place emphasis on the wrong subjects. This, of course, goes to the heart of the argument over the enormous amount of time Kentucky spends on writing. Writing is important, but not if we sacrifice coverage of other subjects.

Anyway, I have now located the full poll on line, and you see through a lot more than the math issue. Here are a few highlights:

Education remains a major concern – A whopping 79 percent of you say it is very important or even extremely important. If education was doing its job, I don’t think so many of you would feel this way.

Preparing Students for College – Only about half think we do a good job. In fact, the ratio that thinks we don’t do well is almost equal to the percentage of students entering Kentucky’s public colleges with inadequate preparation. It looks like families talk when an offspring gets hit with extra bills for remedial college courses.

Preparing for the World of Work – A clear majority say we do no better than a fair job.

Measurement Accuracy of Standardized Tests – Only seven percent of you think these tests work very well. So much for confidence in CATS.

Student Discipline – A whopping 90 percent say this is a somewhat to very serious problem.

Low Expectations – A huge 88 percent of you indicate this is a somewhat to very serious problem. Despite all the noise we hear from schools, apparently a lot of teachers still doom kids through the bigotry of low expectations, and you know it.

World Comparisons – Eighty-eight percent of you know that we lag the rest of the world on math and science tests. Just four percent of you think we are catching up.

Worldwide Graduation Rates – The US does no better than the middle of the pack in the overwhelming opinion of 85 percent of you.

There is a lot more in this survey, but I’ll let you check that out for yourself. Of course, opinions in Kentucky might vary from the national averages, but when such overwhelming numbers are involved, I seriously doubt that any of the results would change enough to show we are doing much better here than elsewhere around the country.