The Richmond Register

October 22, 2012

Political frolicking won’t fill state’s debt sinkhole

By Jim Waters
Bluegrass Institute

— This is the season political junkies live for. Presidential elections, with all of their twists and turns, polls and prognostications, are what partisans crave.

The most recent debate between Gov. Romney and President Obama was – if little else – great political theater. I must admit, it was fun – at least for a moment.  

But most Americans are not enjoying their current economic lives.

Around 23 million are struggling to find employment. Gas prices are off the charts. And with the looming implementation of the federal health care reform known as Obamacare – our tax burden is getting ready to be heavier than a bag of Fort Knox gold.

Actually, while it’s bad out there across the nation, it’s even worse here in the commonwealth.

The current visionless gubernatorial administration wants to manufacture its own legacy: we didn’t have any money, but we kept the ship of state afloat. Its supporters think we should show more gratitude for our benevolent leaders in Frankfort – especially Gov. Beshear, as if he were our grand Government Papa – that saw the commonwealth through these dark days.

The economic evidence is scant, at best, for such a legacy narrative. Even as the national unemployment rate dropped a bit to 7.8 percent, Kentucky’s has actually increased in some recent months and now stands at 8.4 percent. Many counties have more than 13 percent of their workforce unemployed.

During that period, more than 700 jobs in the state’s health-care industry alone disappeared – faster than debate moderator CNN’s Candy Crowley could tell Gov. Romney to “sit down.”

A primary reason those jobs no longer exist is because of the pressures brought to bear by Obamacare, which is forcing down reimbursement rates to health care providers.

It was hoped that such policies would drive down health care costs for individual Kentuckians. So far, the federal health care reform has succeeded only in putting hundreds more Kentuckians out of work as providers adjust to the lower rates for their services by cutting positions.

But the problems are not limited to the health care sector. Hundreds of manufacturing and professional services jobs also were lost just during that stretch.

Yet – and here’s where most Kentuckians should be scratching their heads – during that same period, when hundreds of good jobs in the private sector disappeared, the government sector added 800 jobs.

So, while thousands of coal miners, manufacturers and health-care workers stand in unemployment lines, government employment is growing – adding positions with their costly perks and benefits, at the expense of the already completely overwhelmed taxpayers.

If you think Frankfort is teeming with hard work these days about how to solve these problems, think again.

The governor is out distributing hundreds of thousands of road-fund dollars in districts where some of his get-along, go-along incumbent political pals are in tough re-election fights.

I’m sure it’s much more fun for the governor to give away your tax dollars to help save the political skins of his comrades than it is to, say, fix the state’s faltering Medicaid program or deal with the commonwealth’s bloated debt.

In fact, a new Institute for Truth in Accounting report ranks Kentucky near the very bottom (No. 46) with regards to state debt and taxpayer burden.

“This state’s bills greatly exceed its assets,” the report declared.  

Guess who pays? According to the ITA report, which labels Kentucky a “sinkhole” state, the burden for this debt adds up to $23,500 for every single Kentucky taxpayer.

So, enjoy the flurry and hoopla of the political season while you can.

Kentucky’s sinkhole remains.  

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