(OpEd By Jim Waters, who 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 email@example.com and @bipps on Twitter.)
What’s in Santa’s bag for Kentucky this Christmas?
Will he even want to stop and fill up his sleigh here, considering powerful forces in business, government and politics are colluding to push through a whopping increase in the gas tax that will disproportionately affect working and lower-income Kentucky families?
Northern Kentucky Chamber of Commerce President Brent Cooper’s comment to WCPO-TV recently that “nobody would’ve noticed” a 10-cent increase in Kentucky’s gas tax seems like an out-of-touch comment, especially during the challenging economic circumstances many are facing during the coronavirus pandemic.
Raising the tax by a dime on each gallon of gas would result in more than an additional $150 coming out of the pockets of working Kentuckians who fill up twice weekly over the next year.
That would fill many working families’ car trunks with bags full of groceries and get them through another week of the current craziness.
Those driving the tax-hike truck claim more fuel-efficient vehicles combined with a drop in fuel prices have reduced the amount of tax revenue in Kentucky’s road fund.
Therefore, they argue, the dollars needed to build new roads and bridges and repair existing ones just aren’t there.
Missing from their narrative is the fact that Frankfort plucks millions each year – including $113 million last year alone – from that fund to spend on unrelated programs.
Plus, the big-business and big-government groups colluding to raise the gas tax on hard-working Kentuckians seem to have little interest in addressing the waste generated by the Kentucky Transportation Cabinet’s (KYTC) single-bid practices.
Bluegrass Institute Visiting Policy Fellow Andrew McNeill reports the KYTC in November awarded more than $14 million worth of contracts which had no competition and exceeded the estimates of the KYTC’s own engineer.
The month’s largest single-bid contract of $10.5 million to repave 11 miles of Interstate 75 in Whitley County was more than $600,000 above the cabinet’s internal estimate.
McNeill says it’s just one of many examples of “a bureaucracy seemingly incapable of efficiently using the current resources at their disposal.”
Transportation Secretary Jim Gray with his business background has a real opportunity to apply private-sector practices and make the cabinet more efficient – beginning with a full audit of its bidding practices.
Such a review could provide taxpayers with more information about why, for instance, Kentucky spends $1 million per interstate mile of concrete repairs.
Another item that should be on every Kentucky taxpayer’s Christmas list is a new retirement plan for future teachers, which will begin to address Kentucky’s huge unfunded pension liabilities while ensuring those who teach our children receive adequate benefits in their twilight years.
Apparently, Santa’s doing his best to find that gift as the Interim Joint Committee on State Government heard testimony regarding a proposal to create a new plan for new teachers that provides them with a safe retirement income yet with the portability that better fits a modern workforce and will be preferred by younger teachers while also protecting taxpayers from shouldering the full risk and burden of the system’s liability.
Despite record amounts of funding in recent state budgets, the Teachers’ Retirement System’s (TRS) negative cash flow was more than $600 million during the past two years, while the system’s level remains under 60% funded, meaning it doesn’t currently have the assets to cover more than 40% of its obligations to beneficiaries.
This new approach, if passed, will stabilize the pension plan, offer incoming teachers a generous retirement plan and protect taxpayers from having to dig out of a deeper pension hole in the future.
Kentucky should give taxpayers the gift of increased fiscal responsibility by reigning in multi-million dollar single-bid transportation contracts and stabilizing the teachers’ pension system.
Just the prospect of those measures alone makes for a much merrier Christmas indeed.