Jim Waters: State Senate Fought For Real Spending Cuts.
State Senate fought for real spending cuts
By Jim Waters
At issue | March 23 Herald-Leader editorial, "Medicaid fix in Senate's court; House produces bipartisan accord"
The editorial offers a stark case of selective memory concerning the budget stalemate during the special legislative session.
It states that Gov. Steve Beshear cut more than $1 billion in executive-branch spending during his administration. Therefore, the reasoning goes, Kentuckians should trust him to achieve the savings he promised via a "managed care" approach to Medicaid.
But "savings" deserves a closer look. It holds different meanings for different people.
For example, projected savings does not mean realized savings.
After all, a big difference exists between cutting spending from a proposed budget and actually spending less money. Proposed cuts offer spinmeisters the political benefit of appearing fiscally prudent. Actual cutting results in pain — and possibly lost votes — stemming from making tough decisions.
But that's why we pay elected officials like Beshear the big bucks. Isn't it?
Legislative Research Commission data make it clear the Herald-Leader became confused about the real meaning of "savings."
Numbers provided by the LRC indicate total state spending in fiscal year 2010 — including federal, general, road and restricted funds — was $24.7 billion. That is a 5.3 percent increase over the previous fiscal year.
And that increase occurred while revenues fell by 4.2 percent, resulting in a nearly 10 percent swing between spending and available revenues.
Reasonable Kentuckians would not consider such a gap between spending and income responsible stewardship. In fact, how long could Kentucky families increase their budgets by 5 percent per year while taking 4-percent pay cuts without getting into trouble?
Of course, Beshear gets an option that Kentucky families don't — "stimulus" money from the federal government.
Kentucky received nearly $2 billion in American Recovery and Reinvestment Act money since 2009.
Without it, the commonwealth would have been staring at $800 million shortfalls, on average, each year between what was budgeted and the amount of money available.
Also, some very worthy programs would have suffered much larger reductions than the fairly small 1.74 percent across-the-board cuts proposed by the state Senate — just for the 2012 budget year — to handle the current Medicaid deficit.
More selective memory: The editorial states that a compromise reached between House Democratic and Republican leaders earlier — one that again delays cuts until later in this election cycle — received "an overwhelming display of bipartisan support."
Remember this: Although the final Senate plan did not receive Democratic support, Democrats on the Senate Appropriations and Revenue Committee did vote for the original plan to cut spending next year by 2.26 percent. Some in the minority even spoke strongly in favor of it.
That proposal would have ensured that money borrowed from next year's Medicaid budget would be put back in the Medicaid checkbook before the bill comes due. More important, the original bill resembled what Kentucky families have to do when household income declines: cut spending.
Families prioritize spending by cutting the cable television, the extra cell phone line or even the newspaper subscription, if necessary. Sometimes they do it with plans to restore those when finances improve. Sometimes they discover better ways to use the money.
The editorial embellishes the competence of leadership from Beshear, including how he said that any cuts to education would be a "deal breaker." Yet, it mentions nothing about the $775 million sitting in local school district "rainy day" contingencies — 49 percent more now than in 2005.
Inquiring Kentucky minds want to know: How much would a $23-million reduction in K-12 education funding, as proposed by the Senate, really affect classrooms and teachers in a bloated, administratively heavy system that Bluegrass Institute research shows offers the worst teaching-to-non-teaching personnel ratio in the nation?
Inquiring Kentucky minds also want to know: If the governor can't cut $125 million from this year's Medicaid budget — which he promised but failed to accomplish —what evidence exists suggesting he can find an even greater amount of savings needed to balance next year's Medicaid budget?
In the past, fiscal conservatives in Frankfort — concerned about being labeled "obstructionists" by the big-government, entitlement-driven crowd — too willingly have surrendered in the spirit of compromise.
They should stop waving the white flag and fight for responsible spending cuts — now.
Jim Waters is vice president of policy and communications for the Bluegrass Institute. Reach him at jwaters@freedomkentucky.com.
Read more: http://www.kentucky.com/2011/04/04/1695823/state-senate-fought-for-real-spending.html#ixzz1IZ4iX5V9
By Jim Waters
At issue | March 23 Herald-Leader editorial, "Medicaid fix in Senate's court; House produces bipartisan accord"
The editorial offers a stark case of selective memory concerning the budget stalemate during the special legislative session.
It states that Gov. Steve Beshear cut more than $1 billion in executive-branch spending during his administration. Therefore, the reasoning goes, Kentuckians should trust him to achieve the savings he promised via a "managed care" approach to Medicaid.
But "savings" deserves a closer look. It holds different meanings for different people.
For example, projected savings does not mean realized savings.
After all, a big difference exists between cutting spending from a proposed budget and actually spending less money. Proposed cuts offer spinmeisters the political benefit of appearing fiscally prudent. Actual cutting results in pain — and possibly lost votes — stemming from making tough decisions.
But that's why we pay elected officials like Beshear the big bucks. Isn't it?
Legislative Research Commission data make it clear the Herald-Leader became confused about the real meaning of "savings."
Numbers provided by the LRC indicate total state spending in fiscal year 2010 — including federal, general, road and restricted funds — was $24.7 billion. That is a 5.3 percent increase over the previous fiscal year.
And that increase occurred while revenues fell by 4.2 percent, resulting in a nearly 10 percent swing between spending and available revenues.
Reasonable Kentuckians would not consider such a gap between spending and income responsible stewardship. In fact, how long could Kentucky families increase their budgets by 5 percent per year while taking 4-percent pay cuts without getting into trouble?
Of course, Beshear gets an option that Kentucky families don't — "stimulus" money from the federal government.
Kentucky received nearly $2 billion in American Recovery and Reinvestment Act money since 2009.
Without it, the commonwealth would have been staring at $800 million shortfalls, on average, each year between what was budgeted and the amount of money available.
Also, some very worthy programs would have suffered much larger reductions than the fairly small 1.74 percent across-the-board cuts proposed by the state Senate — just for the 2012 budget year — to handle the current Medicaid deficit.
More selective memory: The editorial states that a compromise reached between House Democratic and Republican leaders earlier — one that again delays cuts until later in this election cycle — received "an overwhelming display of bipartisan support."
Remember this: Although the final Senate plan did not receive Democratic support, Democrats on the Senate Appropriations and Revenue Committee did vote for the original plan to cut spending next year by 2.26 percent. Some in the minority even spoke strongly in favor of it.
That proposal would have ensured that money borrowed from next year's Medicaid budget would be put back in the Medicaid checkbook before the bill comes due. More important, the original bill resembled what Kentucky families have to do when household income declines: cut spending.
Families prioritize spending by cutting the cable television, the extra cell phone line or even the newspaper subscription, if necessary. Sometimes they do it with plans to restore those when finances improve. Sometimes they discover better ways to use the money.
The editorial embellishes the competence of leadership from Beshear, including how he said that any cuts to education would be a "deal breaker." Yet, it mentions nothing about the $775 million sitting in local school district "rainy day" contingencies — 49 percent more now than in 2005.
Inquiring Kentucky minds want to know: How much would a $23-million reduction in K-12 education funding, as proposed by the Senate, really affect classrooms and teachers in a bloated, administratively heavy system that Bluegrass Institute research shows offers the worst teaching-to-non-teaching personnel ratio in the nation?
Inquiring Kentucky minds also want to know: If the governor can't cut $125 million from this year's Medicaid budget — which he promised but failed to accomplish —what evidence exists suggesting he can find an even greater amount of savings needed to balance next year's Medicaid budget?
In the past, fiscal conservatives in Frankfort — concerned about being labeled "obstructionists" by the big-government, entitlement-driven crowd — too willingly have surrendered in the spirit of compromise.
They should stop waving the white flag and fight for responsible spending cuts — now.
Jim Waters is vice president of policy and communications for the Bluegrass Institute. Reach him at jwaters@freedomkentucky.com.
Read more: http://www.kentucky.com/2011/04/04/1695823/state-senate-fought-for-real-spending.html#ixzz1IZ4iX5V9
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