Steve Beshear managed in tough times
State has had economic, political hardships
Written by Tom Loftus
FRANKFORT, KY. — This is one in a series of stories about Kentucky’s statewide races for offices on the Nov. 8 ballot. A profile of Senate President David Williams, the Republican nominee for governor, appeared last Sunday.
After an unlikely and somewhat unexpected return to politics, Steve Beshear achieved a long-held goal when he was inaugurated as governor in December 2007 — but under circumstances that clouded his chances for success.
On the economic front, state revenues were plunging, as the nation slipped into the worst recession of modern times.
On the political front, things looked no better for the new Democratic governor. Anything he proposed — including his main campaign promise to legalize expanded gambling — would have to pass a state Senate in the firm grip of Republican David Williams.
Still, on the unseasonably warm afternoon of his swearing-in on Dec. 11, 2007, Beshear spoke of “progress,” and declared, “The status quo is unacceptable to me.”
Today, as Beshear seeks a second term against Williams, the GOP nominee, and independent Gatewood Galbraith in the Nov. 8 election, his critics claim that maintaining the status quo is exactly what he did.
Expanded gambling, the issue that surely would have changed the status quo and which more than any other propelled his political resurgence, has failed to gain traction.
And his current campaign is not so much claiming progress — which would be a hard sell given that unemployment has risen to 9.7 percent from 5.6 percent when he took office — as it is success in managing the economic crisis without resorting to draconian actions taken by many states.
“We’ve kept our budget balanced without having any broad-based tax increases, and at the same time we’ve maintained what I’ve felt are our most important priorities — education, public protection, job creation and health care for our most vulnerable,” the governor said in a recent interview.
His Republican critics, however, say Beshear has failed to deliver the bold leadership he promised.
“Steve Beshear has done an adequate job as governor. But Kentucky needs much more than adequate,” said John David Dyche, a Louisville attorney and freelance contributor to The Courier-Journal’s op-ed page. “His biggest failing is that he has no agenda on the many important issues that confront Kentucky today.”
Beshear’s campaign website and advertising tout his record of the past four years — balancing the budget, an ethical government, and the creation of jobs. But there is little hint of plans for the next four years, and Williams’ allies in the Senate Republican caucus say that’s because the future looks gloomy. Moody’s downgraded Kentucky’s bond rating in the spring because of the state’s large debt, badly underfunded pension program and use of one-time revenues to pay recurring expenses.
“Gov. Beshear is running a very good political campaign,” said Senate Republican Leader Robert Stivers of Manchester. “He’s stayed away from the controversial issues because they are a major hornet’s nest.”
Beshear’s message to voters is much more upbeat. In a television ad, he promises, “There is light at the end of the tunnel because we’ve made the tough decisions to position Kentucky for a better future.”
That message seems to be working as polls suggest Beshear holds a comfortable lead in what could be the last election in a long, two-phase political career.
Young man on the move
Beshear is one of five children raised by Russell and Mary Elizabeth Beshear in the small Hopkins County town of Dawson Springs. Russell Beshear was a funeral director, Baptist minister and mayor.
His son was valedictorian of his tiny class at Dawson Springs High School, then student government president at the University of Kentucky.
After graduating from the UK law school in 1968, he married Jane Klingner of Lexington and worked for a law firm in New York City.
The Beshears returned to Lexington in 1971, and two years later he won his first race for public office when he was elected to represent the 76th District in the Kentucky House. He was twice re-elected to the House, and then won elections in 1979 as attorney general and in 1983 as lieutenant governor.
That chain of electoral victories was broken in 1987 when Beshear finished third for the Democratic nomination for governor won by Wallace Wilkinson.
Out of the public arena, Beshear became head of the Lexington office of the Stites & Harbison law firm, and he helped it get the highly lucrative accounts of the state-managed Kentucky Central Life Insurance Co. He and his wife bought a small farm and built a home in Clark County near the Fayette County line.
He was lured by party leaders to challenge Republican U.S. Sen. Mitch McConnell in 1996, but McConnell won easily with 56 percent of the vote.
Fading from the political scene a second time, Beshear continued his law practice and did some lobbying for the payday lending industry in 1997 and 1998.
But he was drawn back to politics in 2007 when no obvious frontrunning Democrat emerged to take on Republican incumbent Ernie Fletcher, who’d been politically crippled by a scandal over alleged political hiring of merit employees.
“Fate has an intriguing way of altering life,” Beshear said, as he announced his return to electoral politics.
He said his election losses had “made me a better man” by giving him time to spend with his family and develop a successful law practice.
With his sons grown and his family financially secure, Beshear told The Courier-Journal in 2007 that he returned to politics because his parents “always taught us that we ought to leave this world a little better off than we found it.”
Running on a promise to bring expanded gambling to Kentucky as a way of easing the state’s financial troubles and helping its signature industry of horse racing and breeding, he emerged as winner among four major contenders in the Democratic primary. And in the general election, he swamped Fletcher, capturing 59 percent of the vote.
But in the two decades he was out of politics, Frankfort had changed.
“Any new governor faces a learning curve, and it is always steeper than they expect,” said House Speaker Greg Stumbo, D-Prestonsburg. “Gov. Beshear had a distinguished career in Frankfort, but in the years he was gone the General Assembly had grown more independent, and he was going to have to deal with a lot of people he didn’t know yet.”
Confronted with a revenue crisis that was worse than he expected, Beshear was late in proposing to the 2008 legislature a constitutional amendment asking voters to approve some casinos and casino gambling at racetracks. It was never even called for a vote in the House, which his party controlled.
In 2009, during a special session, a bill to legalize slot machines at racetracks passed the House narrowly but was defeated in the GOP-controlled Senate budget committee.
Last year Beshear premised his budget on revenues that would be gained from passing a bill to legalize slots at the tracks. But by then, both chambers ignored it.
Beshear has a simple explanation for why his paramount promise of 2007 was unfulfilled.
“Because of Sen. Williams. Pure and simple,” Beshear said. “Unfortunately he has an ironclad control of his Senate majority. … And, so far at least, he’s taken the position that he’s not going to let anything about expanded gaming pass the Senate.”
Rob Wilkey, former House Democratic whip, agrees that a major reason the amendment didn’t get a vote in the House in 2008 is that members did not want to vote on a controversial bill they expected to be killed in the Senate. But Wilkey said there also were other reasons.
“The governor may have read his election results as a mandate for expanded gaming, but the House saw it more as a repudiation of the former occupant of the governor’s office,” Wilkey, a Scottsville attorney, recalled. “Getting that amendment passed in 2008 would have been a heavy lift under the best of circumstances.”
Wilkey said it took time to get agreement among supporters on details of the measure. And, he said, Beshear had not yet established a relationship with House Democrats.
Beshear said he hasn’t given up. Though his ads and website don’t mention the issue, he said he plans “to get that issue addressed in the 2012 General Assembly.”
As for the details of the proposal and whether it will be an amendment for voters or a bill for slots at race tracks, he said, “We’re still working on the issue.”
Beshear and his supporters emphasize that Kentucky — unlike many states — made it through the past four years without a broad-based tax increase and without a cut in base funding of public schools.
“The economic circumstances he’s had to deal with were much worse than anything we could have possibly imagined and much worse than any other governor in recent times has had to deal with,” said Paul Patton, the Democratic governor from 1995-2003. “And Steve Beshear has dealt with that while somehow protecting important things like education and public safety.”
That, however, was made possible largely by $3 billion in federal stimulus dollars that came Kentucky’s way.
Also, while broad-based taxes were not increased, Beshear and Williams did work together in 2009 to persuade most lawmakers to cast the most difficult vote of the past four years — for a bill that raised crucial revenue by doubling the per-pack cigarette tax, to 60 cents, and applying the 6 percent sales tax to store sales of alcoholic beverages.
And Beshear and the legislature did make tough spending cuts. Most state agencies have been cut 25-30 percent from their original appropriations in 2008.
The number of state employees, according to the Personnel Cabinet, has fallen from the 35,655 when Beshear took office to 33,412 currently.
Funding cuts of about 10 percent have been imposed on state universities, where tuition continues to rise. Tuition and fees for an in-state student this semester at University of Louisville total $4,465, compared to $3,435 four years ago.
And while base funding for public education has held about even, funding of key support programs — including extra help for students who fall behind and professional development for teachers — has been slashed.
“I’m concerned because, while the governor and General Assembly have done their best to protect the base, these key support systems have eroded,” said Stu Silberman, executive director of the Prichard Committee for Academic Excellence.
Sen. Bob Leeper, the Paducah independent who is chairman of the Senate budget committee, said the financial crisis was also partly managed by putting the problem off to the next budget.
Leeper, citing research by his staff, said last week the state faces a $337 million deficit next fiscal year.
“Some actions of the governor made it less painful the last two years by making it more painful in the next two,” Leeper said. “So unless there’s some big improvement in the national economy, I don’t think we’re going to have money for increases in the next budget.”
Then there’s Medicaid. Beshear accounted for a $139 million shortage of Medicaid funds in last fiscal year’s budget by taking the money from this year’s budget. In a plan he and Stumbo pushed into law over Williams’ opposition, the resulting hole in this year’s budget would be filled by savings from handing the management of care under Medicaid to private contractors.
But the administration delayed the launch of the program from Oct. 1 until Nov. 1. And critics such as Leeper and Stivers are worried that the delay and other possible difficulties will mean the plan will not achieve its promised savings.
But Beshear has not retreated from his promise of Medicaid savings. He accentuates a positive budget development — resumed revenue growth last year that allowed a deposit of $122 million in the state’s Rainy Day Fund.
Beshear and the General Assembly did agree during a 2008 special session to changes in the state’s woefully underfunded pension system, including reduced benefits to future employees and the adoption of a schedule of increased payments by the state into retirement system trust fund.
Williams says the unfunded liability of the Kentucky Retirement Systems is still growing and more must be done. But Beshear has said he’s satisfied the fund will be sound if lawmakers honor the schedule of increased payments to the fund outlined in the 2008 law.
Despite the financial problems he has confronted, Beshear did fulfill a campaign promise by reducing barriers to the Kentucky Children’s Health Insurance program, a move that led to 52,000 more children getting coverage. And he started a program in Eastern Kentucky to train more dentists in pediatric dental care.
“He deserves gold stars for improving health care access for kids,” said Terry Brooks, executive director of Kentucky Youth Advocates.
But the bill Beshear’s campaign touts most is a 2009 measure that revamped and expanded incentives the state can offer to companies that create jobs.
“We’ve had great success in the toughest of economic times with our job creation programs. We revised all of our incentive programs,” he said. “We gave ourself the ability for the first time in Kentucky to work with existing businesses and help them grow and expand.”
News reports this fall have challenged Beshear’s claim of creating about 19,500 jobs, noting that many of the jobs do not yet exist. Beshear said the claim is not misleading because it will take many of the companies a year or two to build new facilities and hire the workers.
The biggest job-creation success for Beshear has been a series of announcements by Ford that total $1.2 billion in investments and plans for 3,100 jobs at the Louisville Assembly Plant by the end of next year.
One deal that was controversial was a state incentive package of up to $43 million for a Bible-themed amusement park in Grant County.
The state subsidy for the Ark Encounters project, expected to completed in 2014, has been criticized as a violation of the constitutional requirement of separation of church and state.
But Beshear told The Courier-Journal editorial board last year, “The law doesn’t allow us to look at the theme that somebody proposes for a theme park and say, ‘Well, some people may not like that.’ ”
He said he considered it an economic development project that could create 900 jobs, and — like other projects — will not get any incentives unless it produces the jobs.
The traditional Democratic constituency most disappointed in Beshear is no doubt the environmental community.
A year ago the Beshear administration joined a lawsuit brought by the Kentucky Coal Association against the U.S. Environmental Protection Agency’s enforcement of water pollution laws.
And early this year, in his State of the Commonwealth address, he said, “Washington bureaucrats continue to try to impose arbitrary and unreasonable regulations on the mining of coal. To them I say, ‘Get off our backs! Get off our backs!’ ”
Doug Doerrfeld, a past chairman of Kentuckians for the Commonwealth, which advocates for economic and environmental justice, said the coal industry “is not following the Clean Water Act, and we’ve been working diligently to get EPA to take a stronger enforcement tact. So it was extremely disappointing to hear the governor say just the opposite.”
Beshear’s campaign website says he has added 19 employees at the Division of Mine Permits “to speed up” the review of mine permit applications.
But Tom FitzGerald, director of the Kentucky Resources Council, complains that at the same time Beshear’s budget-balancing efforts have slashed funding for environmental protection by 25 percent.
Beshear told the Sierra Club last month, “In this technological age, I believe it is possible to make economic progress and at the same time protect our environment.”
About Steve Beshear
Political party: Democrat
Born: Sept. 21, 1944
Residence: Clark County
Occupation: Governor, lawyer
Marital status: Married; two sons, three grandchildren
Education: Bachelor’s and law degrees from University of Kentucky
Political experience: Member, Kentucky House, 1974-79; attorney general 1979-83; lieutenant governor, 1983-87; governor, 2007-present
Labels: Governor Steve Beshear