Tuesday, February 13, 2007

Nice Spin… NOT!

From the Lexington Herald-Leader:

Gov. Ernie Fletcher, who is seeking re-election this year, told a group of manufacturers today that he is willing to work with them on a controversial business tax. He was referring to the Alternative Minimum Calculation, a change pushed by Fletcher in 2005 that requires all business to pay income taxes regardless of their profitability. The calculation requires companies to figure their tax bill three different ways. Besides taxing the income of profitable businesses, the state now applies a tax formula to companies' gross profits and gross receipts. As a result, some firms had to pay taxes last year for the first time. Others faced a tax bill even though they had no profit.

State revenue estimates show the provision has infused $190 million to $200 million into the state’s coffers since its passage. A year ago, the state was projecting the provision to produce an extra $83.9 million for its first fiscal year, which ended June 30.

Paducah businessman Billy Harper, another GOP candidate for governor, and House Republicans have called for repeal of the tax. Fletcher, after speaking to a conference of the Kentucky Association of Manufacturers, said he was willing to listen to business leaders about possible changes in the so-called AMC tax.

The trade group last year conducted a poll that showed more than 90 percent of the state’s manufacturers favor repealing the alternative calculation. Fletcher said the tax has been effective "in making sure that out-of-state companies" that do business in Kentucky pay Kentucky taxes." "But we realize that no system is perfect," he added.

Asked if the tax should be repealed, Fletcher said he did not think this legislative session is the appropriate time to do that. There is no consensus to do away with the tax at this time, he said, quickly adding that "if the General Assembly wants to, I’d look at it."

Harper, Fletcher and former U.S. Rep. Anne Northup of Louisville will face off in the May 22 Republican primary for governor.

Fletcher is willing to work with business? Nice attempt LHL.

Fletcher did not promise repeal or reconsideration. Actually, he more than cuddled with his tax. (Asked if the tax should be repealed, Fletcher said he did not think this legislative session is the appropriate time to do that. There is no consensus to do away with the tax at this time.)

Harper Hammers Fletcher Faux Paux

Governor Fletcher Endorses AMT:

In discussing the Alternative Minimum Calculation,e.g. TAX, Governor Fletcher told a group of Kentucky manufacturers the purpose of the AMT was "in making sure that out-of-state companies" that do business in Kentucky pay Kentucky taxes."

"But we realize that no system is perfect,"... Asked if the tax should be repealed, Fletcher said he did not think this legislative session is the appropriate time to do that. There is no consensus to do away with the tax at this time, he said, quickly adding that "if the General Assembly wants to, I’d look at it."

Billy Harper’s Response:

"Taxing unprofitable businesses, whether they’re based in Kentucky or have headquarters elsewhere, is not the way to improve this state’s business climate. Further we shouldn’t discourage out-of-state businesses from operating here, hiring Kentucky workers and contributing to the state’s economic development. What’s clear to me – and a large portion of the state’s manufacturers – is that the Alternative Minimum Tax is bad for businesses operating in Kentucky, no matter where they call home. I’ve learned this through first-hand experience as an owner and operator of manufacturing businesses in Kentucky and other states. More consideration of the negative effects of this tax is unnecessary. No more listening is needed. Now is the time for action. The state Legislature should pass legislation to repeal the Alternative Minimum Tax during this year’s session and the governor should sign it into law."

Fletcher Democrats

From On the Mark:

The Fletcher administration is now blocking state employees' access to the Republican Party of Kentucky's website, but the Democrats'. That's right, Fletcher's republican administration has blocked state computer access to www.rpk.org but not to the Kentucky democratic party's website www.kydemocrat.com.

A couple state employees managed to find the mistake and alert me today. Finance Cabinet spokeswoman Jill Midkiff says all political websites are supposed to be blocked and she's not sure why she can get access to the dems site, but not the repubs. Kentucky democratic party chairman Jerry Lundergan jokes that since his party ran state government for more than 30 years, their web site probably has more information about running state government than Fletcher's party web site.

The Fletcher administration placed filters on state government computers that block access to political sites. The administration says state employees have no need to view those sites on state time. One democratic blogger, Mark Nickolas, who runs BluegrassReport.org, has sued the administration claiming they've arbitrarily restricted the free speech rights of some internet sites by singling them out for blockage.

Hating Their Rules – Chapter Three

From the Lexington Herald-Leader:

Concerned not only about the costs but the logistics of putting on a runoff election, local officials are urging lawmakers to do away with the provision before this spring's primary elections for governor. "You've got a lot of county clerks coming to us saying how expensive it is," said Rep. Leslie Combs, D-Pikeville. "That's all we've been hearing."

The runoff provision -- which kicks in after the May 22 primary if no candidate for a party reaches 40 percent of the vote -- is expected to cost the counties about $5 million, plus an additional $2 million from the state.

The runoff would occur 35 days after the primary, which would be June 26. But the polling vendors would have a mere 24 days to program the 7,721 voting booths because the machines must stay untouched for 11 days after the primaries to ensure a proper tally. "It can be done. But is it worth it? That is the question of the day," said Roger Baird, president of Harp Enterprises Printing Inc., which programs voting machines in 96 of the 120 counties.

And that's what legislators will debate starting this month now that Rep. Rick Nelson, D-Middlesboro, has filed a bill to do away with the runoff provision. The runoff is left over from the 1992 election reforms, which were intended to curb candidates' spending as well as the perceived influence of big-money campaign donors. Gubernatorial candidates could qualify for up to $1.2 million in taxpayer money for their campaigns if they raised only $600,000 and capped their spending at $1.8 million. A potentially even playing field financially for candidates raised the likelihood of crowded elections. So the runoff provision was created for the governor's race to ensure that a party's nominee received a substantial chunk of voters' support -- at least 40 percent.

But the General Assembly eliminated the public funding for gubernatorial candidates for the 2003 election, and changed the law in 2005 -- but it left the runoff. "The members I talked to like it, but they've heard from their county clerks who have told them that it would cost them about $1,000 per precinct to put it on," Nelson said.

Even though the provision wasn't needed for either party in 1995, 1999 or 2003, most lawmakers and political observers say it's likely to kick in this year. The Democrats have seven candidates in the race and no consensus front-runner. The Republicans also could push the primary into overtime if the three GOP candidates -- Gov. Ernie Fletcher, former U.S. Rep. Anne Northup and Paducah businessman Billy Harper -- all fail to reach 40 percent. Democratic leaders in the House must first decide whether to allow Nelson's bill to move forward for debate.

House Speaker Jody Richards, one of the Democrats' seven candidates for governor, said last month he'd be open to repealing the runoff. House Speaker Pro Tem Larry Clark, a Louisville Democrat, said the runoff is out of place now and would force financial hardships and extra workloads on the counties. "I, personally, would do away with it," said Clark, who is supporting former Lt. Gov. Steve Henry in the Democratic primary.

Politically, Clark said, the the 35-day sprint of a campaign in the runoff would "help the candidate with the most money."

Key Republicans in the GOP-controlled state Senate, such as its president, David Williams, also have offered little resistance to scrapping the overtime period. "I don't like runoffs to begin with," said Sen. Damon Thayer, a Georgetown Republican and chairman of the Senate's state government committee. "But I want to wait and see how it plays out, and if it ends up in the state and local government committee, I would look favorably on it."

But some lawmakers aren't yet convinced that it's best to get rid of the provision this year, because the governor's race has already begun. "This is a question of the integrity of the election process," said Rep. Tim Firkins, D-Louisville. "We ought not change the rules on a whim."

Don Blevins, the Fayette County clerk, said the philosophy behind the runoff was undermined when the General Assembly stripped the other election reforms. In fact, keeping the runoff now favors the millionaire candidates who can self-fund their campaigns -- the type of advantage the '92 election reforms were intended to nullify, he added. And Blevins noted that it's doubtful that a runoff would ensure that a majority of party voters determine a party's nominee.

Turnout is generally much lower in primaries than in general elections and even lower in special elections, such as a runoff. In addition, June 26 is an inconvenient time for voting when families are on vacation, school is out and college isn't in session, he said. "There doesn't seem to be a great sentiment one way or the other to have it," Blevins said. "I wish the two parties in Frankfort wouldn't play political football with it. They both know it's not a good idea now, in my judgment."

Again, were these costs unforeseen? Were the challenges unanticipated? Simply stated, these are politically convenient excuses.

Stop whining. Stop griping. Politicians, play the ball as constituted.

Youth Crucial, History Repetitive

Perennially, someone pens this story. Youth voters are engaged. They are committed.

Candidates court them. Ultimately, they remain apathetic.

From the Lexington Herald-Leader:

Beyond the chants for lower college tuition, the 250 or so students who descended upon Frankfort for a higher education rally last week had a lot more to say. This youngest generation of Kentucky voters and workers faces tremendous uncertainty about the future in terms of how health costs are covered, what opportunities await and how they will afford retirement.

And they know it. Just ask Jeanne Johnson, a finance and economics major from Western Kentucky University who serves as student body president. In an interview at Wednesday's tuition rally, Johnson said state officials must step up to consider broad new approaches to the health insurance market as well as ways to pay for college. "Many of us are not happy with the way things are going," she said.

With those overarching concerns as a background, the under-35 generation is slowly showing signs of becoming more engaged in state politics and policy. Last fall, Kentuckians elected three state representatives who were 35 or younger, more than doubling that generation's presence in the General Assembly to five lawmakers. Candidates for governor from both parties are tapping young, optimistic activists as foot soldiers and key lieutenants in their campaigns.

And many of the young activists say they're eager to get involved because their youth and idealism might actually do the state some good. "The hope of our generation is that we try to look at the lay of the land and say, 'What does the 21st century need to look like in Kentucky?'" said Colmon Elridge, 25, who chairs the Fayette County Young Democrats.

"We've got to have bold leadership. We've got to say, 'You know, we've never tried this before and it may shock you. But I promise you if it works, Kentucky will be better off for it, and the nation may be better off for it,'" Elridge said.

Over the next 21 months, that generation has a chance to flex its muscles in ways not seen in decades: to help decide the election of Kentucky's governor as well as help pick the new president. Traditionally, the youngest generation of voters has established itself as the least likely to show up at the polls to vote.

In Kentucky's 2003 general election for governor, just 17.4 percent of 18- to 25-year-olds showed up to vote -- less than half of the participation rate of the overall population. In last fall's election, turnout of that age group was as low as 4 percent in such counties as Boone and Campbell. This column will periodically check in to see how the newest generation of voters is getting involved, and what the under-35 crowd envisions as solutions to some of the problems facing them, such as:

• Paying for college. As Gov. Ernie Fletcher noted recently, tuition has increased 145 percent in 10 years. And many recent graduates are still paying off student loans. "We need to lower tuition. We need more opportunities for scholarships and more opportunities for work-study programs," said Johnathon Boles, the speaker of WKU's student senate.

• Health insurance. The candidates for governor in both parties have promised to unveil platforms related to the issue, while other states, such as Massachusetts and California, have moved forward with new approaches. In the meantime, Johnson, the WKU student body president, said state lawmakers should look at ways to increase competition among health insurance companies in Kentucky.

• Retirement. It's not exactly an immediate concern for those in their first or second jobs, but few if any in the newest generation of workers believe that when they retire, Social Security will exist in anything remotely resembling its current form. "As of now? No," said Sherman Sparrow of Louisville, a freshman at Kentucky State University. "I don't think I can find anyone who would say yes to that."

• The environment. Global warming, energy efficiency and curbing practices that have lasting effects on the landscape, such as mountaintop removal mining, remain high on the generation's radar.

Other broad issues, such as affordable housing, job creation and an overall better education system, should be debated as well, the young activists say. And the solutions should transcend party politics, many of them often add. "I'm of the opinion that a good idea is a good idea," said Elridge, "no matter whether it's from a Democrat or a Republican."

I Thought McConnell Made Candidates

From the Lexington Herald-Leader:

In the final week of last fall's campaign, Congressman Geoff Davis turned loose an army of volunteers who charged through targeted neighborhoods, knocked on doors and burned up phone lines to make sure his supporters went to the polls on Election Day.

The get-out-the-vote effort helped transform what opinion polls had shown was a dead-even race into an impressive, eight-point victory for Davis. The question that some political operatives are now asking is whether Davis can - and will - fire up his troops again this year for one of the Republican candidates for governor.

All three candidates - incumbent Gov. Ernie Fletcher, former Congresswoman Anne Northup and dark-horse Billy Harper - have reached out to Davis and sought his advice on how to campaign in his conservative, voter-rich district. Davis has listened to each, offered suggestions and wished them well. But he has made no commitment to throw his support or his resources behind any candidate in the GOP primary, said his chief of staff, Justin Brasell. "We have supporters in all three campaigns, and Congressman Davis is listening and waiting and seeing," Brasell said.

GOP county chairmen contacted last week said they have seen no evidence that Davis is working behind the scenes for any candidate. "The indications to me are that he's just going to stay neutral," said Greg Shumate, chairman of the Kenton County Republican Party.

Likewise, Kevin Sell, GOP chairman for the 4th Congressional District, said he has seen no indication that Davis plans to support any candidate in the primary. "Conversations we've had have been about nothing more than, nothing less than neutrality," Sell said.

For Davis, the governor's race is a landscape filled with both possibility and peril. A two-term congressman who lives in Hebron, Davis is not that well known outside of his 24-county congressional district. Publicly backing a candidate for governor could broaden his influence by establishing him as a player on a bigger political stage.

"If he mobilizes everybody who worked for him in 2006 to go door to door, to use that same kind of methodology, he could really start to make an impact for whichever gubernatorial candidate" he supports, said Ryan Lee Teten, a political scientist at Northern Kentucky University.

The danger is that the candidate he picks could end up losing, Teten said. "Yes, he can really make a name for himself if he comes out in support of one (candidate) or the other," Teten said. "But the problem is if he endorses them and they lose, what does that say for his future elections and what does that say for his decision-making ability?"

Another risk is that, should he back a losing candidate, Davis might find himself at odds with the eventual winner and, in the process, might even alienate some of his own supporters.

Davis' predicament became even more problematic when Sen. Jim Bunning, R-Ky., of Southgate, publicly backed Northup late last month. If Davis were to come out in favor of Fletcher, he would be sending to his supporters a message that contradicts Bunning, a fellow Northern Kentuckian whom Davis has frequently cited as one of his role models. "You all want to be on the same page so it looks like the Republican Party in Kentucky has their act together and knows what they are doing," Teten said.

Given the risk, it's no surprise that Davis has decided to remain neutral, Teten said. "He's kind of caught between a rock and a hard place right now, and that may be why he's sitting this one out for a little while," Teten said.

Davis isn't alone. Of the six Republicans who represent Kentucky in Congress, Bunning is the only one so far who has publicly backed a candidate for governor. Bunning said he is supporting Northup because he thinks she has the best chance of winning in November. Sen. Mitch McConnell, considered the godfather of the Kentucky Republican Party, has said he has no plans to endorse a candidate in the primary, although he is believed to be backing Northup privately.

Brasell said Davis has a good relationship with Northup. The two served together in the House until Northup lost her re-election bid in November. "They worked together very well in Washington," Brasell said. "If she were to be elected governor, I'm sure he would work well with her then, too."

At the same time, "we've worked very well with the governor," Brasell said. Both Northup and Fletcher have made it no secret that they'd like Davis' support. Northup said during a campaign stop in Northern Kentucky last month that she and Davis have been "good pals" and that she hopes to tap into his get-out-the-vote effort.

"During the last campaign, Geoff Davis earned a national reputation as organizing quite possibly the best get-out-the-vote effort in the country," said Rick Robinson, one of Northup's operatives in Northern Kentucky. "Any candidate would be a fool to not want to have somebody like Geoff Davis on their team."

Fletcher also would be interested in taking advantage of Davis' vast resources, said his campaign manager, Marty Ryall. "Congressman Davis has quite a network up there, and I think anyone wants to do their best to try to tap into it," Ryall said. "We have a lot of support up there, so hopefully we will be able to."

Some insiders speculate that Davis may be waiting to see who emerges as the strongest contender and that he might then throw his support behind that candidate. Asked about that possibility, Brasell reiterated that Davis has made no commitment to any candidate: "He simply has just been reaching out to his supporters and listening to what they have to say about the race," Brasell said.

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