Expanded gambling fades as an issue, but lingers as a potential source of revenue; Conway eyes it for pensions

By Jerry Seale

University of Kentucky School of Journalism and Telecommunications

The long-running issue of expanded gambling is not in the primary focus of the candidates in the Nov. 3 gubernatorial election, but it could play a role in the next governor’s administration.

Republican Matt Bevin once went as far as to dismiss the issue as “almost irrelevant,” and has made it clear he has no intention of making a push to bring in casinos if he is elected.

“I don’t think it’s the solution to what ails us financially in this state,” Bevin said during the October 6 gubernatorial debate.

Democrat Jack Conway has pointed to expanded gambling as a likely source of revenue that bond-rating agencies want dedicated to Kentucky’s pension system, which has been described by many as being in a state of “crisis” because it is so underfunded, causing the state’s bond rating to drop.

“If we’re looking for new revenue, I think gaming is the most obvious place to look,” Conway said on Louisville’s WFPL Radio Oct. 9.

Independent candidate Drew Curtis is not much more enthusiastic about the idea of casinos in Kentucky than Bevin is, but is not ruling it out either. “Our pension system is in dire shape, so we must consider all options,” he told WFPL.

The expansion of gambling and the creation of casinos in Kentucky was a major part of Gov. Steve Beshear’s platform when he first ran for the office in 2007, but it has not materialized.

Many who share Conway’s stance have looked to Illinois, Indiana and Ohio as evidence that Kentucky should expand gambling. A PricewaterhouseCoopers LLP study showed more than $1 billion a year is spent by Kentuckians in casinos of other states. Some believe bringing casinos would keep a large portion of that money in the state, but the Family Foundation of Kentucky says gambling targets families, hurts businesses, corrupts government and hurts vulnerable citizens.

The horse industry in Kentucky declined during the Great Recession. The numbers of races and horses dropped, as did participation and betting at the races. Revenue from expanded gambling, if put into race purses, could help the industry prosper again.

House Speaker Greg Stumbo, D-Prestonsburg, has said he will propose a bill to amend the state constitution to allow seven casinos to operate in Kentucky. If approved, tax revenue from the casinos would be given to schools, the pension system and the racing industry.

If approved by three-fifths of legislators in both houses, the amendment would go on the November 2016 ballot for voters to decide.

Despite their differing stances on expanded gambling, Conway and Bevin have both said they would like to see voters decide the issue.

However, several factors stand as obstacles to the legalization of casino gambling in Kentucky. Gene Clabes, executive editor of KyForward.com, said Ohio and Indiana have “leapt ahead” of Kentucky on the casino front, as can be seen by looking at the transformation of the Belterra race track in Indiana near Cincinnati.

“Kentucky is years behind,” Clabes said. “One factor to keep in mind is that the horse industry is divided on casino gambling versus instant racing. It seems this division doesn’t bode well for a favorable outcome for casino gambling without unity from the industry.”

Instant racing, recently introduced to Kentucky, uses devices that greatly resemble slot machines to base betting on the outcome of past horse races. It might cause support for casino gambling legalization to wane, if bettors and tracks are content with it and feel no need to try to push for more.

Instant racing is lucrative. A report to the Kentucky Horse Racing Commission said terminals at the Red Mile track in Lexington took in just over $5 million in wagers.

Nominees for governor differ greatly on issues, personality

By Cheyene Miller

University of Kentucky School of Journalism and Telecommunications

One candidate’s wonkiness and the other’s confrontational personality, and their stark differences on some issues, have culminated in a virtual toss-up in the Nov. 3 election for governor.

Democrat Jack Conway and Republican Matt Bevin differ greatly in their stances on the race’s hottest issues, including the state’s crumbling pension system, the Medicaid expansion under federal health reform and the state’s education system, which makes up more than half the state budget.

Regarding the underfunded pension system, Bevin touts his experience as a businessman, managing pensions and making payroll.

He has advocated moving new state workers to a 401(k) style system and offering current workers the opportunity to join the system, which the legislature recently changed to save money.

Bevin said during Monday’s KET debate, “We’re not really solving the problem at all,” partly because the estimated rate of return on investments is too optimistic.

Conway has said implementing such a system would actually cost the state $8 billion more in the first 15 years, since new hires are helping to pay current benefits. He has more or less advocated keeping the revised system in place, saying the state can meet its immediate obligations because it has a $219 million surplus.

“I think we can make it. I think that’s manageable,” Conway said in the debate.

Conway has said that moving teachers to a 401(k) style system would be “absolutely off the table” because they do not participate in Social Security, which would be their safety net should the 401(k) investments fall short. Bevin has said he would apply for a waiver to let teachers participate in Social Security without the state and schools making the employer match.

On the Medicaid expansion, which has extended health coverage to about 400,000 Kentuckians, Conway favors keeping it, as well as sustaining Kynect, the state’s health-insurance market that has about 100,000 Kentuckians in private plans. Bevin wants to abolish Kynect and use the federal exchange.

Bevin said in February he would immediately reverse the Medicaid expansion upon taking office, but later denied saying that. Since July he has said he would seek a federal waiver to convert to a system like Indiana’s, where Medicaid beneficiaries pay higher premiums to receive better benefits, as well as co-payments.

“I don’t care if it’s a dollar or two dollars,” Bevin said in the KET debate. “People should have skin in the game.” Conway said in the debate that the Indiana program keeps people from getting coverage.

Bevin says the expansion is not sustainable, but Conway cites a state-funded study predicting that it will pay for itself by generating health-care jobs and tax revenue. He acknowledged during the debate that his administration would be challenged to prove that.

Conway has focused his campaign heavily on education, especially advocating more funding for early childhood education, citing research that shows 90 percent of brain development happens by age 5.  He has also shown openness to restoring some of the funding cut from higher education.

Bevin has questioned the effectiveness of Head Start and called for tax vouchers to support private education, which Conway opposes. Bevin says he would use “outcomes-based funding” to encourage more graduates in science, technology, engineering and math. Conway said on Monday’s debate that he would consider such an approach but wants a “level playing field” for universities.

Both candidates have touted their ability to improve the state’s economy, albeit through different methods.

Bevin says that the pension system is the top economic priority and calls for making Kentucky a right-to-work state because states that border Kentucky have the law that bans requirements to pay union dues or fees.

Conway opposes right-to-work and supports raising Kentucky’s minimum wage to $10.10 an hour over a three year period.  Bevin’s opposes raising the minimum wage, now $7.25 an hour.

 “I’m the only one sitting here who’s ever created a job,” the Louisville businessman said in the KET debate and on numerous other occasions.

Conway has noted that he is the only candidate who has run a government agency, and accused Bevin of not knowing how government works.

Television commercials supporting Conway have used many of the largely disproven attacks on Bevin that U.S. Sen. Mitch McConnell used to beat him in last year’s Senate primary. In debates, Bevin has repeatedly accused Conway of lying about him.

In the last few days Bevin has increased his effort to associate Conway with President Obama, who is unpopular in the state. Conway has noted that he was the only Democratic attorney general to sue the Obama administration for its anti-coal regulations.

Independent candidate Drew Curtis is also on Tuesday’s ballot.

Cheyene Miller of London is a journalism senior at the University of Kentucky. He wrote this story for Covering the Governor’s Race, a course taught by Associate Professor Al Cross and Journalist-in-Residence John Winn Miller.

Candidates have three different takes on the next governor's biggest problem, underfunded state pensions

By Matthew Young

University of Kentucky School of Journalism and Telecommunications

Kentucky’s financially struggling pension system is one of the most serious issues facing the next governor, and one of the few issues all three candidates consistently discuss and have clear differences about. The system’s unfunded liabilities have already lowered the credit rating of the state, making it more expensive to borrow money and discouraging investment by employers.

But just how do pensions play such a large role? For anyone who does not study finances, understanding a pension system is complicated, and the Kentucky General Assembly has made it even more confusing over the last decade or two.

Not too long ago, at the turn of the century, the Kentucky pension funds were in great shape. The system was fully funded, and it looked like smooth sailing. But an economic downturn put a hole in the ship, the downturn of the stock market shrank the returns on investments for the pensions, which had typically accounted for about two-thirds of pension fund revenue. At the same time the economic recession left the state with less revenue to plug the holes, and the pensions have been taking on water ever since.

The legislature and governors have not fully funded  state employees’ pensions since 2000, and not for teachers since 2008. To compound the problem, lawmakers have spent money from both funds on other projects. The IOUs left in place of the cash have not been satisfied yet, leaving the unfunded liabilities in the tens of billions of dollars, depending on how far you look into the future. The estimate is based on projected payments to current employees until the end of their lives.

Another big problem is that there are more retirees in the system as the baby-boomer generation leaves the workforce. Payments from the Kentucky Retirement Systems are double what they were 10 years ago, and the worker-to-retiree ratio has fallen to nearly one worker per retiree. The problem is made worse by cost-of-living adjustments that have been approved by the legislature without being funded, making benefits even greater.

The actuarially required contribution (ARC) for the next fiscal year is anticipated to be nearly $800 million, which would be more than $100 million greater than last year. The Kentucky Teachers Retirement System is expected to ask the legislature for $520 million next year. The state already borrowed $900 million to shore up KTRS in 2010.

In 2013 the legislature undertook major overhauls of the pension fund to stop some of the bleeding. New hires were place in a hybrid style plan that required them to contribute a dedicated percentage of their income (5 percent for Kentucky Employees Retirement System non-hazardous employees) to the pension fund. Cost of living adjustments were eliminated for all retirees unless the KRS board determined liabilities were funded at 100 percent or greater, and the cost of living adjustment is fully paid for. Double dipping has been eliminated, and transparency and oversight were increased within the pension system.

Most importantly, making the ARC was changed to be the expectation by 2015, and would require a waiver by the legislature in a budget bill in order not to do so.

To avoid further downgrades in the state’s credit rating, analysts say, the changes Kentucky made in 2013 were not enough. The state must dedicate a specific stream of revenue to the pension fund, rather than continue the current plan.

The legislature has a separate pension fund for its own retirees and judges, which has been much better funded than KERS and KTRS. The return on investment for the legislature’s pension fund was also five times greater than that of the KERS, which posted a meager 2 percent return for the fiscal year that ended June 30.

The candidates have substantially different ideas on how to tackle to the pension crisis.

Democrat Jack Conway does not have a concrete plan, choosing to take more of a wait-and-see approach: For KERS, he said, “I think we can get to the ARC for the next budget cycle.”

Conway said he won’t be more specific on solving the rest of the problem until after he sees the recommendations of a task force on pensions created by Gov. Steve Beshear.

“What the ratings agencies are saying to us is that, ‘This nonsense where you had last year, the legislature telling the governor to find $80 million in savings and taking $30 million out of the road plan, that’s not going to cut it. Find a dedicated source of revenue,” Conway said.

While Conway said he believes a dedicated revenue source can be found for the state employees pension, “finding one for the teachers is going to be tougher.”

Conway said he is open to a variety of options, including taxing casino gambling if voters legalize it.

Moving teachers to a defined contribution plan – like a 401(k) plan where employees and employers make contributions -- is “absolutely off the table” for Conway because they do not participate in Social Security.

Republican Matt Bevin, who opposes casinos, said he would keep all current retirees on the pension plan, but would give them the option for them to move to a defined contribution plan, like a 401(k). All new hires would be put into a defined contribution plan, which does not typically bring the same level of benefit as a pension.

The state has been too generous with its workers, Bevin argues, and has put itself in a place it can no longer afford. Bevin supports joining 29 other states in applying for a federal waiver to allow Kentucky teachers to participate in Social Security so they can have a guaranteed source of income during retirement if their 401(k) runs dry. This plan would also require the state and school districts make the employer contribution to Social Security unless this requirement were to be waived by the Social Security Administration, a move that is not likely to occur.

But experts said moving new hires to a defined contribution plan could cause the funds to run out of money even sooner because there would be no new workers contributing to the fund to cover benefits paid out to current and future retirees. Conway says it would create an $8 billion problem in the next 15 years.

The idea of bonding billions more to pay down the unfunded liabilities is not agreeable to Bevin, either. The fund would have to garner four times its current return to make bonding a viable alternative. In 2015 the return on investment was only 2 percent for the pension fund. When interest rates for bonds (in a state with a less than stellar credit rating) and fees to the investment managers are factored in, a 2 percent return would only dig the fund deeper into a hole.

Independent Drew Curtis sees the problem differently: “What it all comes down to is the checks must go out. If we don’t send the checks out, that instantly throws the state economy into recession.”

He proposed a $5 billion dollar line of credit to help cover the pension shortfalls. Rather than a bond, which would take out all $5 billion at once, and immediately begin to require interest payments, a line of credit would allow smaller amounts to be taken out when needed, similar to the way a credit card works.

“We don’t need to get to 100 percent funding if we have checks going out,” he said.

When the pension system performs well and can produce enough return on investment to send the checks out, the line of credit would be left alone. In years the fund needs extra cash, the line of credit could be tapped to pick up the shortfall, and paid back when times improve. This system would guarantee retirees still get their benefits, but would leave the legislature free to put funding toward the ARC rather than payments to beneficiaries, Curtis says. He says he would fund “ARC plus,” at 110 percent for the next 20 years.

Curtis admits that funding KTRS is trickier, but he takes a similar approach to Conway, saying there are a few years of wiggle room to assess the situation before the funding shortfall must be addressed.

PENSION TERMS EXPLAINED

ARC: Actuarially Required Contribution. This is the minimum yearly payment that must be made into each pension fund to cover the normal cost of pensions for the state, as well as the amount needed to pay down unfunded liabilities. If this payment is not made, unfunded liabilities increase.

ARC plus: A higher payment made to the pension system to bring down unfunded liabilities more quickly.

Unfunded Liabilities: The amount that is projected to be owed to current retirees in future years that the state will not have under current funding rates. Unfunded liabilities are measured in terms of years (the 10 year unfunded liability measures how much more money the state needs to pay pensions for the next decade) or in terms of how much more is needed to pay current retirees for as long as they are expected to live.

KERS: The Kentucky Employees Retirement System. The pension fund that goes to all non-hazardous state employees. From secretaries to police officers, about 120,000 retirees are currently in KERS.

KTRS: The Kentucky Teachers Retirement System. This covers all public school teachers in Kentucky, and includes about 141,000 retirees. Teachers do not receive Social Security, leaving this pension as their only guaranteed source of income.

Defined Contribution Plan: A system that sets the amount an employee pays in as the standard. The amount the employee gets in payouts depends on the performance of the investment. The 401(k) fits into this category.

Defined Benefit Plan: An employee makes contributions to the system, usually a set percentage of wages, for as long as they work. After retirement they are guaranteed a certain payment each month, often a percentage of their monthly pay when employed.

KRS: The Kentucky Retirement System. This is the system that manages all pension plans for the state, such as KERS and KTRS.

Candidates make misstatements and questionable assertions in televised debate

By Al Cross
Kentucky Health News

Many of the questionable assertions and outright misstatements in Sunday night's debate for governor were about health care. Here's a fact check:

Conway said he had cut his budget as attorney general by 40 percent. Bevin said that was a lie because the legislature writes the budget. The governor receives budget requests from agencies and proposes a budget to the legislature, which passes it.

Bevin said Conway lied when he said Bevin would kick half a million people off health care. Bevin said in February that he would immediately end Gov. Steve Beshear's expansion of the Medicaid program. He has since denied saying that, and said last night that Democratic videos of his quotes omit the question he was asked, but that is not the case with his February quote. He now says he would seek a federal waiver to change the program. It might be argued that he could issue another executive order to replace Beshear's, but the Medicaid program has certain requirements that must be met unless waived, and waivers are not available immediately. While Bevin has been vague about his Medicaid plans, he has made clear for the last three months that his actions would not be as abrupt as he first said they would be.

Conway said the Kynect health-insurance exchange, which Bevin wants to abolish, is three and a half times more efficient than the federal exchange, to which policyholders would go. Bevin said that is "an absolute falsehood" because Kynect is funded by a 1 percent fee on all health-insurance policies in Kentucky and only 2 percent of the policies are bought through Kynect. Conway said afterward that he was referring to the 3.5 percent fee charged by the federal exchange, which would make those policies more expensive. While the term "efficient" could arguably be applied to the cost of those policies, a more common interpretation of Conway's comment would be that he was talking about Kynect's operating efficiency.

Bevin said the Kentucky Health Cooperative, a non-profit health insurer that is closing due to losses and lack of money, was "a distinct part" of the study that predicted the Medicaid expansion would pay for itself until 2020. The cooperative is not mentioned in the study. Bevin said afterward that the co-op was part of the "inputs" considered by the study. Reminded that the issue was the sustainabilty of the Medicaid expansion, Bevin noted the 51,000 co-op policyholders who will be losing their coverage. Reminded that Kynect has seven other insurers they can select from, Bevin asked, "Where are those taxpayers dollars going to go?" He was reminded that the co-op was funded by federal dollars, and "Those are our dollars." Bevin is running for governor, not president, but he is trying to appeal to people who dislike the entire "Obamacare' system. He appears to be using the co-op's failure to suggest that the system is not sustainable. However, the co-op, Kynect and the Medicaid expansion operate separately and are separately funded.

Conway quoted Bevin as saying that early childhood education, Conway's main issue, "serves no purpose." Bevin said was "another of those Democrat lies" because his full quote was that it serves no purpose after the third grade. That is based on a study that showed the effects of Head Start disappear after the third grade. Head Start is not the same as the early-childhood education program advocated by Conway, but Bevin has equated the two in the past.

Bevin said the state does not have the surplus that Conway mentioned because it has "tens of billions of dollars in unfunded liabilities." He was referring to state pension funds, which get annual appropriations from the budget but are financially separate. Budgets are for two years and the unfunded liability is for projected payments for current employees for the rest of their lives.

Bevin said, "It's a false idea that coal jobs can't come back." He noted that world coal demand has never been higher, but that ignores the facts that many electric plants in the U.S. have abandoned coal for cheaper natural gas and the coal in Central Appalachia is by far the most expensive to mine in the U.S. The Kentucky part of that coalfield has lost half its coal jobs in the last three years.

Bevin, Conway have first televised, one-on-one debate

By Cheyene Miller and Matt Young
University of Kentucky School of Journalism and Telecommunications

Neither of the two major party candidates made a large impact with the first televised head-to-head debate in the governor’s race, four weeks before the Nov. 3 election.

Republican Matt Bevin and Democrat Jack Conway both threw plenty of punches, but neither landed with the force they had probably hoped. They broke little new ground on the issues during Tuesday night’s debate at Centre College in Danville.

In a race that has struggled to gain attention or interest from voters, both candidates took to the stage to press repeat on their record players of political statements.

One of the few times the debate elicited a response from the audience came when Bevin said he wants to make it easier and more attractive for businesses in Kentucky to open. “We will, indeed, un-constipate Frankfort,” Bevin said. “You can take that to the bank.”

That line won applause, but so did Conway’s reply.

“I prefer to say I’m going to streamline it, rather than un-constipate it,” said Conway, who also said Kentucky is number two in the nation in small business creation per capita.

Bevin said changes need to be made to make Kentucky more competitive and he would push “right to work” legislation, which would outlaw labor contracts that require workers to pay union dues. Both Tennessee and Indiana have these laws, and Bevin argued that they put Kentucky at a competitive disadvantage for attracting business.

“For those of you that are struggling to find gainful employment, how is that per capita ratio thing working for you?” asked Bevin, who also said Kentucky currently has 71,000 fewer jobs than at the beginning of Conway’s term as attorney general.

Bevin opened by touting his business career, saying he was the only one on stage who had “been the executive of anything.” He added that of the two candidates, he was the only one who ever ran a business, created a job or made payroll.

Conway cast himself as a fiscal conservative, saying he cut his office’s budget by 40 percent and was the only Democratic attorney general in the country who sued the Environmental Protection Agency over regulations on coal.

The candidates reiterated their positions on under-funding of state pensions, perhaps the most critical long-term issue facing Kentucky lawmakers.

“We have to make changes or nobody will get what’s been promised to them,” said Bevin, who advocated moving pension recipients to a defined contribution plan, similar to a 401(k) style savings plan. This creates a problem with the Kentucky Teachers Retirement System because teachers are not eligible to receive social security, and risk outliving their 401(k).

Conway said the state legislature has made the proper fixes in previous years and the systems can be solvent if the minimum payment, known as ARC, was made by the legislature — something that has not consistently happened for over a decade.

The soundbites got serious when the candidates were asked about the recent shooting at an Oregon community college that left nine people dead. The question introduced the topic of gun control, which often follows in the wake of mass shootings.

“We have to take a good, hard look at mental illness,” said Conway, who said that he does not favor stricter gun regulations or allowing teachers to be armed in schools.

Bevin said he is also against stricter gun regulations, and said he favored allowing armed teachers in school. He noted that he, his wife, his running mate Jenean Hampton and her husband are proud gun owners.

When Bevin and Conway were directly questioned each other, Conway continued to focus on Bevin’s refusal to release his tax returns, an unofficial tradition for Kentucky candidates for governor. Bevin said he will not release his tax returns, and noted once again that he is not legally required to do so.

Bevin took the opportunity to question Conway for taking money from political groups with anti-coal agendas, to which Conway replied he has accepted money from people he later put in jail.

In their closing statements, the candidates told voters to ask themselves who they trust to run their state.

“I don’t feel the need to lie about Jack Conway,” said Bevin, referring to the millions of dollars in attack advertising against him. He emphasized his business career as a qualification for the governor’s office.

Conway said his experience as attorney general qualified him for the job. “I understand Kentucky,” said Conway, of Louisville. “I have a plan for Kentucky, and I’ve delivered for Kentucky.”

The most recent Bluegrass Poll, released on Sept. 30, showed Conway with a small edge at 42 percent of potential votes compared to Bevin’s 37 percent. Seven percent said they would vote for independent candidate Drew Curtis and 15 percent are undecided.

Curtis did not meet the organizers' criteria for inclusion in the debate, but was in the debate hall and answered reporters' questions after the hour-long debate. Today the founder of social-networking news site fark.com published an essay questioning the need for political parties.

The debate was sponsored by Centre, AARP and WAVE-TV, Louisville, and was also broadcast on stations in Lexington and Northern Kentucky, and by out-of state stations serving northeastern Kentucky and the Paducah and Owensboro regions.

As Bevin and Conway debate Medicaid, taxes and truth, Curtis gets the limelight

By Jerry Seale, Kevin Erpenbeck and Ben Johnson

University of Kentucky School of Journalism and Telecommunications

              

With seven weeks to the election, all eyes were initially on Democrat Jack Conway and Republican Matt Bevin during the gubernatorial debate in Louisville Tuesday night -- but independent candidate Drew Curtis may have stolen the show.

In a debate that covered a wide range of issues, Curtis got off to a quick start separating himself from the other bickering candidates with jokes and a sharp focus on how he would fix the state’s problems.

Conway criticized Bevin for his stance on Medicaid that he says would kick half-a-million people off Medicaid, the federal-state program to provide health care for the poor.

Bevin, who backed off that stand in late July, said Tuesday night that he would apply for a federal waiver that would let Kentucky customize Medicaid to save money.

Curtis said he is in favor of keeping the Medicaid expansion as it is, citing a state study that it will pay for itself by adding health-care jobs.

When Conway chided businessman Bevin for not releasing his tax returns -- insinuating Bevin has something to hide, Bevin called his claims a “smoke screen.” He said voters should “pay attention to what really happens, not what comes out of Conway’s mouth.”

When Conway claimed Bevin said Kentucky should “let the road funds go to zero and audit it for the last 10 years,” Bevin hotly denied it.

“So much of what comes out of your mouth, Jack, is absolutely made up,” Bevin replied. “I’ve never once called for letting anything go to zero and auditing it. You literally just make lies up on the fly.”

The Conway campaign did not respond to requests for documentation of the claim.

Another contentious exchange was over the jailing of Rowan County Kim Davis for ignoring a federal court order to issue marriage licenses after the Supreme Court legalized same-sex marriage.

Bevin said that trampled Davis’s freedom of religion, and Gov. Steve Beshear could have avoided the controversy with an executive order.

Conway, who is the state’s attorney general and has said Beshear does not have the power, said he sympathized with Davis but she needed to follow federal court orders.

Once again Curtis, standing between the other two men at Bellarmine University lecterns, drew laughter with his response.

“I think you all are both wrong,” he said. “It is the job of the executive to back up even the laws they don’t like.”

The three also differed significantly on how to deal with the economy, particularly in Eastern Kentucky.

“We need a governor who can take a look forward and anticipate problems before they actually occur,” Curtis said. “I don’t think we currently have that, no offense to these guys here. I don’t think it’s been done in American politics before. That is the thing I’m looking to change.”

Bevin said the problem isn’t just in Eastern Kentucky, but the whole state. “If there’s a hole in the boat, all our feet are going to get wet.” he said.

Conway endorsed the Shaping Our Appalachian Region initiative of Beshear and 5th District U.S. Rep. Hal Rogers.

On education funding, Conway said it would be a top priority, but Curtis said he couldn’t address that issue until the state’s pension problems are fixed and its finances are in better shape. He predicted twice that a recession is coming.

Bevin did not address elementary and secondary education, but said higher education needed to be better stewards of state funds and do more to prepare people for jobs.

That answer was a theme for many of Bevin’s answers in the debate.

The candidates had different opinions on how to shore state pension plans, which are the second most underfunded in the nation.

Conway said the problem is starting to take care of itself and will take some time for the full effects to be seen. To the contrary, Bevin said, the state is only “digging deeper and deeper into the hole,” and that major change will be needed.

Curtis has proposed his own plan, which would involve a line of credit, which could be tapped into when needed and paid back when times were better. Bevin criticized this plan, and said officials in Frankfort should not be trusted with such a system.

Conway was asked how he would fund the early-childhood education plan he proposed this month. He cited his record in office, saying he has returned over $300 million to the treasury, as assurance that he can find the money. Bevin and Curtis were skeptical.

Conway also pointed to his work against drug abuse and said he would put a plan in place to bring more treatment and drug education to Kentucky.

Curtis endorsed a statewide needle exchange program but Conway only backed the current local option, and Bevin did not provide a clear answer to the question.

The candidates found a rare moment of agreement on expunging the records and restoring voting rights for non-violent drug offenders who have served their time.

Major-party nominees leave independent Drew Curtis plenty of room to run in their first debate

By Matthew Young
University of Kentucky School of Journalism and Telecommunications

When you are polling at only 8 percent, you can afford to take some risks. This is the position in which independent candidate Drew Curtis entered Tuesday night’s gubernatorial debate, the first among the three candidates.

Being the long-shot provided Curtis insulation from attacks by Republican Matt Bevin and Democrat Jack Conway. When candidates were given time to ask each other questions, neither of the two major party candidates directed theirs toward Curtis, leaving him free to state his case largely unchallenged. Happy to let Conway and Bevin take shots at the other, Curtis also provided comedic relief.

The political circus surrounding Rowan County Clerk Kim Davis, whose refusal to issue marriage licenses following the Supreme Court decision legalizing gay marriage landed her in jail for five days, provided Curtis with his first of many memorable lines.

Drew Curtis

“I think you’re both wrong,” Curtis told his foes to an uproar of laughter. Bevin had reiterated his view that Conway and Gov. Steve Beshear should provide some accommodation for Davis’s religious freedom – a step they say they have no power to do.

Curtis said, “As the executive you have an oath to uphold the laws of your land ... When the rule of law is not upheld society falls apart at the seams.”

When Conway asked Bevin why he had not released his tax returns, Bevin dodged the question, complaining that this was only a distraction from issues unfavorable to Conway.

Curtis again cut the tension with a joke: “So, I’ll actually answer this question.” Curtis had to wait a few seconds for the laughter in the room to subside before saying he will also release his tax returns, and offered anyone a tour of his house to prove his transparency.

When Curtis was asked about the state’s underfunded pensions, he had another line ready for Bevin: “You know you have been trying to ignore me, and I appreciate that.”

Curtis then asked for specific math on how Bevin’s proposed pension plan would work. When Bevin again sidestepped a specific answer Curtis used humor to display his displeasure. “On a math base the money is not there. [We] can’t convert everyone to a 401k plan right now and we cannot start putting new hires into it because the revenue bankrupts the system a good year earlier; and I’ll make a spreadsheet and send it to you.”

To fix the pension system, which is underfunded by over $9 billion, Curtis would create a line of credit for the state by issuing $5 billion in bonds. During years when annual return on the invested pension funds is lower the credit line could be tapped to fund the pension fund at 100 percent. During years when the return is high the accrual could be used to pay down the line of credit.

Bevin’s plan is to move all newly hired employees into a new 401(k) system of defined contributions – a type of savings where the employee and the state make contributions.

Perhaps Curtis’ most memorable line of the night came in response to a question about why he chose his wife Heather as his running mate, given the history of governors and lieutenant governors not getting along even after running together as they have since the early 1990s.

“I’ve been surprised by the number of people who think that it's a strange thing. I'm really starting to question all the rest of your marriages,” Curtis said.

He explained that while his strength is strategy, his wife’s is operations, pointing to the success of Fark.com, which she has run for years.

When he wasn’t lightening the occasion with his wit, Curtis used the stage to make voters more familiar with his positions, which include:

●            Using data analytics to make state government more efficient

●            Support for a statewide needle exchange program

●            Bringing broadband networks to all corners of Kentucky

●            Addressing mental health issues to keep guns away from mentally unstable, and

●            Restoring voting rights to 180,000 non-violent released convicts.

At the end of the night each candidate got what they wanted from the debate, said Bill Stone, former Jefferson County Republican Party chairman. Curtis benefited from his exposure to the spotlight, which has been hard for him to find as the independent.

Candidates use religious values: Bevin on Rowan clerk, Conway on Bevin's attitude toward Medicaid expansion

By Cheyene Miller
University of Kentucky School of Journalism and Telecommunications

The big job at stake this year is Kentucky governor, but the headlines and sound bites suggest that the Nov. 3 election is about religious values.

In a race that doesn’t seem to be gathering much public interest, Democratic Attorney General Jack Conway and Republican businessman Matt Bevin are using religion to appeal to Kentucky voters, who remain a highly religious voting base.

Bevin is using Rowan County Clerk Kim Davis’s jailing for refusing to issue marriage licenses to his advantage, saying Davis’s religious liberties and First Amendment rights are being violated.

Bevin criticizes Conway, who refused to appeal last year’s federal ruling that Kentucky’ same-sex marriage ban was unconstitutional, for not doing his job.

Conway said last year that he would not appeal because the lower-court judge got it right, an appeal would be on the wrong side of history, and good-paying jobs are going to states that allow marriage equality.

The independent candidate, Fark.com CEO Drew Curtis, says clerks have the right to their own personal beliefs but must follow the law as public officials.

The Davis situation did not mark the first time Bevin spoke about Christian values, as he made it one of his primary talking points during Fancy Farm Picnic weekend July 31-Aug. 1. “We need to stop apologizing for the Christian principles, the great American values that make this country great,” he said at a Republican dinner.

Conway has found his religious angle with the Medicaid expansion and Kynect, the Kentucky health insurance market, established under federal health reform. The two functions have given coverage to about 521,000 people and helped Kentucky reduce its uninsured rate more than almost any state in the nation.

In his speech at Fancy Farm, Conway criticized Bevin for not applying his Christian values to his views on health care. He said voters should elect someone who “understands that the truly Christian thing to do is to say that we are our brother’s keeper and healthcare for our people makes us a healthier and better society.”

Bevin has said that he would dismantle Kynect, but has backtracked on plans to abolish the Medicaid expansion, saying he would adopt a less expensive program, perhaps like Indiana’s, in which clients can pay premiums to get better benefits and get refunds if they don’t use the benefits.

In addition to health care, Conway and Bevin have also sparred on Kentucky’s pension system, which is considered one of the worst in the country. 

Bevin cites his experience at managing pension-fund assets, but was unfamiliar with a key facet of the state’s pension system when questioned about it this summer. He advocates moving away from Kentucky’s current pension system in favor of a 401k-style system and offering incentives to current employees who switch.

Conway says he is committed to making the pension payments required by a recent law, and wants to find a designated source of revenue for that.

Curtis proposes issuing a $5 billion bond, structured as a line of credit, that can be tapped in years when pension funds aren’t keeping up with their obligations, and pay back the debt in years when it runs ahead.

Conway is focusing his campaign strategy on education and Bevin’s statement in the Republican primary debate that early childhood education’s effects disappear after the third grade.

Conway released his education plan on Tuesday, proposing early education for 3-year-olds with parents making up to 138 percent of the federal poverty level (the same level as those who qualify for the Medicaid expansion) to during his first year in office, and all 3- and 4-year-olds whose parents make up to 200 percent of the federal poverty level by the end of his first term.

Bevin is more conservative on education and favors charter schools.

On television, the candidates and their supporters have questioned each other’s integrity.  Conway has used recycled verbal jabs from the 2014 Senate Republican primary, in which Sen. Mitch McConnell’s campaign called Bevin an “East Coast con man” and a “pathological liar.” He also criticizes Bevin for not releasing his tax returns, which Bevin says he will do if elected.

Bevin hasn’t run TV ads in the general election, but outside groups supporting him are trying to tie Conway to President Obama,

All three candidates have female lieutenant-governor running mates, Democrat Sannie Overly, Republican Jenean Hampton and independent Heather Curtis, the candidate’s wife. Hampton would be Kentucky’s first black statewide elected official.

The most recent Bluegrass Poll, in late July, had Conway leading with 43 percent of respondents, Bevin with 38 percent and Curtis with 8 percent.

The first debate with all three candidates will be held Tuesday at Bellarmine University in Louisville, from 7 to 8 p.m. ET. It will be televised and streamed by WHAS-TV and WKYT-TV, and is also sponsored by The Courier-Journal and the Lexington Herald-Leader. The four news outlets sponsor the Bluegrass Poll.

Bevin says Conway not qualified; Conway and Beshear say Bevin is not living up to his stated Christian values

By Cheyene Miller

University of Kentucky School of Journalism and Telecommunications

MAYFIELD, Ky. – The 2015 Kentucky governor’s race heated up just ahead of the annual Fancy Farm Picnic as both candidates leveled attacks against one another.

At a Republican dinner Friday night, Matt Bevin said of Democrat Jack Conway, “He’s not qualified to be the governor of this state” because of his lack of business experience.

“He never served this nation in the military. He’s never made payroll.  He’s never worked in the private sector except a few months at a time working for his dad between political gigs,” Bevin told reporters after the Marshall County dinner.  “He has no qualifications to be governor other than the fact that he is the result of a system that has groomed him for this from the time he was born.”

Conway fired back Saturday morning by touting his experience as a private-sector attorney and his fiscal responsibility as attorney general,  nd questioning Bevin’s own qualifications. “I am one heck of a lot more qualified to be governor than Matt Bevin is,” Conway told reporters.  He said Bevin “couldn’t even tell a group of retirees a few weeks ago” a key facet of concern about state pension funding. 

“Matt Bevin has a platform on education that’s a bunch of platitudes that would decimate public education in this state,” Conway said. “Matt Bevin just a couple of months ago went on statewide TV and said early education serves no purpose.  That doesn’t sound like someone’s who’s qualified to be governor to me.”

Bevin accused Kentucky Democrats of sweeping issues like the legislative sexual-harassment scandal under the rug during their longstanding dominance in Frankfort.

“I can’t imagine a locker room anywhere that you would find this kind of behavior let alone from elected officials in the state’s capital,” said Bevin in reference to the legislature’s recent settlement of a lawsuit by staff members claiming harassment by Democratic House members. “How shameful that we’re in a situation that we had to settle such a thing.”

Bevin and other Republicans at the dinner spoke about conservative values. “We need to stop apologizing for the Christian principles, the great American values that make this country great,” he said to applause.

Conway, at the Graves County Democratic breakfast, accused Bevin of not applying his Christian morals to his policies, saying that ending the Medicaid expansion that serves more than 400,000 would not be a Christian thing to do, and that voters should elect someone who “understands that the truly Christian thing to do is to say that we are our brother’s keeper and healthcare for our people makes us a healthier and better society.”

Bevin said for months that he would end the Medicaid expansion, but during and after a forum with Conway this week, he said he would transition the expansion clients to a less expensive program, perhaps like Indiana’s, in which clients can pay premiums to get better benefits and get refunds if they don’t use the benefits.

Conway based his message at the Democratic breakfast in Mayfield on whom voters could trust come November.  He painted Bevin as an untrustworthy New Englander, a similar strategy used by Republicans last year when Bevin challenged U.S. Sen. Mitch McConnell.

Democratic Gov. Steve Beshear accused Republicans of trying to “put one over” on Kentucky citizens.

“Just last year they said, they told everybody in Kentucky that Matt Bevin was an east coast con man and a psychological [sic] liar.  A year later, all at once, they’re telling us he’s somehow worthy of being governor,” Beshear said. “I believe in recycling as much as anybody, but this is ridiculous.”

He added, “The values that I was brought up with here by my dad and mom, those values of faith, family and hard work, are the same values that we instill in our two sons Jeff and Andrew.  And now those same values are being instilled in our grandchildren. And I’ll tell you something, when you instill those values and you care about people, you end up being a Democrat.”