Published: January 10, 2007 08:35 am         

How to spend the surplus

Pulaski Countians want money to flow into retirement system

Pulaski County has spoken: Retirement is the most pressing issue facing the community — and the state’s projected $279 million surplus can come to the rescue.

In Monday’s town hall meeting at The Center for Rural Development, Gov. Ernie Fletcher took suggestions from locals — as well as concerned citizens and officials in other sites around the state teleconferencing into the meeting — as to what Kentucky should consider doing with its fourth-consecutive budget surplus, the highest yet.

In a poll — a show of hands — as to which of the governor’s eight pre-considered options the gathered community members preferred, beefing up public retirement programs came out unequivocally on top, with 45 votes as “most important.” A distant second was a ninth-option tacked on after hearing audience members speak: various community needs, with 14 votes, and another popular subject: investing in public schools, with 13 votes. Broadening access to health care and making college more affordable garnered eight and five votes respectively, while saving it for a rainy day and returning it to the taxpayers had none from the local assembly — the last option’s lack of popularity a real surprise to Fletcher and his staff, who noted that “It’s your money.”

The other choice, increasing social worker safety, was deemed by Fletcher to be “a must-do” anyway, following the October death of Boni Frederick, a murder case which shook the state.

Ray Brittain spoke on behalf of the Kentucky Retirement System, saying that the state has long underfunded those programs, which has created a “critical” situation for not just present retirees but those coming in the future.

“The state has a responsibility to honor commitments and promises made to present employees and past employees who are presently retired,” said Brittain. “We think that there’s no greater urgency ... nothing more important than pumping up the system before this thing dies.”

Also suggested was using some of the budget surplus to return money borrowed from Kentucky’s retired teachers.

Fletcher recognized that he had retirement as the “very No. 1 issue” facing Kentucky that could benefit from the financial boon, and noted that money borrowed reduces the ability to earn money.

“We’re bound and determined to make sure we strengthen the retirement system,” said Fletcher.

State Rep. Jimmy Higdon also jumped on the retirement bandwagon, stating conveniently that it was one of three key priorities for the state legislature, along with restoring funding of projects previously vetoed by the governor and contributing to the state’s “rainy day” fund.

That revenue surplus, right now, is merely a projected one. State Budget Director Brad Cowgill explained that the most recent quarterly report tracking receipts over the course of a year — one that gives effectively a 12-month projection by analyzing the previous three months as well as forecasting the coming nine — turned up what is expected to be $279 million more available than the previous budget expected.

“A projected surplus and an actual surplus are two different things. We have had three actual surpluses; we don’t know the actual amount until the fiscal year is ended and we’re actually counting money,” said Cowgill. “It’s not money in the bank yet, but it represents our best effort at this point in time as to where we end up by end of the fiscal year on June 30.”

Cowgill said that though his office is required to produce such a projection, the official revenue forecast used to plan the budget is done by use of an independent agency, the Consensus Fore-casting Group.

“That group last came to Frankfort in December of 2005 and it’s their projection that we’re comparing to when we came up with the $279 million figure,” said Cowgill. “The difference is that our estimate has been made a lot more recently, and we have access to information we didn’t have available when they made theirs.”

Cowgill noted that the people of Kentucky should have the opportunity to communicate directly to the governor what should be done with the unexpected funds, and observed that retirement is indeed a problem from his office’s point of view.

“Both (the Kentucky Teachers Retirement System and the Kentucky Employee Retirement System) have been valued recently, and value of the benefits have been found to be considerably greater than value of the assets,” said Cowgill. “Gov. Fletcher wants to strengthen the financial integrity of those two retirement systems and has stated his intention to use part of the surplus to make deposits into those systems and bring a higher level of balance to those systems than currently exists.”

Interestingly, retirement was one of the few items Fletcher didn’t tout as having seen marked improvement during his time in office. Among the highlights Fletcher pointed out: education funding has increased by 25 percent; client-intake meeting for high-tech jobs have been boosted by 86 percent and new high-tech companies in the state have risen 240 percent; and the revelation that December was the single-highest period of economic growth in state.

Among the other citizens who had their voices heard at the forum, Mary Susan Thompson was very eager and vocal in once again making her case for four-year Southern Kentucky Univer-sity, her suggestion immediately familiar to the governor; Bill Neikirk asked about the possibility of a county-wide sewer system; Darrell BeShears spoke on behalf of suicide prevention program funding; and Charlotte Stogsdill of NAMI (National Alliance on Mental Illness) did the same to request financial assistance and attention to transitional housing for the mentally ill out of hospitals; Jerry Bailey of CASA (Court Appointed Special Advocate) asked about the best way to apply for funding; and Dennis Wilson suggested aid for vocational schools and training for students. Some of those prompted the category of “community needs” to be added to the overall vote for what is most important to the citizens of Pulaski Coun-ty.

Other sites that beamed in to ask their own questions and make requests were Lexington, Louisville, Henderson, Glasgow, Camp-bellsville, Cynthiana, Mays-ville, Prestonsburg, and Hazard. Many of them asked for money for their own specific projects; others echoed the greater social needs mentioned.

“The budget is a noble business,” said Cowgill. “Our objective is to try to find that balance budget. It’s a balance of objectives and dreams.”

     

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