Kentucky’s Bad Blue-State Habits

Kentucky Governor Andy Beshear speaks during swearing-in ceremony in Frankfort, Ky., December 10, 2019. (Bryan Woolston/Reuters)
As other states adapt and improve, federal funds and a Democratic governor keep the Bluegrass State stuck in the past.

There must be some amount of detachment from reality required for a Democrat to serve as Kentucky’s governor.

Andy Beshear — elected in large part as the polite alternative to his whip-smart, sharp-elbowed predecessor Matt Bevin — is fighting a rearguard action with the barely resuscitated remains of the old blue-dog coalition that once reigned supreme in the Bluegrass State. Beshear’s buoyed by the partisan progressive moment in Washington, D.C. The federal-spending spigots, first opened in the initial fit of COVID panic, are now on full blast and drenching states with federal aid.

When asked about the latest windfall filling Kentucky’s state coffers, Senator Mitch McConnell answered, “I’m sure they love to have it. But I don’t see that they needed it.” McConnell was right. Kentucky will finish its fiscal year with a historic surplus.

Beshear disagreed, arguing the federal “stimulus” was crucial to create jobs and to end the recession. Kentucky’s unemployment rate is 5.2 percent, down from a pandemic peak of 16.9 percent. Service industries are struggling to find workers in what’s fast becoming a tight labor market.

Beshear isn’t an ideologue. He does, however, subscribe to the idea that the best dollar spent to stimulate the economy is a dollar redistributed through government. Beshear’s 2021 budget proposal was full of new spending, characterized as “one-time investments.” In reality, they would have been long-term, recurring commitments.

When Kentucky Republicans, who hold supermajorities in the state legislature, rejected most of the governor’s wish list, Beshear and his liberal allies complained that Kentucky was missing out on a historic opportunity to spend more. Their cries of “austerity” continued even after the state received another $2 billion in the latest round of federal stimulus.

What Beshear ignores — or is ignorant of — is the fact that Kentucky already has one of the highest per-capita government spending levels in the nation, far exceeding “blue states” such as New Jersey and Michigan. Though considered a solid “red state” because we vote for Republicans in presidential elections, the truth is that the size and scope of Kentucky’s state government is more like those in New York and California than in Alabama or North Carolina. Government spending is the lifeblood of redistribution, and Frankfort spends with the best — or rather, the worst — of them.

Culture permeates politics in a small state like Kentucky. Republican majorities in the legislature engage in their own form of redistribution by dishing out corporate welfare through the tax code. Their most recent show of favoritism showered $75 million on the film industry, $6 million to a hospitality hedge fund renovating a luxury hotel, and $1 billion over 30 years for urban redevelopment through an unaccountable tax-increment-financing scheme.

Meanwhile, Tennessee provides clear and convincing evidence that embracing economic freedom generates much faster economic growth and wealth creation. Kentucky’s elected officials have seen the Volunteer State’s fortunes rise, both literally and figuratively, while their home remains mired in the bottom ranks of growth and overall well-being.

What’s been missing in the analysis of the problems facing Kentucky is an understanding that decades of Democratic control ingrained redistribution as the organizing principle of state government. Following in the footsteps of our neighbor to the south would mean rejecting the status quo and upsetting powerful constituencies that rely upon it. But it would pay off in the long run with higher standards of living for average Kentuckians.

Red states can be blue, too. That suits Andy Beshear just fine. The bigger question is whether Kentucky’s Republicans are up to the task of realigning us with the most successful red states favoring limited government as their first priority.

Andrew McNeill is the former Kentucky deputy state budget director and a visiting policy fellow at the Bluegrass Institute for Public Policy Solutions.


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