The repeal of Kentucky’s certificate-of-need is an idea whose time has come
Politics is based on the exchange of ideas. So, there’s nothing more powerful than an idea whose time has come, and there’s no better example of that than the repeal of Kentucky’s certificate-of-need (CON) laws.
Heightened scrutiny of CON’s decades-long rationing of healthcare arrived with the 2022 election. Rep. Marianne Proctor, R-Union, and Sen. Gex Williams, R-Verona, were elected as change candidates, willing to challenge the status quo that prioritized special interests over the voters.
Both filed legislation to repeal CON in the ’23 session; both were instrumental in getting a legislative task force appointed to dive into the issue during the interim period.
That task force finished its work last week, issuing a short memorandum that largely summarized the arguments made by the various groups who offered testimony. Its sole recommendation was that “further study (is needed) to guide regulatory and statutory changes in Kentucky’s certificate-of-need program.”
It’s an unusual, yet revealing, conclusion to six months’ worth of work. The task force basically said certificate-of-need is complex with both strong arguments favoring repeal and legitimate concerns surrounding the consequences repeal might bring.
An undercurrent in the debate has been the significant differences between rural and urban health care delivery in our state. In northern Kentucky, certificate-of-need protects St. Elizabeth’s ironclad grip on the market. In smaller counties, CON is seen as a guarantor that local hospitals can continue to provide vital services in local communities.
Certificate-of-need isn’t quite a gordian knot, but it is a policy challenge that will require careful consideration to untangle.
The issue is ripe in northern Kentucky in a way that puts it at the center of the regional agenda. At one of the last task force meetings, Sen. John Schickel, R-Union, said now that the financing of the Brent Spence bridge construction has been resolved, certificate-of-need is the topic he hears the most about from constituents.
Schickel, who is retiring from the state Senate at the end of 2024, is committed to continuing the work on CON reform up until his last day in office. Opponents of reform are no doubt equally committed to defending their point of view and, in St. Elizabeth’s case, its regional monopoly.
The task force’s recommendation to continue studying the issue is sensible. It’s an opportunity to further educate the public about what exactly certificate-of-need is and to bring together constructive ideas about a path forward.
Unpacking the rural vs. urban dynamic should be a primary objective. A one-size-fits-all solution might be too much, too fast for rural lawmakers to accept. That could hinder progress for healthcare markets that are ready for more competition.
Pursuing principled policy in the face of powerful special interests takes time. The compelling argument is on the side of reform. The more the pro-market side keeps the certificate-of-need defenders defending their position, the clearer it becomes CON supporters are prioritizing their narrow interests over providing Kentuckians with greater access to quality healthcare.
Andrew McNeill is president and senior policy fellow at the KY Forum for Rights, Economics & Education (KYFREE), the leading free market think tank in Kentucky. He served in the Bevin administration as the Deputy State Policy and Budget Director. His email address is amcneill@kyfree.org
KYFREE applauds legislative efforts to reform certificate of need laws
For immediate release: Tuesday, January 9, 2024
The Kentucky Forum for Rights, Economics and Education (KYFREE) issued the following statement in support of legislative efforts to reform Kentucky’s certificate of need (CON) laws.
Kentuckians deserve more healthcare options, higher quality healthcare and lower costs. To those ends, we endorse the bold efforts from Rep. Marianne Proctor, R-Union, to modernize the antiquated CON laws that restrict the availability and expansion of critical medical services in Kentucky.
As the leading advocates for free-market principles in Kentucky, KYFREE is committed to empowering patients with a wider range of options and safeguarding our fellow Kentuckians from the undue influence of special interests within the healthcare industry. CON laws trap patients in a system with limited choices and higher costs due to incumbent providers' ability to stifle competition. Rep. Proctor’s efforts are a crucial step towards full repeal. We urge the Kentucky legislature to stand with patients and taxpayers by prioritizing much-needed reform.
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KYGA 2024 Kick Off
Legislators reconvened in Frankfort this week to commence the 2024 legislative session, during which 256 bills have already been filed as of yesterday.
Below are some highlights: legislation that aligns with KYFREE’s policy principles is highlighted in green; legislation that contradicts our principles is highlighted in red.
Establishes a one-time pension COLA for state retirement employees
Allows universal recognition of occupational licenses and government certifications
Establishes limitations on use and sale of data captured by automated license plate readers
Allows homeschool students to receive KEES based on standardized scores
Defines "government" and "substantially burden” in terms of religious liberty; outlines relief that may be sought if government violates religious liberty
Expands parental rights in schools
Establishes the Tax Expenditure and Economic Development Incentive Review Board to evaluate tax expenditures and incentives awarded by the state
Constitutional amendment allowing the GA to reduce or eliminate property tax
Expands protections for students and teachers from being discriminated against for refusing to endorse a divisive concept
Raises minimum wage to $15/hr
Makes it easier for an individual to create a petition against a local property tax increase
Reestablishes the Certificate of Need Task Force
General Assembly’s plan to lower income taxes is working “precisely as intended.”
The Office of State Budget Director notified the General Assembly this week that the criteria to further reduce the state income tax had not been met. Liberal organizations that oppose any effort to reduce the tax burden on Kentuckians are attempting to attach a negative spin to this development.
However, Sen. Chris McDaniel, R-Ryland Heights, hits the truth in the Herald-Leader’s reporting:
Co-chair of the Interim Joint Committee on Appropriations and Revenue, Sen. Chris McDaniel, R-Ryland Heights, said the bill is working “precisely as intended.”
“By December 2024, income tax reductions in 2023 and 2024 will have saved taxpayers $1.8 billion,” McDaniel said in a statement Thursday afternoon. “Naysayers have often criticized comprehensive tax reform and the Kentucky General Assembly’s responsible lowering of working Kentuckians’ income taxes. However, this development is evidence we appropriately weighed the importance of lowering taxes with the need for critical government functions such as education, corrections, and more.”
Even Gov. Andy Beshear, who vetoed HB8 when it was on his desk, is saying (as he fights for re-election) that the legislature established “a responsible method for determining when to take — they’re not incremental steps, they’re real steps — in reducing income tax.”
Beshear’s opponent, Attorney General Daniel Cameron, has made eliminating the state’s income tax a central part of his economic platform.
When asked by the Herald-Leader for comment on the state budget director’s report, Cameron said “(his) bottom line is to get zero as quickly as we possibly can.”
-AM
Frankfort’s fiscal responsibility is a remarkable pivot from the past
KYFREE op ed published in the Lexington Herald Leader 8/20/23 print edition.
Lexington Herald-Leader 8/20/23
3 companies secured $220.4 million in single-bid contracts from KYTC
During the first six months of 2023, three Kentucky road contractors - Scotty’s Contracting, Mountain Enterprises and L-M Asphalt Partners - secured $220.4 million in single-bid asphalt-related contracts awarded by the Kentucky Transportation Cabinet. A complete list of the successful single-bidders is below.
Lack of competition for KYTC’s asphalt contracts costs taxpayers $46.9 million in first six months of 2023
The following information was provided to the General Assembly’s interim Transportation Committee today:
As the interim Transportation Committee starts its work this year, I wanted to bring to your attention my analysis of the Transportation Cabinet's single-bid contracts for the first six months of 2023.
The approach has been updated to more carefully consider the impact the lack of competition has on the large number of asphalt-related contracts awarded by KYTC. In the first six months of this year, the lack of a second bidder costs taxpayers $46.9 million more than if there was competitive bidding for those projects. That's $46.9 million that cannot be allocated to additional projects in member's districts or other transportation and safety needs for Kentuckians.
From January through June, KYTC awarded 197 single-bid asphalt-related contracts totaling $358,338,725. Those awards were compared against a competitive scenario (which is described below and in the attached spreadsheet) to determine that the industry's bids were $46,918,142 higher than if a second bidder bid on the projects.
As always, a lot of effort is made to ensure the data from KYTC’s publicly available information are accurately entered into the attached spreadsheet. I welcome feedback from the cabinet, the industry or anyone else if there are mistakes.
- A.McNeill
General Assembly was right to end taxpayer subsidy of teachers’ unions politics
Kentucky’s students are struggling. COVID-related school closures and remote learning resulted in tragic learning loss and unprecedented childhood mental health anxieties. More than half of the state’s fourth and eighth graders can’t read at grade level. Scores for minority students are much worse, especially in our urban school districts.
Even with these challenges, it’s telling that Kentucky’s teachers’ unions focused much of their lobbying efforts in the 2023 legislative session on preserving the use of taxpayer-funded payroll systems to collect membership dues. It’s only the latest example of the unions elevating their interests over children and the taxpayers.
In years past, the teachers’ unions have fought against empowering parents with choice in their child’s education, rallied against pragmatic changes to our state’s collapsing pension systems and opposed tax reforms that let Kentuckians keep more of what they earn.
Make no mistake, the teachers’ unions primary mission is politics. While Kentucky’s educators may think their dues are used to support them in the classroom, a significant portion is sent to the National Education Association (NEA), which in turn, spends those dollars supporting liberal political candidates and progressive policy organizations.
According to Americans for Fair Treatment, in 2020-21 the NEA spent $374 million. $66 million went to political activities; another $117.8 million went to ‘contributions, gifts, and grants,’ spending that is also largely political in nature. Only 9% of their spending was on ‘representational activities,’ or money spent directly to assist their members.
By joining the union, Kentucky’s teachers are required to fund political speech they may not support. To address this, Senate bill 7 (enacted last session) will require unions to provide their members with an annual report detailing their spending. Employees will now be aware of how their dues are being used, allowing them to make informed decisions about whether to continue supporting these organizations’ political activity.
The legislation also prohibits the use of government payroll systems from collecting and transferring a teacher’s membership dues to the unions. Nothing in the law prevents a teacher from joining the union. In fact, in legislative testimony the head of the Kentucky Education Association shared that their organization’s website is already set up for online enrollment and dues collection. The new law simply gets government out of the middle of the transaction.
Legislators exempted organizations representing police and firefighters, expressing their appreciation for the hazardous nature of those professions. Unlike the intensely political teachers’ unions, the Fraternal Order of Police and the Professional Firefighters Locals take a non-partisan approach in their advocacy.
The legislature also established the Educators Employment Liability Insurance Program, which, when funded in next year’s budget, will provide liability insurance to all certified employees of Kentucky public schools. Teachers have historically relied upon the unions for liability coverage, but policymakers recognize this is a legitimate state function and now have the framework in place to provide this important protection for educators.
Kentucky’s teachers’ unions have been a political force in state politics for decades – and almost certainly will continue to be. At least now, taxpayers won’t be forced to subsidize the roadblocks they throw up against the efforts we must make to help our struggling students.
Sarah Durand is VP for Government Affairs at KYFREE and former Chief of Staff to First Lady Glenna Bevin. Andrew McNeill is President of KYFREE and former Deputy State Budget & Policy Director.
Originally published in the Frankfort State-Journal 6/26/23