March 18, 2007

My name is Bill Huff. 

I am a retired Kentucky Revenue Cabinet veteran (29.5 years) and worked under both political party administrations. 

After retiring, I focused on enhancing my personal efforts to finish what I started while working as a state employee; i.e., locating, identifying, assessing, billing and collecting from mis-registered Kentucky motor vehicles. 

I consistently emailed all Governor’s and Kentucky lawmakers at one time or another about motor vehicle usage, property and u-drive it permit tax evasion.  For the past 18 years I’ve only had three elected stewards even reply to me.  However, no demonstrated action has been undertaken at the writing of this correspondene (July 15, 2012).  

I began asking elected stewards to make an effort to influence current that are now past Governors’ to direct their Transportation Cabinet (where Division of Vehicle Enforcement Officers resided who had statutory authority to carry out statewide titling and registration compliance along with property staff of Revenue Cabinet) to locate, identify, value, bill and collect from these tax evaders. Brown, Collins, FLETCHER, Wilkinson Administrations made an effort while others shunned efforts.

During 18 years I’ve continually asked elected steward to follow 1995 Long Term Policy Research Center’s recommendations concerning Kentucky's obsolete tax base and continuous record setting appropriation growth; i.e., 1994 appropriation average growth rate was 6.0% while 1994 resource average growth rate was 5.3%.  Long term policy research center published document saying if nothing done by 2004 appropriations would exceed resources by 12%! 

In the middle of my career it became obvious bureaucracy is reflected by state management.  During my career state management never fully was able to encourage motivated employee because management philosophy was held back.  Excuse was not enough funding. 

Governor Brown’s election signaled a different management attitude!  However, his efforts was sabatoged by legislative management; i.e., he was able to pass WPPR legislation passed (employee valuations by management laying groundwork for incentive pay while weeding out unproductive employees) but legislature never funded program. 

Evidence exists all current state agencies do not have adequate compliance policies for controlling   vacation, sick and comp time leave.  Evidence is pointed out in state records covering a period from ’95 through ’98.

This state employee perk has questionable supervisory compliance.  For example, Kentucky state records depicted from ’95 to ’98 forty state employees---most of them employed by the Transportation Cabinet---being paid $40,000 or more in compensatory time.  Under Patton Administration positions created called---assistant principal position---starting out around $64,000 per year---after Courier Journal uncovered this stealth approach we were told it was abandoned.  I kind of doubt it and bet it’s under another name in this current administration.

In early 2000 it was estimated 58 percent of employees nationwide get any paid sick leave---while Kentucky’s state employees accumulate sick time.  In addition---the 2001 General Assembly passed legislation allowing state employees to be paid for all unused annual and compensatory time. 

Therefore, any legislation addressing state employees’ retirement plan must mirror the following protections for taxpayers:

FUND Pay-for-performance for all merit state employees & cap current non-merit total pay          $100 million dollars less than current total transferring into merit pay budget

ELIMINATE excess layers of management and place more emphasis on direct service employees

ELIMINATE layers of management and reallocate staff to direct service positions

ESTABLISH a new personal management cabinet

FREEZE and abolish current and future vacancies that are not considered critical or high turn-over positions and re-engineer those jobs kept

RETRAIN staff and award pay increases to job holders whose positions receive

added duties from re-engineering process

MOVE from a "defined benefit" to a "defined contribution program" for new state employees

MERGE administration and support services of Kentucky employees retirement Systems:

County employees retirement system

State police retirement system

Teachers retirement system

KRS Employees retirement system

State Government establish management training program for attendance by all state managers/supervisors

Train state management to use motivation and incentives to equalize workplace duties, responsibilities and pay

For new hires follow lead of industry by replacing defined benefits with contribution  retirement plans beginning January 1, 2013 

Protect state employees’ defined contribution retirement plan by legislatively establishing a mandatory savings plan for each state employee whereby state employee contributions matched by state up to a defined maximum and state will automatically pay base health care plan giving state employee option of adding applicable health care options at their own expense 

Amend Finance Cabinet KRS to separate Department of revenue from Finance Cabinet.  This separates the tax collection state agency from state agency that pays the staet’s bills, eliminating any hint of impropriety.

Eliminate ill conceived practices such as "raids" by lawmakers’ on the Road Fund to balance General fund deficits. Such administration robs state Road fund dollars from participating in Federal/State match monies.  Has cost state road fund more than $2 billion dollars in past.  See Jack Fish, former executive director of Kentuckians For Better Roads 1995 Lexington Herald article.

In 1965 on the heels of the Kentucky Court of Appeals decision dated June 8, 1965 wherein Court ruled all property fractional assessment valuations were unconstitutional, directed state to being January 1, 1966 to revalue all property at fair cash value. A large number of job applicants were hired---as I was---to be trained to assist in implementation of June 8, 1965 Court of Appeal Decision styled Russman vs. Luckett. 

From 1966 through 1980 there were numerous legal challenges. Revenue Cabinet who was charged with enforcement could not achieve any semblance of fair market value assessments until 1980.

The Cabinet was sued in 1980 by large percentage of the 120 locally elected statutory officers called Property Valuation Administrators (PVA). PVA’s wanted Court to force State to assess property rather than PVA’s. Kentucky Supreme Court ruled otherwise. The Court dictated a political and administrative settlement placing authority with Cabinet over statutory officers and responsible for implementation and maintenance of such 1965 Court fair cash value decision.  PVA’s had responsibility to assess all property within their jurisdiction at fair cash value under supervision and leadership of Department of Revenue wherein both parties were to work together in doing so. 

At the time I was Director of Property Tax and carried out all testifying and issuing directives and leadership to see court’s mandate was implemented. I held paychecks of any statutory officers who refused to comply with Revenue Cabinet’s dictates to implement statewide fair cash value assessments, which was part of the motivation for PVAs to use court.  Some semblance of fair cash value was achieved in the early 1980’s.  Later on the 1994 Commission On Quality & Efficiency located millions of state expenses to consider cutting.  One of those cuts would save estimated $40 million by reducing number of statutory Property Valuation Administrator’s officers from 120 to 50.

Prior to the 1980 suit and it's fallout, the Farmland Use Act and Homestead Exemption for 65 year olds and older were passed and implement!

This has been the case since 1984---tax evaders celebrating their 23^rd year-2^nd month and 17^th day not paying their fair share! As long as state tax agencies [State Police Commercial Enforcement Officers] do nothing to make sure all Kentucky owned motor vehicles are titled & registered so Department of revenue can locate, assess, bill and collect from these tax evaders, these tax evaders will continue to operate FREE on KY highways without consequences. 

The personal lobbying effort contains a request made to eliminate the weight-distance tax on Kentucky trucks simply because state is not administering it fairly.  As far back as  1994 the Legislative Record referred Legislative Record, Dec ‘94, p #37) to Transportation Cabinet's  28% tax evasion factor among weight-distance tax truckers.   As far as I know it’s still there in 2007!

At that time, 28% tax evasion factor amount to an estimated $20,000,000 not being collected! The thinking was lost weight-distance tax revenues could be recouped by enhancing motor fuels and truck registration fees, making it a “revenue neutral” tax policy endeavor while leveling the tax burden on all Kentucky truckers!

Also, I have been lobbying appointed and elected Kentucky officials to eliminate a significant part of State’s Medicaid deficit by state seeking a federal Medicaid waiver to fund Medicaid eligible seniors’---who do not need skilled nursing care---so their housing could be made up of home, assisted living facilities rather than nursing home. The assisted living industry should be asked and be willing to accept minimal state assisted living regulations in return for state’s efforts to seek federal Medicaid waiver!  State’s savings would come from state’s paying an estimated $61.80 per day for independent and/or assisted level of services or an estimated $82.00 per day for assisted living facility & or home care compared to $275.00 per day for nursing home care.  If Kentucky would petition for Federal Medicaid Waiver authorizing all Medicaid eligible recipients to use Medicaid dollars for assisted living stay, state’s Medicaid expenses would be significantly reduced.

Such an approach to “good government” may cause political fallout, but if Kentucky continues to spend, spend, spend as it has since 1994 doing nothing to balance state expenses with state resources while feds continue passing their expensive programs to states like Kentucky, Kentucky will fast become a 3^rd World economy. 

Therefore, I hope you can and will review and consider, at least, some of the above recommendations that I’ve kept on the radar of legislators over the past 18 years! 

If you have the opportunity please refer to these articles:

Sunday, November 15, 1987

Section: CONTEXT Page: D1

By: By Jamie Lucke

Herald-Leader education writer

Shakertown Roundtable Discussion

Two Kentucky’s for economic development purposes

THINGS TAXPAYERS’ OUGHT TO KNOW!

From: Kentucky Long Term Policy

The 2000-02 State Budget: Analysis and Review

Ron Carson

Foresight, Vol. 6, No. 4 published 1999

For Kentucky’s sake I hope Governor & Kentucky lawmakers will pursue some, if not all, of these recommendations championed by tax reform committee's motivation.