December 2001

Dec. 27, 2001
(Distributed to Kansas newspapers Dec. 24, 2001)

It's a rural legend

There's a new act in the continuing play of wills between big and little farmers that even city folk are probably going to find amusing in the upcoming legislative session.

It's a rural legend, one that is just like urban legends like tarantulas crawling out of a bunch of bananas, or a shopper being locked inside a department store over the Christmas holiday weekend.

The rural legend is that somewhere, sometime, a farmer under contract to grow chickens or turkeys or hogs or cattle or something, got crosswise with the big agribusiness that delivered the farmer baby livestock to grow to slaughter size. The legend goes that because the farmer turned out to be a pain in the side, or somewhere, for the big agribusiness, the farmer got delivered diseased or sickly livestock to try to grow to fulfill his contract with the big ag outfit, and was ruined.

Did that ever happen in Kansas? Well, there's no hard evidence that anyone will talk about or would share with the Interim Committee on Agriculture, but it's not too farfetched to be impossible.

Sorta like those urban legends, only where the major players in the deal are wearing boots instead of loafers. Surely somewhere sometime a tarantula did wander out of the banana bin at a grocery store, and surely someone fell asleep in a dressing room at a department store and was locked in overnight.

So, the Legislature next session is going to consider a bill that would allow farmers to refuse to accept sick or diseased animals that they are delivered to raise under contract to a big agribusiness. This is tricky now because nobody, remember, has actually told legislators publicly that they've gotten sick or diseased animals to raise. But everyone has heard of someone who did.

And it gets more complicated because it doesn't look like anyone knows for sure whether a farmer can't have his own veterinarian inspect animals that are being delivered by a big business that the farmer is essentially working for. Nobody knows that a farmer can...either. But one would expect that if a big business was dropping off sick little chickens or turkeys or piglets or calves, the big business probably wouldn't be eager to have the livestock inspected.

It would be a little like a dinner guest asking his or her host to eat first to make sure the food is wholesome.

This might--or might not--be a big deal.

Consider that the businesses that hire farmers to raise livestock want to get that livestock back, healthy and ready for market.

So, initially, it doesn't sound like any big business would have much interest in delivering sick or diseased livestock to contract growers, does it? But we're dealing with a weird industry here, one where many contract growers are told not to discuss their contracts with other contract growers.

Big packinghouses that contract out the growing of their livestock are likely to be insulted by the mere consideration of the bill. But, how do they lobby in favor of the right to deliver sick or diseased animals to contract growers? Anyone for that right?

And, will contract growers of livestock want to testify--and reasonably prove--that they've been delivered sickly animals to raise? Animals will get sick, of course, just like all creatures, and farmers, after all, are supposed to be talented at growing healthy livestock because if they can't do that, they shouldn't be farmers, and probably shouldn't even be babysitters.

So, is this a big issue? It is to increasingly politically active small farmers who maintain they can't get decent prices for their livestock, or who believe that they are not being treated fairly as contract growers after they've invested money in specialized farm buildings and bought specialized equipment that they're still paying for.

It's just the sort of issue that hard-pressed rural legislators might see their city brethren support, because even if it is just a myth, it doesn't sound fair.

Dec. 20, 2001
(Distributed to Kansas newspapers Dec. 17, 2001)

A budget crisis...

We're now in the week in which Kansas citizens are expected to buttonhole their state senators and representatives and tell them that they as voters won't abide the at-least $426 million in budget cuts that Gov. Bill Graves will recommend to the Legislature on Jan. 14.

Graves has painted a bleak picture, wholesale cuts in spending on almost everything: K-12 education, higher education, social services and highways.

And, to further energize the crowd in Topeka where you can't swing a cat without hitting a state employee, no raises.
But, bad as the picture looks, there are some aspects of it that appear to be largely bluster, and just a dab of questionable, if not outright bad, faith in dealing with falling revenues by the governor.

Let's start with the fact that the governor didn't wake up last week, hours before his press conference at which he unleashed his dire economic news, with an epiphany that Kansas finances are in trouble.

When the Consensus Revenue Estimating Group announced in early November the probable revenue shortfall for the current fiscal year (FY 2002) and the coming fiscal year (FY 2003), Graves did nothing.

Now, we'd suppose that most bucket-carriers who noticed that their pant leg was wet would look at the bucket to see if it was leaking. They'd probably consider fixing the leak, rather than turning the bucket so the stream of water didn't hit their leg.

Graves essentially turned the bucket. He could have rallied his agency chiefs, had them come up with current-year budget cuts, put them into a recision bill and had it passed on an emergency basis at an emergency legislative session by Thanksgiving.

Reason he didn't take emergency action?

His cabinet secretaries, he says, would rather see the pain of a sharp budget cut focused in a single fiscal year--that's next fiscal year, July 1, 2002, to June 30, 2003--than spread out over 17 or 18 months.

So, sure, this is a crisis, but it's one that is worse than it had to be.

And, the immediate response to the impending crisis was, well, no response.

OK, the current bucket is still leaking, but that aside, it doesn't mean that there isn't a significant budget problem to be dealt with by the 2002 Legislature.

Graves proposes the spending cuts necessary to make the next budget fit with the money predicted to be available for the state to spend in the upcoming fiscal year. The tally of $426 million in needed cuts includes some that are serious, some that aren't as serious, and some that are window-dressing.

Biggest target, one that amounts to almost one-third of the governor's list, is not transferring $147 million in state sales tax receipts to the Kansas Department of Transportation. That's a lot of money and it means that some projects that were planned for three and four years from now won't be done. In the next two construction seasons, there will be minimal reductions in work, and when times get good again, that $147 million will probably flow back to KDOT. It's serious business to be sure, but not serious enough that highway contractors are immediately going to have to shift their children into state colleges.

A cut of $27 million for higher education spending is serious, too, but there are tuition increase possible to mitigate the damage.

It won't be pretty, but don't look for any schools to close down. Professors might have to wait until the elbows of their sport coats are actually worn before affixing leather patches, instead of buying coats new with the patches already installed. A $37 million cut in special education spending is serious, but costs there are starting to level off; and lower enrollments in schools should save the state some money. That's not an end-of-the-world affair.

A $19 million item, replacing state general fund spending with money from the federal senior services trust fund, may be almost transparent to most Kansans, and won't really show up as a budget issue for another year, when the state is wringing the last dollars from that federal program.

That's what...about half of the $426 million...and remember, Graves is hoping for maybe $200 million in revenue enhancements from the next Legislature.

Now there is a serious item left on the table, that matter of reducing the state aid per K-12 pupil by $158, to $3,712 from the current $3,870. The $91 million item means that legislators who were astonished to learn that the state is spending $115 million more than surrounding states on non-instructional personnel will have good reason to tell schools to shuffle priorities on spending, in essence writing many school districts' budgets from Topeka. Legislators have been eager to do that for years.

Nope, this budget deal hasn't played itself out by a long way.

Dec. 13, 2001
(Distributed to Kansas newspapers Dec. 10, 2001)

A no-brainer?

One of the biggest decisions that Insurance Commissioner Kathleen Sebelius has had to make in the first seven years of her operation of the Insurance Department is coming due in the spring before she is expected to run for governor.

The decision--whether to let Anthem Insurance Cos. of Indianapolis, Ind., buy Blue Cross-Blue Shield of Kansas.
It's a decision that on one hand looks like a no-brainer.

Anthem, which has bought Blue Cross-Blue Shield companies in a handful of states and is moving toward becoming one of the nation's biggest health insurers, has already fired off a significant shot in its effort. More than 170,000 policyholders have received information packets about the buyout. Those policyholders have been told they'll receive hundreds of dollars if they buy their insurance for themselves, or thousands of dollars if they are companies that purchase group health insurance for employees.

There's nothing like the promise of a nice-sized check to perk up interest in thousands of households and businesses across Kansas. The question comes down to "what's not to like about getting a free check?"

Well, it turns out there are some things not to like, but they are pretty complicated. It's not quite the "lady or the tiger" decision of the fable, but it is a real question.

You see, Sebelius has to make her decision on the sale based not just on whether the Blues and Anthem are fairly valuing and then splitting up the value locked up in the owned-by-policyholders Blue Cross, but also on what effect that sale will have on the market for health insurance in Kansas and on policyholders.

If it was just a matter of the money, well, the decision would be made and the checks would likely be in the mail by now.
It's the future that is the troubling part of this equation.

And, look who is raising troubling questions about the future of health insurance as we know it in Kansas... the people who have been receiving checks from Blue Cross-Blue Shield for more than 50 years.

Remember, it was doctors and hospitals who originally supported the formation of the Blues years ago as a method to make sure that their customers had the means to pay their bills to doctors and hospitals. So, making sure that those health care providers got paid was the charitable and benevolent idea behind the creation of the Blues.

But those health care providers now are deeply troubled by the possibility that an outfit as far away as Indiana might be doing essentially the same thing that locals were doing for the past half-century.

What are the complaints? Well, what if Anthem decides to shoot up insurance rates, so fewer Kansans are covered by health insurance and it takes longer for hospitals and doctors to get paid? What if Anthem decides to pay doctors less per procedure and hospitals less per day for caring for their customers?

What if all the surplus held by Blue Cross-Blue Shield was transferred from the company that was formed to make sure that doctors and hospitals got paid for their services to the people who buy the policies that make it possible for doctors and hospitals to get paid?

That's a transfer of money from the health care establishment to the people who paid for the buildings and computers and personnel necessary to make those payments to the faithful policyholders.

Is that a downside? It depends on whether you're writing checks to the Blues, or receiving checks from the Blues for your services, we Railsters figure.

What's the other piece of this equation? It's the unavoidable political piece. Doctors, whether they know anything about politics or not, tend to be pretty solid political contributors. They tend to hang out at the same clubs and civic theaters that politicians do, and they tend to support their friends who run for office.

Is that a factor? Sure it is. When the medical associations and hospitals and others in the health care industry oppose the buyout of the Blues by a far-away corporation it's something that an insurance commissioner has to consider.

Is this still a no-brainer? Apparently not. But it's going to be one of the most-watched decisions that Sebelius has had to make during her tenure as insurance commissioner. And there's no escaping that whether she allows the Anthem-Blues purchase to go through, or demands a restructuring of the deal, or flatly kills it, there are going to be a long line of bench-sitters who will second-guess her.

Dec. 6, 2001
(Distributed to Kansas newspapers Dec. 3, 2001)

A holiday party recipe

Here's a recipe for a Statehouse rumor:

Take one good, strong fact and mix it with hopes and/or fears, and season it by walking it around the Statehouse until everyone's heard it and repeated it.

Yield: One serving of genuine political intrigue.

Eleven months before the November 2002 general election, and just nine months before the Republican gubernatorial primary election, we are learning that Lt. Gov. Gary Sherrer has talked to people in Washington about a possible federal job...something to do with the Surface Transportation Board, which regulates, well, surface transportation.

Now, that's not unusual by itself. Governors and lieutenant governors travel to Washington frequently and they talk to people with the administration in power and sure enough, jobs are discussed.

Sherrer says he talked to Bush Administration folks about the Surface Transportation Board.

Was a job offered? Sherrer says no, but someone in Washington might get back to him, which means that he might have to consider whether he wants a job in Washington. Now, this is early-stage stuff, no FBI background checks or chemical analysis of Sherrer's house plants, just some talks.

Well, that's the fact, slim as it is, and when you walk it around the Statehouse, here's the lint it picks up.

If Sherrer takes that Surface Transportation Board job, well, he's gone from Kansas and would resign his lieutenant governor job and Gov. Bill Graves would have to, or at least could, appoint a new lieutenant governor.

Now, who is Graves' best friend in the Statehouse? Count on that being House Speaker Kent Glasscock, R-Manhattan, who, we recall, is the lieutenant governor running-mate of Attorney General Carla Stovall, who is running for the GOP nomination for governor.

Hmmm.

This needs a little more seasoning, so let's walk it around some more.

Say Graves does offer the lieutenant governor job to Glasscock. The governor figures that Glasscock can get a little on-the-job training as lieutenant governor, the job that Glasscock is running for, anyway. Glasscock gets new letterhead and business cards, and gets sent to little events around the state where a lieutenant governor is typically sent, such as funerals of precinct committeemen and committeewomen, and the grand openings of convenience stores and shoe shine stands.

If things happen quickly enough, and chances are they won't, it means that at least for some portion of the 2002 legislative session, Glasscock gives up his House seat and doesn't get blamed for everything bad--and everything not quite good enough--that happens in the reapportionment-frenzied, cash-starved House.

Now, isn't that intriguing?

So, maybe Sherrer takes a federal job. But, as a political critic of Glasscock, Sherrer isn't happy that Graves might choose Glasscock as Sherrer's replacement.

Now, what was that federal job again, something to do with surface transportation, as in trucks traversing federal highways? Now, didn't Graves recently take a job that is to start in January 2003 as chief of the National Associations of Motor Carriers?

Why, yes he did, and, golly, do you think he wants to start that new roughly $500,000 a year job with his industry's chief regulator mad at him? We're thinking probably not.

So, if Sherrer winds up with a federal job in Washington, well, maybe for a time, we see a little inside-inside political fight. Or, maybe not.

What happens if nothing works out for Sherrer? That he lives out his political career as lieutenant governor? Well, then put down the slim fact and the rumors and political buzzings as just a little pre-Christmas cocktail party talk.

But, it's not a bad hors d'oeuvre, is it?