September 2003
Sept. 25, 2003
(Distributed to Kansas newspapers Sept. 22, 2003)A contraceptive issue
Interesting principles are going to collide next legislative session over what amounts to 29 cents a month in health insurance premiums for Kansans.
The 29 cents is the best estimate of the additional cost of health insurance premiums if all Kansas health insurance policies include mandatory coverage for contraceptives for women.
One of the principles colliding here: Many women wanting the coverage and viewing contraceptives as a legitimate health care expense that their insurance companies ought to cover in lieu of women spending more than $300 a year on contraceptive pills. Proponents argue that on a cost-avoidance basis alone, the coverage is a bargain to employers whose insurance carriers will pay at a minimum $4,000 for the cost of the most simple and inexpensive childbirth, plus hundreds of dollars a year in lost productivity, and thousands of dollars if a woman becomes pregnant and leaves the workforce to take care of her child, requiring training and learning-curve costs of a replacement.
Those are all good arguments, but many pregnancies aren’t unintended, meaning that working women’s employers are going to have some childbirth costs, anyway.
Employers, at least those testifying before the legislative summer interim committee on insurance, say they are tired of mandated health coverages that drive up their insurance premiums. They are generally careful not to wade into the issue of whether contraception is a good thing or a bad thing; they just don’t want to further increase their health insurance premiums, which are already rising faster than nearly any other piece of overhead. Employers who don’t have that contraceptive coverage are pretty much stuck on the principle of paying no more money, regardless of the benefit.
The Kansas Catholic Conference, which represents the state’s Catholic bishops, has indicated that the church might just drop all health insurance coverage, or at least prescription coverage, on moral grounds if it is forced to offer its employees–Catholic and non-Catholic–the coverage. There’s a strong doctrinal history here about opposition to contraception...though it doesn’t extend to prescriptions for Viagra, which the church figures makes procreation possible, and the church is on record in favor of procreation, planned or otherwise.
Insurance companies, many now pay for contraceptive coverage, either through the basic policy or by added-cost rider, are pretty much in the middle. They want to do business in Kansas, they’ll do whatever the state demands, but they see the cost of their product rising as mandates are added to policies. And that makes it tougher to sell policies to employers. That makes some sense, too. So what happens next session?
Well, the Legislature likes to be business-friendly as much as it can. Nobody sets out to damage businesses, but there are some subterfuges that are possible for legislators. First, of course, is the moral issue of whether legislators believe in contraception, or at least, mandated health insurance coverage for contraception. Contraception itself is pretty much a personal decision by women, and the issue becomes whether the state should make that a no-cost decision for women.
Second possibility is for legislators to buy into the business argument that added insurance costs damage businesses and drive up the price of doing business in Kansas and will result in lost jobs and lost insurance coverage. That’s a tough position to take. It requires legislators who presumably have some experience in life to focus only on dollars, and a pretty picayune number of dollars at that. But, it could work if proponents of contraceptive coverage allow the discourse to be limited to costs alone.
If proponents of the mandate allow that to happen, they’ve made a tactical blunder. Notwithstanding tough economic times, business owners’ plaints about profitability, insurers’ warnings about rising insurance costs, this issue may have to be slugged out in committees and on the House and Senate floor in debate.
The issue is much bigger than 29 cents a month.
Sept. 18, 2003
(Distributed to Kansas newspapers Sept. 15, 2003)The pension problem
It’s just whispers so far, but there is this growing unease among people who work for state government that the state’s own pension fund has tilted against them.
It’s not just something that they’re talking about in the Statehouse where committees talk about the Kansas Public Employees Retirement System, but something that is moving across the state. And don’t figure that just because you don’t work for government at some level that you don’t have any reason to be concerned, because about a quarter-million Kansans are involved in KPERS, so you know someone who has an interest in the issue.
You’ve read in the papers about the shortfall in KPERS, about how the pension system doesn’t have enough money—and probably won’t have enough money if the program isn’t changed–to cover its bills in a decade or two. Nothing’s on fire now, everyone’s getting their check, but projections are that in the future, the pension fund won’t have enough money to meet its obligations.
That’s not going to happen, of course. The Legislature is moving, slowly, to figure out ways to make sure that the pension fund is sound and that everyone will get their pensions.
But what’s being whispered is that the pension fund’s largest single account, a blend of state and school district employees, the so-called state-school account, is badly out of balance. Carve that separate plan out of the entire KPERS operation, and you’ve accounted for the shortfall in the pension fund.
Want to see how the shortfall spreads across state employees’ pension accounts and those of employees of school districts? Well, at last count, there was a shortfall of about $106 million on the state employee side of the ledger and about $2.1 billion on the school district side of the ledger.
See the problem that state employees are seeing? They are tied to a group that is creating a problem for their pensions.
The link-up was done in the 1960’s to provide school districts with a pension that they could offer their teachers and administrators, and nobody had much of a problem with it then. But after a few decades, some bad investments and some downturns in the stock market, the entire pension system is under water and people are wanting to find out where the problem is.
It is schools.
The state pays the employer portion of the pension contribution on behalf of its employees and school district employees. School district raises for employees–which perennially outstrip state employee pay raises—mean that there’s a bigger obligation for state payments on behalf of teachers than for employees of the State of Kansas. By raising salaries, school districts can obligate the state to pay more money for school employee pensions than for the pensions of state workers.
Bear in mind that schoolteachers who are in the KPERS program are a powerful political force in the state. And roll in, too, that school districts are apparently broke, or near broke, and are constantly beseeching the Legislature for more tax money so they can improve education of our children. The way that is generally done is by hiring more teachers and paying them more which requires more state tax dollars to make the contribution to the pension system on teachers’ behalf.
Think back to—and it probably won’t be too long—the last time you heard a member of the Legislature say we need more teachers and we need to pay teachers more. Now, see if you can remember the last time you heard a member of the Legislature say we need more state employees and we need to pay them more.
Starting to see why some state employees are wondering whether this state employee-school district link-up is still a good idea?
Don’t look for torchlight parades and rallies from the steps of the Statehouse...but it’s an issue that is building among state employees.
Sept. 11, 2003
(Distributed to Kansas newspapers Sept. 8, 2003)The belly fat dilemma
There is some information that is so-o-o good that you just want to tell everyone you know about it.
And there is some information that is so-o-o good that reasonable grown-ups know that they can never tell anyone about it.
It’s some of that so-o-o good information that the Legislative Division of Post Audit came up with last week, and we’re going to have a good time watching members of the Kansas Legislature to see if they are smart enough to know which sort of information it is.
The information is that there are more than 1,500 "special" units of government in Kansas, little governments that do specific little things, and levied property taxes in 2002 of about $153 million.
The special units of government are generally townships, watershed districts, cemetery districts and hospital districts.
The information from Post Audit indicates that most of those special districts can be merged into other districts; for example, a township could give up its road maintenance duties to its county and have very little else to do and no reason to levy any property taxes.
Virtually the same thing could be done with watershed districts, cemetery districts and probably hospital districts which support a hospital that is generally in a town that could take over its operation.
Now, figure that the counties or cities that take over cemetery maintenance or drainage or road work would probably need to levy something for that work, but not as much as a special-purpose district.
On one hand, that information is so-o-o good that legislators probably would like to share it with others. But it would be a lot like handing a friend that new diet book that advertises on its cover "lose belly fat first!"
Yes, making a big deal out of the money that can be saved by eliminating those special districts is a lot like handing someone the "lose belly fat first!" book: it implies that those small units of government are run by people too obtuse to know they are spending more than they absolutely need to, just as making a gift of the diet book indicates that its recipient has belly fat.
See the problem here? Saving people from themselves is tricky; it can take the appearance of scolding people and probably one of the first things that legislators need to learn is that you won’t be in Topeka long enough to earn a pension if you scold your constituents.
This good information also arrives at the Statehouse in curious political times. It arrived smack in the middle of an era when "reducing costs" is a war chant of legislators who are looking to reduce costs of things that they probably ought to leave alone. Janitorial and social services come to mind.
Well, it’s early yet. The report is just out, and we’re going to watch to see whether anyone in the Legislature has the bright idea to save mostly rural Kansans from themselves by introducing legislation that would eliminate townships, or at least make it plain to constituents of those township elected officials that they are being taken for a property-tax ride.
We’re guessing that if some legislator wants to step into that bear trap it’s going to be a legislator from a city, or a county that is so overlain with cities that there’s not much in the way of townships to battle. And many townships have already given up their road maintenance duties to counties, anyway.
What happens next? Well, we’re doubting that many more townships are going to voluntarily give up their road graders and ditch-mowers to their counties in return for a couple mills less property tax, reduced by whatever it costs the counties to grade the roads and mow the ditches.
So we’ll wait. Something tells us politician-watchers that it will take a legislator with the same social skills-deficit demonstrated by giving a friend or spouse the "lose belly fat first" book to loudly raise the township issue.
It’ll be so-o-o interesting...
Sept. 4, 2003
(Distributed to Kansas newspapers Sept. 1, 2003)You win one...
Gov. Kathleen Sebelius won one political battle and lost one political battle in essentially the last week of summer.
Just before the fall legislative study committees really start gearing up, she was given the e-mail addresses of 10,013 Kansans—mostly state employees—so she could push out to their computers a friendly, charming little electronic newsletter that is not hard news, not strictly political, but basically nice things she has done recently. The technical term? Spam.
That was the win. She’s the only statewide elected official who has gotten those state employee e-mail addresses to which she can send—unsolicited— the friendly little newsletter. She tells about saving $80,000 by turning off the lights when nobody’s in the room, and she talks about the new Chevrolet Malibu that is being built in the Kansas City, Kan., General Motors Plant where we notice that she noticed that 2,800 of the 3,000 employees are members of labor unions.
Other state elected officials? Well, State Treasurer Lynn Jenkins has an official e-mail newsletter but you have to ask for it, not have it pushed onto your computer. Same with Attorney General Phill Kline. Insurance Commissioner Sandy Praeger doesn’t have a "push" newsletter, and if you want to find out what she’s doing, you have to go to her official state website to look around.
Anyone can subscribe for free to the governor’s newsletter, but if you were a state employee, one of the 10,013 who were delivered Sebelius’ newsletter, would you really want to click on the box that says "unsubscribe" to the governor’s missive? You think those folks who unsubscribe go on a list somewhere?
Interestingly, while Republicans continue to try to find ways to "go around" the media directly to voters with their messages, Sebelius is doing OK with the Statehouse press corps, and is so far using the newsletter just to be friendly, growing good will...
•••
The political loss for the governor last week? It was subtle and there’s a good chance that only a handful of legislators and politics-watchers even noticed it. Now, you’re among them. It involved delaying until what might be the first year of a second term as governor the big-ticket expense of righting the state’s pension fund.
Here’s the situation: The Legislature passed and the governor approved last session authority for the state to make a $500 million bond issue to provide new money for investment by the Kansas Public Employees Retirement System, which is in pretty significant financial trouble according to the actuaries.
Well, that $500 million bond issue was tough to get through the Legislature, and it will require increasing the state’s contribution to the pension fund. That means more money spent, that means less money available for more politically attractive projects and it means that the governor will have to set aside a larger portion of her budget for paying off the bonds.
Except, her bond agency came up with the idea of instead of issuing $500 million in bonds, let’s issue $625 million in bonds. Is that even more financial trouble for the governor? Nope, it means that the money above the $500 million that the Legislature agreed to can be used to make the early payments on the debt... which means for the rest of Sebelius’ first term in office, she wouldn’t have to use state tax dollars to finance the KPERS bonds. Pensions are important of course, and the governor realizes that, but spending money to beef up the pension program isn’t the vote-getter at election time like, say, increasing teacher salaries.
A legislative committee slapped down the $625 million bond issue deal quickly, sending the bond agency back to the drawing board to come up with a proposal that doesn’t give the governor a free ride for the next three years in making a tight budget stretch to cover additional contributions to the state pension system.
Count that a political loss.
So, the governor got the chance to win hearts and minds of state workers with her e-mail newsletter, but didn’t get a free ride in financing those same state employees’ pensions.
Who’s gonna notice?