The Kentucky Chamber of Commerce recently published its assessment of the just-concluded session of the General Assembly. Included in its analysis is a section called "Missed Opportunities." And one of the missed opportunities identified was the result of a veto by Gov. Steve Beshear.
Specifically, Beshear vetoed HB 407 authorizing the use of public-private partnerships - generally referred to as P3s - to facilitate private participation in state and local government infrastructure projects. The Paducah Sun editorialized in favor of that bill during the legislative session, and it passed both chambers overwhelmingly, with an 86-9 margin in the House and by 27-9 in the Senate.
The governor vetoed the measure because he objected to an amendment to the bill that prohibited using tolls to fund a replacement for the Brent Spence Bridge between northern Kentucky and Cincinnati. Beshear said, "It is imprudent to eliminate any potential means of financing construction of such a vital piece of infrastructure."
We suppose this could lead us to a discussion about Kentucky's debt problem, its relatively low (to other states) bond rating, its snowballing benefits crisis, the Obamashear Medicaid expansion, and the consequences of its profligate use of bond issues in the past to buy political candy.
But suffice it to say charging tolls on a bridge that connects northern Kentucky and Cincinnati strikes us as a disproportionate tax on the people and businesses in northern Kentucky that would have to travel the bridge daily to get to and from jobs or service their customers across the river.
Further, amendments such as this can be undone by future legislation if an adequate case can be made. To let this issue take down the whole bill doesn't strike us as being in the best interest of Kentucky.
As we noted in our previous editorial, every one of the states bordering Kentucky has passed P3 legislation. Some have had the law for decades.
Kentucky's bill would have, among other things, created an Office of Public Private Partnerships in the Finance and Administration Cabinet. The office would be responsible for encouraging competition for ways to privately fund specific infrastructure projects and needs.
Examples of successful efforts in other states include a wastewater treatment and storm water management project in Indianapolis. That city contracted with a private company in 1994 to plan, operate and maintain its waste and storm water systems. It is estimated to have saved the city $189 million over a 15-year period.
Part of the impetus of HB 407 was the financial squeeze Kentucky finds itself in. The legislation was aimed at attracting private capital to finance infrastructure rather than adding to the state's troubling debt burden. So the fact that it was sunk by a bridge Kentucky doesn't seem to think it can pay for is ironic indeed.
It is also disappointing that despite the fact the bill passed by enough votes to potentially override the governor's veto, legislative leaders chose not to make that attempt during the "veto session."
The state Chamber's terminology on this one is right. It is a missed opportunity, and another case where Kentucky is left lagging behind neighboring states in the tools in its competitive arsenal. We wish the governor had kept his pen in his pocket on this one.