Early Sunday morning, the Senate/House conference committee completed negotiations on its budget plan. Thanks to the outpouring of literally thousands of emails and phone calls from concerned citizens like you, House leaders were able to save Kentucky's Affordable Prepaid Tuition (KAPT), and keep it open for future enrollment.
To our great disappointment and outrage, however, Senate leadership forced its inexcusable and illegal $13.7 million raid on the KAPT program into the final budget. They raided $13.7 million from college savings funds -- from a program that provides educational opportunity to thousands of kids without costing taxpayers a dime -- in order to spend it on their special interest pet projects. As the Lexington Herald-Leader editorialized on Friday, they have put purely partisan politics ahead of what is right for the people.
This fight is FAR from over, however. When legislators learn about this budget -- the negotiations were conducted in secret -- I believe they will be outraged also. And I encourage you to make your voice heard on MONDAY-- by contacting your legislators, writing letters to the editor, calling radio talk shows and emailing your friends. A vote on the final budget will take place on Tuesday, and it is important for your representatives to know how you feel.
Again, the General Assembly's toll-free number is 1-800-372-7181, and/or you can email your legislator at FirstName.LastName@lrc.ky.gov (i.e. David.Williams@lrc.ky.gov). Let them know on MONDAY that the citizens of Kentucky value educational opportunity -- that you won't support Frankfort politicians who join in an illegal raid of one of the most effective public/private partnerships that helps working families, and that does not cost taxpayers one cent.
If indeed the budget does pass in its present form, judicial review is very likely, given that the Senate has forced this raid despite a clear warning of its unconstitutionality -- and possible lawsuits -- by Attorney General Greg Stumbo. We will keep you apprised of legal developments.
Finally, I want to assure the nearly 9000 KAPT families that their personal investments are protected by the legally binding contract that they signed with the state that will provide tomorrow's tuition when their children enter college. While the program's $2.2 million surplus would be transformed into a more than $11 million long-term deficit, KAPT still would be one of the financially healthiest prepaid tuition programs in the country. Among the 19 other states that have prepaid tuition, KAPT's deficit will be one of the smallest. Further, KAPT still would have around $90 million of assets, even if the raid is successful. The $11 million actuarial deficit simply means that, under current projections, the KAPT fund will need a financial boost from the unclaimed property program in about 15 years. And the law clearly states that 75% of the unclaimed property program (now valued at nearly $150 million) is available to back up the program.
Moreover, thanks to the efforts of Reps. Harry Moberly and Rocky Adkins in the conference committee, KAPT is still open to future enrollment, during which contract premiums charged could reduce and perhaps eliminate the $11 million deficit. Just last fall, the premiums charged to new enrollees in KAPT generated a $1 million surplus for the program.
I hope that this unfortunate incident does not erode your confidence in state government. It is an outrage that a program that was conceived by a unanimous vote of the General Assembly, supported strongly by Senator Mitch McConnell, and administered effectively for more than a year by the administration of Governor Ernie Fletcher, would fall prey to partisan power politics. We are at a time now in Frankfort when some of our state's leaders seek power solely for the sake of power and consistently put partisan interests above good public policy.
However, there are still many of us, in both parties, who believe that the moral test of government is how it treats its citizenry: providing every Kentuckian who works hard and acts responsibly with the opportunity to share in the American Dream -- of an affordable college education, good health care, and economic prosperity for their families. And I believe from the bottom of my heart that one day soon, we will prevail again.
Yours truly,
Jonathan Miller
State Treasurer
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