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'Ghost governments' bill appears on fast track

by Joe Arnold


Posted on February 6, 2013 at 12:05 AM

Updated Wednesday, Feb 6 at 12:05 AM

FRANKFORT, Ky (WHAS11) -- A bill that would require Kentucky's estimated 1200 special taxing districts to report to an online registry appears to be on a fast track at the state capitol.

Bi-partisan support of House Bill 1 includes more than 30 co-sponsors, an endorsement from the Republican floor leader of the Senate and the support of dozens of interest groups. 

Supporters touted the bill at a Tuesday morning news conference in the Capitol Annex. 

"Those who fee and tax us and those who serve us ought to be governed at least by the same level of oversight as those in the profit and non-profit sector," said Auditor Adam Edelen (D), referring to the requirement of private companies to register with the Kentucky Secretary of State's office.

"It is my hope that we can get this bill to the governor for his signature by the time this session ends next month," said Sen. Damon Thayer (R) Georgetown, the majority floor leader.

Edelen's 2012 "Ghost Government" report on the taxing districts, from sewer boards to fire departments, revealed inconsistent management and accounting practices.  It estimates the districts oversee a total of $2.7 billion in receipts.

"We all know about the examples of bad behavior," Edelen said, "you don't have to look very far.  You know, in your own area (Metropolitan Sewer District) would be an example.  In Lexington, the airport board, where they thought it would be a good idea to spend money on strippers and alcohol is another."

"We should not leave here today thinking that we're doing something because there was a great amount of fraud or abuse or anything like that in the system," cautioned House Speaker Greg Stumbo (D-Prestonsburg), "Just the opposite is true."

"Unfortunately with the system that we've got today, it does precisely that," Edelen said.  "It lumps those who are doing the right thing with those who aren't."

Edelen would not estimate what percentage of the taxing districts he thinks are operating poorly. 

"By shedding light on the amount of money, and certain districts don't want to be too forthcoming in how they spend their money and haven't had audits done in some cases for years, we think then this creates a situation where we have 4 million auditors instead of just a handful," said Jim Waters of the Bluegrass Institute, a conservative think tank.

"Taxpayers have the right to know what's happening with their dollars, whether those dollars are being spent in Frankfort, or by the local sewer district," Waters added.

House Bill 1 has its first public hearing during the House Local Government Committee meeting at noon Wednesday.