Finance

A Spending Spree in Kentucky

Like governments everywhere, cities and counties in Kentucky seem to realize that the current budget environment requires them to keep a close watch on spending....
by | September 30, 2009

Like governments everywhere, cities and counties in Kentucky seem to realize that the current budget environment requires them to keep a close watch on spending. But the associations that represent them at the state capitol in Frankfort have been a little late in getting the message.

The executive directors of both the Kentucky League of Cities (KLC) and the Kentucky Association of Counties (KACo) have had to resign in recent weeks due to reports of lavish expense account bills. Over the past three years, KLC staff spent more than $300,000 on travel and meals, while KACo's top five staff members managed to spend twice that much in just two years.

The overall totals raised eyebrows, but some specific line items looked particularly bad. KACo employees ran up charges at strip clubs and an escort service. The League of Cities, meanwhile, spent $21,000 at a Lexington restaurant co-owned by its executive director's husband, and sent $2.3 million worth of business to law firms in which he was a partner.

Both groups collect annual fees from the Kentucky governments that are members, and they make millions selling insurance to those jurisdictions. The big dollars, suggests Damon Thayer, who chairs the local government committee in the state Senate, led to a mindset in which staffers stopped thinking of themselves as accountable to the public, even though their funding came from the public purse.

The Lexington Herald-Leader, which first reported the credit card abuses of the two organizations, had earlier found similar patterns of questionable spending at the Lexington public library and the regional airport. The newspaper's stories, says state Auditor Crit Luallen, have led to new public discussion of spending issues.

The League of Cities already has acted to change its ways, implementing new ethics and accounting policies. KACo has similar plans. But that won't erase the stain. "In the past, both organizations really wore the white hat when they were in Frankfort," Senator Thayer says. "Certainly, that's been damaged."

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