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Lobbyists Spent $24.9M to Sway Kentucky Legislators Last Year

Companies, nonprofit organizations and other groups spent a record amount to influence the state’s General Assembly last year, with Kentucky Merchants and Amusement Coalition topping the list with $483,324 spent.

A Kentucky state senator walks into an office at the Kentucky state Capitol
A Kentucky state senator walks into an office at the Kentucky state Capitol on Friday, Aug. 26, 2022.
Ryan C. Hermens/TNS
How do you try to influence Kentucky’s legislature and win their favor? Spending nearly $25 million to lobby legislators is one way, state records reviewed by the Herald-Leader reveal.

Last year, companies, nonprofit organizations and other groups spent $24.9 million to influencing the General Assembly. Despite the odd-numbered short session year, the spending topped the record set in 2022, which was about $22.4 million.

Several lobbyists, as reported in a recent Herald-Leader series on influential unelected figures in state government, were paid well as a result.

John Schaaf, former counsel for the Kentucky Legislative Ethics Commission, said the continual upward trend of money spent on lobbying politicians is no surprise. For organizations and corporations looking to gain an edge, they’re “positioned to get more favorable treatment from government” if they spend heavily on lobbying,” he said.

This spending comes in concert with campaign contributions, which Schaaf called “an essential part of lobbying.”

“Studies have shown the obvious: if a business spends a lot of money to help politicians get elected, and then spends more to have frequent access to them through lobbying, that business will get more contracts, tax breaks, incentives and subsidies than a business that does not participate in that process,” Schaaf said.

Senate Majority Floor Leader Damon Thayer, R- Georgetown, said he had mixed feelings about the proliferation of lobbying spending in Frankfort, but the practice was a “part of how things work” there.

“The General Assembly makes a lot of big decisions. It probably has more impact on people’s daily lives and the way businesses work or don’t work than what happens in Congress,” Thayer said.

“Lobbyists perform a sometimes valuable service educating legislators on issues. Every one of us has subject matter specialties, and some of us grow to know more later on our careers, but we cannot know everything.”

Thayer, who is not seeking re-election after a lengthy tenure in Frankfort, said he holds some lobbyists in high regard, but others less so. Sometimes, he said, all the various lobbying interests can give lawmakers headaches.

“It is annoying, I’m not going to lie. You get pulled in multiple directions, and if you don’t like it you should leave. There are about 36 reasons I’m leaving, and that’s one of them,” Thayer said.

Who Spent in 2023?

The legislative war over so-called “gray machines,” slot-like machines that popped up in convenience stores across the state during the pandemic, dominated the upper echelon of lobbying spending.

A bill to ban the machines from Rep. Killian Timoney, R- Lexington, eventually passed into law, but not without pushback from many of his fellow Republicans, as well as a mysterious group that ran anti-trans ads against him.

Timoney is generally less socially conservative than many of his GOP peers.

Kentucky Merchants and Amusement Coalition, a group supported by companies that make the gray machines, as well as convenience store proprietors who said the machines provided steady business in uncertain economic times, topped all lobbying spenders in 2023.

They dropped $483,324 last year, leading all lobbying groups. The state’s most prominent company in that space, Pace-o-matic, spent $110,000 on its own for lobbying.

The victorious lobbying side, Kentuckians Against Illegal Gambling, was backed by horse industry interests. The horse industry is buoyed by its own slot-like games called “historical horse racing” machines.

They spent $348,763 on their efforts, but Churchill Downs and Keeneland, the state’s two biggest horse racing tracks, chipped in $128,000 and $112,000, respecetively, on lobbying as well.

The Red Mile, Revolutionary Racing and ECL Gaming chipped in approximately $84,000, $82,000 and $45,000, respectively.

Who Else Spent Six Figures Lobbying The Legislature in 2023?

The Kentucky Chamber of Commerce, a mainstay at the top of the lobbying lists, spent the second most of all organizations at $440,000.

It lobbied for a litany of bills, including: House Bill 594, the horse industry-backed ban on “gray machines;” House Bill 1, the bill affirming the state’s personal income tax rate cut from 4.5 percent to 4 percent; House Bill 5, which will, to the chagrin of bourbon-producing local governments, phase out the property tax on bourbon barrels; and House Bill 9, which supports local governments applying for federal grants.

Louisville’s chamber of commerce, Greater Louisville Inc., spent more than $113,000 lobbying the legislature on several bills including House Bill 551, which ended up legalizing sports betting in the state. Like other border communities, Louisville officials reported bettors crossing the state line into Indiana, where the practice was legalized in 2019, to make bets.

Coming in fourth in total spending, the Kentucky Hospital Association dropped about $265,000 on lobbying the legislature.

The organization was active during the legislative session, but the lion’s share of its funds were spent during the interim, when a task force to study certificate of need laws was active. The Kentucky Hospital Association has lobbied against repealing certificate of need – proponents argue its a lifeline for several hospitals while detractors like the libertarian-leaning group Americans for Prosperity say it’s anti-free market – consistently. The association also lobbied in favor of House Bill 75, which passed and was seen as a boon for hospital reimbursement rates.

The American Civil Liberties Union of Kentucky, known as the ACLU, spent the fifth-most of any group at around $192,000. It lobbied on an array of bills, but was notably involved in the push against bills that many LGBTQ rights advocates have called anti-trans. It lobbied against Senate Bill 150, a bill banning gender affirming care for trans youth in Kentucky.

The ACLU also pushed back against Senate Bill 5, which set up a review process for books that some opponents framed as a slippery slope towards “book banning.” It lobbied against Senate Bill 126, a GOP-backed bill that Gov. Andy Beshear framed as an effort to circumvent Franklin Circuit Court, which has drawn the ire of Republicans in recent years. The bill passed, but the ACLU’s challenge against it succeeded in the Kentucky Supreme Court.

Altria Client Services, one of the world’s leading producers of cigarettes and other tobacco and nicotine products, has a relatively short list of bills its lobbied on – still, it spent the sixth most at almost $192,000. None of those bills got a hearing with the exception of Kentucky’s medical marijuana legalization bill, which the company only engaged with in its late stages.

It did, however, lobby in general on “matters pertaining to the manufacture and sale of tobacco products.” Perhaps most important: Kentucky’s relatively low tax rate on tobacco products did not change. In 2018, when lawmakers were seriously considering making a change in that department, Altria spent the most of any company on lobbying the legislature.

The Kentucky Medical Association focused on issues relevant to the state’s doctors, spending more than $169,000 in 2023 on their behalf. It lobbied on behalf of a bill related to prior authorization, a process wherein physicians must obtain approval from insurance companies, which they say can lead to delays in care, before going forward with a test or procedure.

The organization also lobbied against some bills that tried to curtail certain vaccine requirements and it shared some lobbying priorities with the Kentucky Hospital Association.

The Kentucky Retail Federation, a Frankfort mainstay, spent almost $169,000 lobbying the General Assembly. The federation’s priority bills are not included on documentation provided to the Kentucky Legislative Ethics Commission.

However, the group was opposed to efforts during that session to advance a constitutional amendment allowing local governments more taxation options. They argued that such a shift would lead to increased sales tax rates, with the burden falling on retailers. That amendment has passed the House in the past, but has never survived Senate scrutiny.

A priority of the Kentucky Distillers Association, which represents the majority of Kentucky’s booming bourbon industry, was House Bill 5. It spent more than $168,000, with most of its public action taking place on that bill.

The gradual full phaseout of the property tax on bourbon barrels was met with major pushback from local governments who rely on that tax revenue from the currently thriving companies. Proponents said that not passing such a bill could cause distillers to start expanding operations into other states.

Three different energy companies cleared six figures of lobbying spending. Louisville Gas & Electric/Kentucky Utilities (LG&E/KU) spent more than $164,000, East Kentucky Power Cooperative cleared $118,000, and Duke Energy dropped more than $116,000.

Both LG&E/KU and Duke Energy publicly pushed back against Senate Bill 4, which passed into law and made it more difficult for utilities to retire coal-fired power plants.

In the health care and health insurance space, four companies spent six figures lobbying the state legislature. Healthcare facilities operator HCA Health spent more than $142,000, insurance giants Humana and Elevance spent roughly $124,000 and $123,000 each, and hospital operator Lifepoint spent more than $118,000.

Several of those companies, like Kentucky Hospital Association, lobbied on the bill related to hospital Medicaid reimburesement rates as well as a bill creating a healthcare workforce investment fund.

Local government associations the Kentucky Association of Counties (KACo) and the Kentucky League of Cities (KLC) spent about $141,000 and $140,000 on lobbying the General Assembly in 2023.

KLC lobbied on hundreds of bills, while KACo’s list is shorter but includes highly consequential pieces of legislation – for example, they a proposal to place a moratorium on using debt to build jails, which are often among Kentucky counties’ biggest expenses.

The organizations lobbied on an issue that sometimes puts them at odds with each other: Annexation. Senate Bill 141 put a partial moratorium on cities’ ability to annex county land. That topic could resurface this session, as the moratorium only lasts until July of this year.

Rounding out companies and organizations that spent six figures to lobby the legislature is telecommunications giant AT&T, which spent around $112,000. The company lobbied on multiple bills related to data privacy during the session, most consistently on Senate Bill 15.

According to Yahoo! Finance, AT&T was among several telecommunications companies to rail against that bill, which would have given consumers more control over their personal information online – that bill died in the House.

©2024 Lexington Herald-Leader. Distributed by Tribune Content Agency, LLC.
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