With all the debate that the original lease terms made with UL athletics will mean that taxpayers and the state will be left paying the bill, I say that the lease agreement will amount to nothing more than the paper it's printed on if it means the state will have to pay out all of the bond debt. I'm certainly not a financial attorney and won't pretend to know how to argue the legalities of UL's lease. But, here is what I do know (as well as anyone with even limited knowledge about our current state budget fiasco). Jefferson County realizes that it can't afford to bail out the YUM arena and will pass the buck to the state. There is no way the state will just sit back and agree to dish out millions of dollars from our already troubled state budget just because of some orginal contractual lease. There is no remotely possible way they could even afford to. Simply put, the state will step in and manage YUM financing and budgeting making sure that YUM produces as much self generated revenue as possible and not just defer its financial bond shortcomings to the government for a complete bail out. If that means the state will have to throw out the old lease arrangements made with UL to bring in more events, attractions and possible revenue then it will happen. If it means replacing the current YUM fiscal board and the state coming in to primarily handle the YUM's finances then it will happen. It has to.
Our state is already in a serious budget crisis with deficit problems. There are not too many government expenditures or programs out there that could be cut to replace enough $ for YUM's debt besides: (1) Medicaid (2) education and (3) the Kentucky's employees retirement pension (KRS).
For Medicaid they have already implemented the new "Managed Health Care System" to try and control Medicaid costs because Kentucky has such a large percentage of its population receiving a "medical card". Health care professionals hate all the new paperwork along with the government now only agreeing to pay out certain amounts like private health insurance companies do- no more inflated billing to the state's Medicaid program to attempt to make up for what private insurances refuse to pay. And frustatingly, you even have some, not all, Medicare recipents (those who often get labeled the "entitlement" group) that are complaing about having to pay very reasonable co-pays for doctor visits, ER visits, and even $1 for prescriptions. Bottom line is I don't see option #1 being cut.
Option #2 doesn't seem is not a likely candidate either. Any public school administrator will tell you that with recent educational cuts that most public schools are operating on a bare-bones budget already.
Option #3 is one of the biggest concerns with the state legislature now. Recipients of the state employees retirement fund (KRS) make up of one of the largest voter demographics in the state. It would be political suicide for a legislator to try and explain to retired state workers that their pension benefits have been cut because money was needed to pay for a newly-built arena. With the retired now living longer, compared to past decades, and baby boomers beginning to retire the already financially strapped KRS is predicting even more staggering deficits to come (very comparable to the federal Social Security delima we've all been hearing about). Even the mere perception that retired state worker's benefits would be cut so YUM can get bailed out would cause outright chaos. I can just envision the tv campaign ads, "Candidate X wants to cut your benefits to help pay for the YUM bailout... vote for me to keep your hard earned retirement benefits in tact..." LOL!
And we all know that the Kentucky legislature has almost refused any proposal of increasing taxes even for programs like above- they're not going to increase taxes to pay for YUM.
Well, I know my post has been lengthy. I guess I went on and on to validate my origninal position- if the YUM lease favoring UL athletics is truley one of the biggest obstacles keeping revenues down then that will be changed. Again, I am not going to pretend to even know about contractual law and that I have all the answers. But, common sense tells me if the state government ends up on the hook for having to pay for any YUM shortfalls- original lease terms will not keep the government from stepping in and taking measure so that YUM will be forced to pay off as much bond debt as possible. Hell, the KY State Supreme Court would feel the pressure to establish some new precent ruling on contractual law to make sure it happens. They too are elected officials rather that appointed and will not stick their necks on the line to rule that government has to ante up the money because of original terms. Although I'm not a lawyer, I do realize that law is interpretive and subjective. Which means it can always be changed especially when the state's budget livelihood is riding upon the interpretation.
Our state is already in a serious budget crisis with deficit problems. There are not too many government expenditures or programs out there that could be cut to replace enough $ for YUM's debt besides: (1) Medicaid (2) education and (3) the Kentucky's employees retirement pension (KRS).
For Medicaid they have already implemented the new "Managed Health Care System" to try and control Medicaid costs because Kentucky has such a large percentage of its population receiving a "medical card". Health care professionals hate all the new paperwork along with the government now only agreeing to pay out certain amounts like private health insurance companies do- no more inflated billing to the state's Medicaid program to attempt to make up for what private insurances refuse to pay. And frustatingly, you even have some, not all, Medicare recipents (those who often get labeled the "entitlement" group) that are complaing about having to pay very reasonable co-pays for doctor visits, ER visits, and even $1 for prescriptions. Bottom line is I don't see option #1 being cut.
Option #2 doesn't seem is not a likely candidate either. Any public school administrator will tell you that with recent educational cuts that most public schools are operating on a bare-bones budget already.
Option #3 is one of the biggest concerns with the state legislature now. Recipients of the state employees retirement fund (KRS) make up of one of the largest voter demographics in the state. It would be political suicide for a legislator to try and explain to retired state workers that their pension benefits have been cut because money was needed to pay for a newly-built arena. With the retired now living longer, compared to past decades, and baby boomers beginning to retire the already financially strapped KRS is predicting even more staggering deficits to come (very comparable to the federal Social Security delima we've all been hearing about). Even the mere perception that retired state worker's benefits would be cut so YUM can get bailed out would cause outright chaos. I can just envision the tv campaign ads, "Candidate X wants to cut your benefits to help pay for the YUM bailout... vote for me to keep your hard earned retirement benefits in tact..." LOL!
And we all know that the Kentucky legislature has almost refused any proposal of increasing taxes even for programs like above- they're not going to increase taxes to pay for YUM.
Well, I know my post has been lengthy. I guess I went on and on to validate my origninal position- if the YUM lease favoring UL athletics is truley one of the biggest obstacles keeping revenues down then that will be changed. Again, I am not going to pretend to even know about contractual law and that I have all the answers. But, common sense tells me if the state government ends up on the hook for having to pay for any YUM shortfalls- original lease terms will not keep the government from stepping in and taking measure so that YUM will be forced to pay off as much bond debt as possible. Hell, the KY State Supreme Court would feel the pressure to establish some new precent ruling on contractual law to make sure it happens. They too are elected officials rather that appointed and will not stick their necks on the line to rule that government has to ante up the money because of original terms. Although I'm not a lawyer, I do realize that law is interpretive and subjective. Which means it can always be changed especially when the state's budget livelihood is riding upon the interpretation.
