A Challenge to Kentucky Subsidies

Steve_Beshear_by_Gage_Skidmore“Incentives” is little more than the public relations word for “subsidies.”

FRANKFORT, KY. — Tea party activist David Adams has filed a lawsuit challenging the long-standing practice of providing incentives to companies that locate or expand in Kentucky.

Adams claims in the lawsuit filed Wednesday in Franklin County Circuit Court that providing such incentives is unconstitutional. He is asking that the practice be stopped.

Kentucky has a long history of luring companies in with a variety of incentives that have been credited with helping the state land a variety of manufacturing plants.

Adams has filed a couple of other lawsuits in recent weeks challenging other state government initiatives, including the creation of the Kentucky Health Benefit Exchange. That agency, ordered set up by Gov. Steve Beshear, is intended to help the uninsured find medical coverage.

What’s notable about this is how it came about. David Adams (who replaced me when I quit my paid role at the Bluegrass Institute in 2007 and later ran the primary campaign of now-Senator Rand Paul) has filed two other suits challenging Governor Steve Beshear’s authority to both set up an ObamaCare health insurance exchange and expand Medicaid with no legislative approval. The judge, in tossing out Beshear’s request to have one of these lawsuits dismissed, wrote

It is fundamentally the duty of the court system to decide disputes over whether government officials have exceeded their statutory and constitutional powers.

That’s pretty bold language, and it appears to open the door to many more suits like the most recent challenge to the troubling system state subsidies for favored companies and industries. I, for one, can’t wait to see how these kinds of challenges go forward. Having spent time studying the General Assembly, I have a few thoughts about fertile ground for future suits.