FRANKFORT, Ky. (AP) — Republicans will take over the Kentucky legislature thisweek with the help of millions of dollars in contributions from the finance and energy industries.
Republican House candidates and committees received more than $8 million in contributions for the 2016 election cycle, according to an analysis of disclosure reports by The Associated Press. Their largest donations come from bankers, coal company CEOs and a bundle of checks wrangled by Nashville-based economist Arthur Laffer, the famous supply-side economist who once advised President Ronald Reagan. Republicans also benefited from $70,000 in donations form the Bluegrass Committee, which is associated with U.S. Sen. Mitch McConnell.
Overall, House candidates and political parties on both sides raised nearly $19 million in 2016 for the pivotal elections that saw Republicans win a majority for the first time since 1921. About $4.5 million came from political action committees, while $4.3 million came from individual donations. The rest came from loans and transfers from prior campaigns. The final numbers will be higher, as some reports were not yet available on the website of the Kentucky Registry of Election Finance.
Democrats raised about $1 million more than Republicans, but it didn’t help as GOP candidates knocked off 16 Democratic incumbents on their way to a 64-36 super majority. Most of the top Democratic donors came from political action committees from groups like labor unions and teachers. Most of the top Republican donors came from wealthy individuals.
Some groups chose a side, like the Kentucky Education Association. Of the nearly $100,000 they spent on contributions, $95,000 went to Democrats. The group was concerned about an effort to bring charter schools to Kentucky. But now that Democrats no longer control the House of Representatives, the group’s ability to influence legislation could be hindered.
“My hope is that as education experts in this state, that the legislature will take the opportunity to seek our advice,” Association President Stephanie Winkler said.
Other groups, like the Kentucky Bankers Association, were more bipartisan in their giving. The Bankers’ PAC gave $54,000 to Democrats and $51,000 to Republicans. The new Republican administration has made tax reform a top issue for the upcoming session, something the banking industry will be watching closely. The industry changed the way banks were taxed about 20 years ago when it convinced the legislature to tax banks based on their capital instead of their profits.
Matthew Vance, the association’s CFO and treasurer of its political action committee, said the group purposefully gives equally to both sides to avoid any charge of favoritism. The group even donated to Democrat Hubert Collins and Republican William Wells — who ran against each other. Wells won.
“We don’t really look at Democrats and Republicans, we look at individuals and their positions taken in the past,” he said.
While the banking association did not play favorites, many bank executives did. First Southern Bancorp’s president and chairman Jess Correll and his wife, Angela, donated $61,000 to candidates, all of them Republican. The Forcht Group president and CEO Terry Forcht and his wife, Marion, contributed $48,000 — all but $1,000 of it to Republicans.
One of the largest concentrations of contributions came from Laffer and his wealthy friends. Together, the group donated at least $156,000 to Republican candidates and the state Republican Party. Laffer contributed, he said, because Kentucky’s economy is “a catastrophe” that is “destroying people’s lives.”
“The economy of your state is really bad. Who wants to keep the people in who have been the problem?” he said.
The day after the election, Republican Gov. Matt Bevin announced he would push for tax reform in 2017, most likely during a special session. That reform would seek to eliminate the state’s inventory tax and “death tax,” or a tax on inheritances — both things advocated by Laffer and his supporters. Laffer met with Bevin last week, but says he has not been hired as a consultant.
“Donations have no influence on any decision that the governor makes,” Bevin spokeswoman Amanda Stamper said.
Democratic state Rep. Rick Rand, the outgoing chairman of the House committee that writes the state budget, said Kentucky’s economy is “stable,” pointing to modest growth in the most recent spending plan approved by the state legislature. He vowed to oppose what he called “conservative, republican cookie-cutter” tax plans.
“If anybody thinks cutting taxes on high wage earners and passing it on to low wage earners is a way to revive a struggling economy, I think they are sorely mistaken,” he said.