OP-ED FROM HERALD LEADER: "Courthouse plan wastes taxes, trust - Pike tale shows why Ky. never progresses"

Here is an editorial from the Lexington Herald Leader on May 18, 2008 which follows it recent news stories critical of some components of Kentucky Courthouse construction projects. The remainder of the story is below the "fold":

Courthouse plan wastes taxes, trust

Pike tale shows why Ky. never progresses

If the story of the new Pike County Courthouse was fiction, you would think the author was throwing in everything he had to make Kentucky look bad.

Fiction it's not.

For those who still scratch their heads about our persistent lame ratings in almost everything, this true story is a cautionary tale about how we got here and why we're not going anywhere.

It's a tale of cozy relationships, questionable planning, wacky property assessments and throwing good money after bad.

Wasteful spending

Pike County got a new courthouse and jail in 1990 at a cost of $7.3 million. So, why, when courthouses built a century ago are still in use all over the country, can't Pike County keep one for 20 years?

It was poorly built, a circuit judge there told Herald-Leader reporter Brandon Ortiz. The walls and foundations are cracked, the heating and air systems don't work right, the roof leaks.

There's no sign anyone was ever held accountable for the poor construction, so the solution is for taxpayers to ante up $28.4 million to replace it.

There are other ways to waste taxpayer and private dollars. A rash of new courthouses has been something of a plague on historic downtowns. Pikeville's oldest building could be demolished for the courthouse project despite local opposition to destroying some of the town's limited historic properties.

The same was true recently in Flemingsburg, where a courthouse project had threatened to destroy a critical part of that town's history.

Too-cozy relationships

Building county courthouses is the bailiwick of the Administrative Office of the Courts, which is overseen by Kentucky Supreme Court Chief Justice Joseph Lambert.

Lambert's associate on the court, Justice Will T. Scott, owns buildings that will be purchased and torn down to make way for the new Pike County Courthouse.

(Aside from this courthouse, Lambert's son, Joseph P. Lambert Jr., got a job earlier this year with a brokerage and investment firm that has been financial adviser to more than two-thirds of the 60 courthouses built under the senior Lambert's direction over the last decade. The son's girlfriend was recently hired for an unadvertised human-resources job at the AOC.)

Scott says there's no impropriety in his deal because he doesn't want to sell his buildings anyway. Still, he's either getting a very good price, or he has enjoyed a great deal on property taxes.

Lagging assessments

Which brings us to the funny math of Kentucky property assessments. County tax records valued Scott's building at $84,000 in 1996, the year he and his mother paid $150,000 for it.

The Pike County property valuation administrator assessed the building at $150,000 in 2004. But now, four years later, the county is offering $360,000.

Project officials brushed aside any suggestion the county was overpaying by saying that properties commonly sell in Pikeville and elsewhere in rural Kentucky for more than they are assessed.

That's certainly true. It even happens in our state capitol. In a strange real estate deal proposed in Frankfort, several office buildings, collectively, were on the tax books for $20 million, while the sale price was $56.5 million.

However, Kentucky law says that real property "shall be listed, assessed, and valued as of January 1 of each year" which should prevent outdated assessments. State law even spells out that property should be assessed for 100 percent of its value.

One wonders why you'd need to codify such an obvious thing -- until you look at the results of a massive state-ordered reassessment spurred by the Herald-Leader's landmark 1989 series, "Cheating our Children."

Reassessed, the average value of property in Pike County on the tax roles rose 56 percent.

Broader consequences

Who does this hurt?

Pretty much everybody.

Counties use property tax revenues for a lot of things -- roads, water and sewer systems, police and fire service, parks and recreation -- that make life better.

Historically, schools have been almost totally dependent on property taxes, so underassessing diminishes the quality of education for children.

That changed when the litigation and legislation that reformed Kentucky's school-funding system created more financial equity among districts and spurred the reassessment.

In the simplest terms, though, under the reform formula, poor counties with limited tax revenues are subsidized by the entire state, while wealthier counties receive much less state support.

When people pay less in some counties, kids in other places have fewer resources at school, even though their parents pay higher property taxes. When the state makes up the difference from general revenues, there's less money for drug treatment, health care, roads, higher education and dozens of other things.

It's that simple.

It's just one story, the new Pike County Courthouse, with many threads. It's all true and it does make Kentucky look bad.

Worse, it shows us why Kentucky will continue to look bad.

Comments

[Pike County Citizen]

Pike County's does'nt need a new courthouse. Pike county needs officials who are not corrupt. I know for a fact that the judges hide crimes committed by a former master commissioner. I know when you have something they want, the judges here are more than willing to help rip you off with their court-orders even though they know it is unethical and illegal. They need to clean the courthouse up and kick the judges off the bench and expose these judges for the criminals they are. We have four judges here who need to be investigated by the Department of Justice.