The Lexington Herald-Leader has a preview of Gov. Steve Beshear’s first State of the Commonwealth address. Even though Beshear is continually complaining about how the state budget is in terrible shape it sounds like his proposed “fix” for the state employee pension shortfall will be throwing more money at it without changing or cutting benefits:

Senate President David Williams, R-Burkesville, said he hopes Beshear will use the statewide televised bully pulpit to at least touch on a plan to reform the state employee retirement system, which has been underfunded and must cope with bloating health care bills for retired workers.

Beshear has said he intends to offer such proposals during the 2008 General Assembly.

He says he’s considering selling bonds to raise money to cover part or all of the multi-billion deficit in the public employee pension system. However, he said he was cautioned by the bond-rating agencies in New York that some governments, such as the state of New Jersey and the city of Pittsburgh, Pa., got themselves in more financial trouble by doing so.

Bad idea if this all there is to his pension “solution.” You think it’d be a no brainer to convert all future state employee hires to a 401 k style defined contribution retirement plan, but current state employees seem to raise cain when anyone suggests this notion. Get with the program. Almost everyone in the private sector has this plan and you don’t hear them complaining. Plus, the proposals I have seen do not tinker with any type of current state employees’ benefits.

I expect tomorrow to be a depressing and bleak picture of the state budget. Beshear will probably tell everyone that he will have to cut all kinds of state programs and education funding… that is… unless the legislature passes a ballot initiative to let the public vote on allowing expanding gambling. If the public approves this measure it’ll mean more funding, more programs and no spending cuts… at least that’ll be how I predict Beshear will sell his gambling plan. If the people pass expanded gambling what will happen when the Legislature finds ways to spend all that “new revenue?”

It’ll also be interesting to see if Beshear will support an increase in Kentucky’s cigarette tax. Seems like Jody Richards is backpedaling, as usual, and now would support a cigarette tax increase. Just a couple of weeks ago Beshear was saying he did not support an increase in taxes “at this time.”

The speech airs on KET Monday at 7 PM EST.