Kentucky COVID: The Mess and The Money

What if I told you I was going to restrict your way of life to protect you from something scary without giving you the full information on what I’m protecting you from? Then I say these restrictions are indefinite and I’m not sure when I can give them back. But I can do that because I talk to people I think are smart about the scary thing. Oh, and your trust in me must be absolute. We cool?

Then imagine over 2,000,000 people easily and willfully agreeing to this protection at all costs, including their children’s own well-being.

Welcome to the Bluegrass State in 2020.

Clearly the numbers don’t matter anymore. Data around cases, hospitalizations and deaths is unreliable, incompetent, incomplete or fraudulent everywhere and especially bad here in Kentucky. Most people don’t care or are all too eager to trade their way of life for ‘safety from COVID’ no matter the cost or real relative risk. Every day at 4:00, we get more half-truths from bad data they even admit is bad data and no plan on when this can end with near no accountability from a free press nor check or balance from other elected officials and the judiciary. 

I wonder, should we be asking different questions?

Could one reason for this mess be an old, familiar enemy?

Money. We’ve ‘printed’ over $3,000,000,000,000 (that’s trillion kids) and are looking to deploy between $900 billion and $3 trillion more with the next round of stimulus. You don’t put that kind of money out there without severe consequences—expected and unexpected. The national and macroeconomic implications are book-worthy, but let’s take a quick look at our back yard.

The Bluegrass ‘Green Machine’

Let’s look at some of the Federal Funding we’ve received across the state since March

  • We’ve had over 50% of the Kentucky workforce (1.18 Million) request unemployment support since March and we received federal support of $600 extra per week for each claim
    • Interesting note: Unemployment has sharply dropped in the state. It turns out you can’t stay home and watch Ellen every day if your $600 federal unemployment bonus has ended, 6 month mortgage forbearance plans are ending and landlords now having to pay their mortgages force you to pay rent.
  • KY paid over $3B out of their Unemployment Trust Fund and is now at a ZERO DOLLAR balance. Unemployment is now entirely funded by a loan from the Feds ($827MM) and if handled like last time will eventually have to be paid back by—you guessed it—the same businesses hit in the nose by all these restrictions.
  • Recently, we received approval from the $44B in FEMA money to get our unemployed access to the President’s $400 unemployment bonus—which we couldn’t have paid out the state portion otherwise.
  • We’ve received over $3B in emergency relief for business and hospitals. Without that we’d have seen bread lines, miles long, for months. Even after this the longer-term toll will be awful. According to the Kentucky Restaurant Association, 20% of all Kentucky Restaurants will close forever. Nearly 300 business in Louisville alone are closed forever, which follows a horrible trend nationally aligning with the economic index Yelp publishes:
  • The state received $1.7B in CARES Act Funding with $1.6B set aside for state government. But this money, by law, has to be spent only on COVID related expenses. $300M of this also went to local governments.
    • Important Note: As part of the original Federal Funding we received $297,000 per case at the time of legislation of the first $30B—but at the time we didn’t have that many cases. So…no…we are not getting $297,000 per case indefinitely as some are reporting and the Becker’s article was unclear about. Think of it as a one time ‘stimulus check’ like your $1200. You haven’t gotten that indefinitely either, right?
  • Kentucky also has received an estimated $409.7 million through the act’s Education Stabilization Fund, that includes all kinds of educational stipends for schools that aren’t in school.


All-in to date, we’re easily over $2.5B from the feds to Kentucky State Government alone, a state that collects around $11B in general fund revenue per year when things are good.

Kentucky’s State Financial Dilemmas

In July, Andy celebrated their remarkable budget surplus for the end of the fiscal year despite being the in the middle of an economically destructive scenario. Bit of a half-truth there.

Fiscal year 2019 (which in government runs from July to June instead of January to December) was blessed by an outstanding economy for 8.5 months. But performance mid-March through June was really bad. In aggregate, we did have a 1% surplus because the economy was so good those 8.5 months and the stimulus checks and increased unemployment kept things from being as bad as they could have been, but if things continue like they did mid-March through end of June (and they are likely to), then we’re in trouble. I mean REALLY big trouble.

Beshear and team know this. His state budget director is forecasting a $1.1B shortfall this year and admits accurately forecasting the shortfall or budgeting in general is “like nailing Jello to a wall”. The State has cut $18 Million from budget going into the year, but is a little like peeing in the ocean being over $1B short–which means the they really can’t cut their way to the number. They’d have to raise taxes in the middle of a forced recession, cut essential services, say hello to the pension thing again or some combo of the three. That is, of course, unless you can ask the Feds to bail us out.

The HEROES Act (passed by the House as the second round of stimulus and not the Senate) could provide over $7B to the State of KY—a state that, again, collects a total of $11B in general fund revenue every year. That’s an amount of money that would fix a number of problems decades in the making in one swift stroke. 

But how are the Feds proposing distribution of those funds? In 4 tranches or categories:

  • A first and smaller distribution that is equal for every state
  • A second distribution by population
  • A third distribution by unemployment
  • And a fourth distribution by—wait for it—COVID cases.

The population one will not make us a big winner. The unemployment one won’t either now that the free money wagon has slowed a bit. Then there are COVID ‘cases’. And there is huge money on the line. If HEROES gets passed, could this be a part of the reason we hear Andy pleading (almost begging) healthy people to go get tested, not establishing clear goalposts of success and saying the only way out of this is a vaccine? Then when questioned about the possibility of a November vaccine, he immediately said that wouldn’t happen here and that it was too soon?

It’s worth thinking about, but HEROES hasn’t passed the Senate yet. And while it could be passed, I believe each revolting side is holding the needed aid in this hostage while dreaming of a big victory in November. If the Dems win the White House and Congress, then $3 trillion and free money for state governments will abound. If the Republicans win, it’s Ramen Noodles for the Kentucky State Budget, higher taxes people don’t want to pay and severe cuts to things most people don’t want cut. 

Now factor in the governmental in-fighting we see at the budget level. Andy recently all but fired the head of Kentucky Department of Fish and Wildlife recently after disputes arose around the administration’s desire and attempts to siphon money from the always financially sound department. Could this be the Administration putting pieces in place to get funding wherever they can should the ‘Ramen Noodles’ alternative occur?

Money is way, way bigger than politics

If you think this is only about an election, I hope you’re right, but you’re probably wrong. There are lockdown protests and frustrations happening in Germany, Ireland, Spain, France and all over the world and they don’t have elections November 3rd. As arrogant Americans, of which I am proudly one, we tend to think the blue marble we live on revolves around us. It doesn’t. Something bigger may be a play here than the absurdity of American Electoral Theater.

Labs have received between $50 and $60 million in federal funded testing dollars since March–JUST IN KENTUCKY. I mean, what possible motivation would they have to see cases rising? What motivation could they have to deploy PCR tests that are too sensitive and pick up positives that are asymptomatic or have such little virus in them they couldn’t possibly spread the disease?

Vaccines could drive billions in revenues just from Kentucky activities alone and trillions across the world. That’s an amount of money that realigns economic and world orders. I’m sure those companies won’t try to influence policy? And get this…the government has indemnified (held harmless) vaccine manufacturers from any bad stuff that happens from the vaccine. What could go wrong there?

Technology companies have been awarded more than $200B in government funding worldwide to develop tracking technologies that live on your phone. Google and Apple have already rolled out an infrastructure to do it (it’s on your phone now). Think that’s science fiction? Just look at this little clip from our Irish friends:

Think Google, Apple, Amazon, Wal-Mart posting surreal profits and soaring stock prices and Media Companies posting record engagement from previously dying businesses are eager to see folks ‘keep calm and carry on’ with their lives? I mean—if inclined—what muscle could they have to influence policy makers other than driving more profits combined than the GDP of 94% of the world’s countries?

Just think of the contributions these elements can give to elected officials for years to come that do their bidding, selling their drugs and services through policy. A lobbyist once told me that the easiest thing to buy in the world is a politician. I’m starting to believe it.

Could money really be behind some of this?

If we just take the $2.5B or so in state funding to date,  the $3B in support of business and health care providers in Kentucky and the $3.5B or so in unemployment paid out and factor in 1000 deaths in 6 months…

…that’s $9,000,000 per COVID death in Kentucky.

That’s big money. In some Kentucky families, that would be enough to start the 76th Annual Hunger Games. Does all of this prove a conspiracy that money is driving all these decisions? Of course not. But not many people are writing about this and if you think money at this scale can’t influence human behavior in reckless directions…well…then I envy your optimism.

All data sourced through the State’s COVID website, the COVID Tracking Project, the CDC or the articles linked through the piece.