Record $4.2 billion spent on state contracts over two years, $2 billion more approved in July

NFL registers to lobby Kentucky General Assembly on sports wagering, taxation


By John Schaaf, Executive Director, Kentucky Legislative Ethics Commission


John Schaaf

Over the past 20 years, the number of state employees has gone from more than 44,000 in 1998 to less than 35,000 today. In the same time period, money paid to contractors to perform state services has doubled, going from about $1 billion per year to over $2 billion per year.

In the two-year period that ended last month, Kentucky state government spent a record $4.2 billion on personal service contracts, memoranda of agreement (MOA), and film tax incentives.

Additionally, at its July meeting, the first of the new biennium, the Legislature’s Government Contract Review Committee approved over $2 billion of state agreements. That one-month total exceeds the $1.8 billion spent on those agreements in the entire fiscal year which ended June 30, and is the most ever approved in a single month.

Of the $2 billion approved this month, $1.2 billion will pay for 730 MOAs, which are contracts between the state and public or private providers that carry out government functions, and many are for the two-year biennium.

The committee also approved $790 million in personal service contracts and increases to existing contracts. These are agreements between the state and private contractors who perform professional services for state agencies, and many are also for a two-year period. Over $62 million in film tax incentives were also approved at the July meeting.

Some of the largest personal service contracts include: $110 million from the Dept. of Corrections to Correct Care Solutions of Nashville to provide medical services for the next two years to inmates in more than 30 public and private correctional facilities; $50 million from the Dept. of Personnel to Cannon Cochran Management of Louisville to administer the self-insured Workers Compensation Program for two years; $50 million from the University of Kentucky to Huron Consulting Services of Chicago to provide healthcare related consulting services for two years; $21.3 million for two years to Res-Care of Louisville to manage Outwood Intermediate Care Facility, an 80-bed facility in Dawson Springs; and $14.6 million for two years from the Dept. for Medicaid Services to Myers and Stauffer of St. Louis to establish Medicaid rates of reimbursement.

Other large contracts include: $10.5 million for one year from the Kentucky Lottery Corp. to IGT Global Solutions (formerly GTECH) to provide for an online gaming system; $10 million from UK Healthcare to Deloitte Consulting of Omaha to provide healthcare related consulting services for two years; $10 million from UK to Cornett Integrated Marketing Solutions of Lexington to provide all marketing and advertising for UK Healthcare for one year; $7 million for six months from the Dept. of Education to NCS Pearson of Iowa City to provide academic content testing; and $6.85 million for one year from the Dept. of Veterans Affairs to Med Care Pharmacy of Glasgow to provide pharmacy services to the Dept. of Veterans Affairs and its four veterans nursing homes.

There are 585 legislative agents (lobbyists) registered in Kentucky, and they’re working for 708 employers. By Monday, September 17, 2018, all lobbyists and employers are required to file Updated Registration Statements for the period May 1 through August 31, 2018.

Beginning September 1, the easiest and quickest way for lobbyists and employers to file is to visit the Commission’s website and click “file forms online.”

Employers of lobbyists who have recently registered include: Acreage Holdings, a New York-based owner of cannabis licenses and assets in 13 states where either medical and/or adult use of cannabis is legal; Kentucky Affordable Housing Coalition; and National Football League, which states it will lobby on issues relating to sports wagering and taxation.

Institute for Justice is the only employer to recently terminate its lobbying activity.

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