Thursday Wrap Up.....

Kenneth Lay….YOU GOT OFF EASY!!!

Kenneth W. Lay, the former chairman of CEO of Enron who was convicted on May 25 of six counts of fraud and conspiracy and four counts of bank fraud conveniently died near Aspen, Colorado on Wednesday.  He was free on a $5 million bail and was supposed to have been sentenced on October 23 where he faced spending the rest of his life in jail since each count carried a 5 to 10 years sentence.

I find it very hard to be believe that a CEO of a major corporation would not be aware of millions of dollars being stolen from the company he helped set up.  I also have very little sympathy for him since his fortune had shrunk from a peak of $200 million down to around $20 million during Enron’s implosion.  I also find it hard to believe when he claimed during his trial that his net worth has shrunk to -$250,000.

In my opinion, this SOB got off too easy.  He should have been sent to federal prison to rot and had all of his wealth stripped away and given to the employees who lost their pensions and retirement from the Enron collapse because they were not sell their shares as the stock plummeted but the executives were able to dump their to save themselves.

Arkansas State Surplus….The Legislature is about to go on a drunken spending spree

Once again, the State of Arkansas has a rather large surplus at the end of the fiscal year that ended on June 30th.  Right now the state has $721 million in surplus funds and had a surplus of $420 million for fiscal year 2005-2006 alone.  Instead of wasting this money away on stupid pet projects, I would propose the following uses:

• Set aside a large portion of the surplus (maybe half) for a “Rainy Day Fund” maybe in some sort of interest bearing account so it can accumulate in value over time and use the interest for projects.


• Increase funding for the Department of Corrections and Department of Community Punishment to decrease the backlog of state prisoners in county jails.  This would help a lot of the counties (especially Pulaski) when their own jail operations by freeing up jail beds.


• Increase the amount that the State contributes to health insurance for state employees and teachers so offset the annual 10% increase they have been seeing in the last few years.  The teachers have it much worse than the state employees because what the state and school district apply towards the insurance premium is significantly less than what the state contributes for state employees.


• Eliminate the sales tax on groceries WITHOUT increasing the general sales tax rate.  If the state has a surplus of $400 million for FY2005-2006, I think they could do without the $100 million or so that would result from eliminating the sales tax on groceries.


• Increase economic development funding both for marketing and tax credits for new businesses.  If the state could provide some better tax incentives like other states have been doing, we just might get that auto assembly plant in Marion that everybody wants.


• Increase bio-fuels tax credits.  We should be pushing bio-fuels more and more to lessen our dependence on foreign oil especially since bio-diesel is made with Arkansas soybeans.

I do not think any of the surplus should be spent on public education though.  Its not that I am opposed to public education (I just don’t trust them to give my children a proper education because the teachers unions and district administrators are out of control, so my children will be attending private schools), its just that not matter how much money you give a school district, the superintendent is still going to say its not enough.

Look at the Rogers School District, they are probably the “wealthiest” school district in the state and they sued the State of Arkansas last year saying that they were not being given enough money based after education funding was increased by hundreds of millions of dollars…

I know they are looking at spending several hundred million dollars to repair and replace school buildings but a lot of them fell into disrepair because the districts would not maintain them in the first place.  Why should it fall on the state because an individual district is unwilling to be a good steward of the public funds entrusted to it?