Politics & Government

Gubernatorial profile: Matt Bevin makes case for smaller government, but facts sometimes wrong

Matt Bevin, a 48-year-old investment manager and New England native, says he would "lead the charge" to cut taxes and regulations and largely leave businesses and local governments to their own affairs.
Matt Bevin, a 48-year-old investment manager and New England native, says he would "lead the charge" to cut taxes and regulations and largely leave businesses and local governments to their own affairs. Herald-Leader

Editor's note: This is the fourth of four profiles of Kentucky's Republican candidates for governor.

Republican financier Matt Bevin can talk without notes for an hour about why he wants to be Kentucky's next governor, easily tossing out facts to support his case for a smaller state government that does less.

Some of Bevin's facts might come especially easily because they're not correct.

"What's your take on Common Core?" Cincinnati radio host Brian Thomas asked Bevin in March, referring to math and English education standards implemented in Kentucky and more than 40 other states.

"Can't stand it!" Bevin replied.

"I'll tell you," Bevin said, "when you ask questions of third-graders, 'Which of the following groups of people doesn't care about the poor?', and the correct answer is 'conservatives,' that's the kind of garbage that's being foisted down the throats of our young people. It's not conducive to actually improving their educational ability."

But Common Core does not mention the poor or conservatives or mandate specific questions. Bevin was referring to a story reported by Fox News in February about a Wisconsin high school teacher who — entirely on her own — gave a "political spectrum" quiz to her civics students.

When a reporter asked Bevin about his Common Core anecdote at a recent campaign stop in Lexington, a luncheon for home-schooling parents, he shrugged and said, "Look, that was just one example."

Then he segued into his oft-repeated complaint about state government growing since Democratic Gov. Steve Beshear took office in December 2007, from 80,000 full-time employees to "more than 85,000."

In fact, state government's executive, judicial and legislative branches employed 35,950 people at the start of this fiscal year, down 9 percent from Beshear's inauguration, according to the state Personnel Cabinet. Asked to explain the discrepancy, Bevin said he is referring to the number of people in the public pension systems, which includes many thousands who work at regional universities, nonprofit mental health centers and prosecutors' offices, among other places. He said he's also counting the people who serve on several hundred public boards and commissions.

As a successful investment manager in Louisville, 48-year-old Matthew Griswold Bevin has earned himself millions of dollars by making complex market decisions on where to put his clients' money. Integrity Asset Management, the firm Bevin founded in 2003, was lucrative enough to be bought out twice by larger companies. It now oversees $5.1 billion in public and private assets.

Bevin views government far more simply: The less, the better. Beyond a few core functions, such as providing highways and law enforcement, Kentucky's state government should get out of the way, he says.

Bevin says he would "lead the charge" to cut taxes and regulations and largely leave businesses and local governments to run their own affairs. If they wish, parents should be able to take the "per-pupil spending" allocated for their children away from public schools and apply it to the cost of private, religious or charter schools or home-schooling. Bevin's nine children in Jefferson County are home-schooled.

"Why should these parents be precluded from — why are they paying for public education and then also having to pay the costs of home-schooling?" Bevin asked. "It's discrimination for political reasons, because the teachers' unions fear other alternatives are a threat to them."

Also, Bevin says, it's time to cut up state government's credit cards. If Frankfort can't afford something without more debt, then it probably should do without, he says. From guaranteed public pensions that can start at age 50 to Medicaid coverage for one-fourth of all citizens, Kentucky "has become a welfare state" because its politicians don't know how to say "No" to anyone, Bevin said at the Lexington campaign stop.

"There is too much belief that government is the solution," Bevin said.

"The reality is that government is broke. We are now borrowing money from our children and our grandchildren. We're hoping they will continue to live in Kentucky and pay taxes in Kentucky in order to pay back the obligations we are saddling them with, because we are unwilling today to make the kind of decisions necessary to manage our house according to what we can afford," he said.

"'That government is best which governs least,' that's from Thomas Jefferson," Bevin summed up. (There is no record of Jefferson making that statement, according to the nonprofit Thomas Jefferson Foundation at Monticello in Charlottesville, Va. The quote, attributed to various sources, first appeared in print after Jefferson's death in 1826.)

Conservative maverick

A New England native, Bevin served in the Army during the early 1990s and then moved to Louisville in 1999 for a finance job at National Asset Management. He quit that company in 2003, after it was sold, and started Integrity Asset Management with a handful of managers that he recruited from National City Corp. Within a few years, it was handling more than $1 billion in investments for governments and companies, a sum that doubled and doubled again. Bevin said he no longer plays a role at the firm, concentrating entirely on his campaign.

At home, Bevin and his wife, Glenna, wanted a big family. Among their nine children are four adopted from Ethiopia.

Talking to voters recently, Bevin became visibly emotional when a woman in the audience told him she was treated badly by the state Cabinet for Health and Family Services as she tried to become a foster mother for children in state custody. He responded with his own story about the state not letting him and his wife take in a foster daughter because they already had five children at the time, despite their wealth and spacious home. So the adolescent girl was left to continue "bouncing around the system," Bevin said, his eyes welling with tears.

"There's little reason for much of the bureaucracy that exists," Bevin told the woman in a choked voice. After pausing a few moments to regain his composure, he smiled ruefully and said "you can probably tell this is very personal for me."

His compassion does not extend to leaders of the Republican Party.

If Democrats are guilty of "government overreach," then Republicans can be accused of "crony capitalism," using political influence to pick winners and losers in the market with bailouts and subsidies, Bevin says. He once told The National Review magazine that he could not bring himself to vote for Republican President George W. Bush's re-election in 2004. Instead, he backed Constitution Party candidate Michael Peroutka.

Last year, Bevin made a name for himself by challenging Mitch McConnell in the Republican U.S. Senate primary. He accused McConnell — the godfather of the Kentucky GOP — of "losing touch" and voting for higher taxes, bailouts, debt ceiling increases, congressional pay raises and liberal judges. McConnell rolled over Bevin on his way to a sixth term. The senator and his allies relentlessly attacked Bevin's character in television spots, branding him a liar and a tax cheat.

Having lost the Senate primary by 25 points, Bevin never reconciled with McConnell. In his concession speech, Bevin told a room full of supporters, "We know — and we're not gonna soon forget — that we have been lied about. We know that we've been boxed out. We know that we've been ridiculed."

Last man standing?

This year, Bevin says, Republican Party bosses are keeping their distance from him, unlike two of his opponents — Louisville developer Hal Heiner and state Agriculture Commissioner James Comer — who enjoy "the support of the Washington and Frankfort interests. ... It's a divided field, where half of the establishment wants one guy and half of the establishment wants the other guy." (Bevin says his third rival, retired state Supreme Court Justice Will T. Scott, is "a nice guy" with no chance of winning.)

"Every Lincoln Day dinner I've been to across the state, you won't see an elected official wearing one of my stickers. They're scared to," Bevin said at a recent campaign stop.

As a maverick, Bevin says, he's free to criticize both political parties in Frankfort for ignoring grievous problems, such as the tens of billions of dollars in unfunded public pension liabilities owed to state workers and school teachers.

"This last (legislative) session, we expended most of the oxygen in the room on things that nobody cares about, like where kids can go to the bathroom at school. But we didn't touch the pension crisis," he said. "More than 800 pieces of legislation were filed, and only one of them offered any solution on pensions. And that solution was borrowing $3.3 billion in bonds, saddling our children and grandchildren with still more debt."

Bevin's message plays well with conservatives who share his skepticism about politics as usual.

John Wiggill, 62, a Lexington retiree, said he was impressed in April after hearing Bevin call for a shift to 401(k) defined-contribution accounts for public workers, replacing the traditional defined-benefits pensions or the more recent "cash-balance" hybrid plans that guarantee minimum payouts. Such a move would put the burden on public workers to save enough money, invest shrewdly and time their retirements well, as most private sector workers must.

Wiggill's T-shirt bore the question "Who is John Galt?", a reference to Ayn Rand's libertarian novel Atlas Shrugged.

"I've never been involved in any sort of political activity, but I was inspired here today," Wiggill said, watching as Bevin posed for selfies with voters. "This is an issue that's got to be handled. I think Matt has the best thought-out plan. I don't think there's as much substance to the others' messages. They're mostly just attacking the other guys."

Some believe those attacks could help Bevin win the nomination. As Heiner and Comer blast each other with growing ferocity, leveling personal and political accusations, "Bevin's chances appear to be on the rise," the Washington Post's political blog observed last week.

'Subsidizing poor decisions'

For all the feuding, Bevin and his primary opponents often agree on more than they disagree.

■ All say they would dismantle Kynect, the state's health insurance exchange that Beshear created under the Affordable Care Act. Kentuckians can buy insurance through the federal exchange, Bevin said. "Kentucky cannot financially afford" to operate Kynect, he said.

The $28 million annual cost of operating Kynect actually takes no money from the state's General Fund, according to the Kentucky Cabinet for Health and Family Services. It's entirely paid for through an existing assessment on insurers that previously was used to fund Kentucky Access, the state's high-risk insurance pool, which closed as its users switched to Kynect.

Bevin said he's appalled that one in four Kentuckians now get their health insurance from Medicaid, a $450-billion-a-year government program created for the poor and disabled. About 375,000 Kentuckians enrolled in Medicaid through Kynect just between 2014 and the first part of this year.

"We do not need this many people — able-bodied, working-age people — taking advantage of the system," Bevin told a debate audience in Versailles last month. "We've got to stop subsidizing poor decisions. Stop subsidizing those who are able to take advantage of a situation and of a system that we literally cannot afford to continue."

■ All four Republicans say Kentucky must enact "right-to-work" legislation that would end workplace requirements for union membership.

"It is now, whether we like it or not, a litmus test for large employers who skip us by because we're the only state left in the South that does not have it," Bevin said in Versailles. "The jobs are being sucked out of here by states that are beating us at our own game."

The liberal-leaning Kentucky Center for Economic Policy, in Berea, challenges such claims. Kentucky considerably outpaced some of its right-to-work neighbors, including Tennessee and Virginia, in manufacturing job growth since the 2008 recession, the KyCEP said in an April report. And according to the U.S. Bureau of Labor Statistics, unions represent only 12.8 percent of Kentucky workers, the majority of them employed by government.

■ All of the GOP candidates say they would cut individual and corporate tax rates to boost the economy. In particular, Bevin stresses that he would eliminate Kentucky's "death tax," which he says makes it impossible for families to pass along farms and businesses to the next generation.

"Why do we still have a death tax in this state?" Bevin asked in a recent interview. "It's an antiquated form of double-taxation."

Kentucky no longer taxes estates when people die, according to the state Department of Revenue. The state's estate tax effectively was repealed by federal law for the estates of those who died after 2004. The state does impose an inheritance tax on those getting assets from an estate, but it exempts most family members, such as parents, siblings, spouses, children and grandchildren.

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