Hawver: At the Rail: Christmas Season

The Christmas season is here, and just as it is every year when a new, different-party governor takes office, state employees will wonder whether they’ll have jobs after the holidays—or Inauguration Day on Jan. 14, to be more precise.

OK, we can figure that by the time she takes the oath of office, and no longer has that “Gov.-elect” before her name, Laura Kelly will have replaced probably all or most of the 11 Cabinet secretaries appointed by either Gov. Sam Brownback or his successor, Gov. Jeff Colyer. That’s simple.

Oh, there may be some delays, but practically, if you are a Brownback/Colyer-knighted secretary, you might not want to go car-shopping this holiday season or might want to consider whether you’ll be able to afford move-ups from synthetic-to-wool or wool-to-(enter the percentage)-cashmere sweaters for the spouse.

So far (up to this past weekend), Kelly has been quiet about the new Cabinet members she will appoint. She’s got a chief of staff to keep the names straight and sent a group of transition advisers to meet with those current secretaries to see just what they do, but there are no names written down that a reporter wouldn’t have to kick in a door or bust a window to see.

Oh, and those new Cabinet secretaries are going to get to hire their own chiefs of staff and assistants and public relations offices, which ought to take care of appreciation of campaign leaders and contributors as in all change-over election cycles.

But the real issue for the thousands of state employees who do the real work for the state and generally don’t have business cards and stationery is going to be what Kelly does in the way of Civil Service for state employees. Those Civil Service jobs are generally done behind counters where they hand out driver’s licenses or help the public with tax returns or in a frequently windowless back office make sure that Kansans get the services they pay taxes for.

Kansas has gone through the Republican-managed years with steady reductions in the number of Civil Service workers. That Civil Service is a protection for workers and most importantly protects their jobs as long as they are doing their assigned jobs. Do the job right, and under Civil Service, you can’t be fired because you have a bumper sticker on your car that is different than the stickers on the car of your politically appointed boss. Do the job right without Civil Service and you can be fired or not promoted with little or no performance issue.

The Brownback years offered pay raises for Civil Service workers who gave up those protections, including hearings during which a firing or being bypassed for an advancement can be challenged.

During the now-ending Republican administration, thousands of state workers who hadn’t seen raises in several years traded that job protection for raises of 2.5% for workers who changed from Civil Service to at-will employees. Not a bad deal if you were liked by your supervisor, but for those who wanted the basic protection of fair practices in employment matters, it essentially became an insurance premium in the form of a lower wage to hold on to those protections.

Don’t look for those abandon-Civil-Service raises to continue. And, we’ll watch how the Kelly administration deals with basic job protections for workers who took the 2.5% raise-bait to see their job security based on whom they worked for, not the job they did.

We’re still waiting to see who become Cabinet secretaries under Kelly’s administration, but we’re also waiting to see what happens to the thousands of workers who park at the back of the lots farthest from the building…

By Martin Hawver

Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com

Pot Stocks Can’t Be Ignored, an Editorial from Barron’s

A recent Barron’s article by Steve Garmhausen, titled ‘Pot Stocks Can’t Be Ignored’, puts a spotlight on the strong performance of marijuana stocks through the first three-quarters of 2018. As the article notes,“Marijuana stocks have been an investor darling this year, with even hedge fund billionaire Leon Cooperman betting his own money in the sector.” The most recent buying frenzy in the space came on the heels of a late-August report that alcoholic beverage giant Diageo (NYSE: DEO) was in talks to invest in or partner with at least three Canadian cannabis companies. Tilray (NASDAQ: TLRY), one of the largest and most sophisticated producers of premium medical cannabis in the world, saw its shares skyrocket from $17 at its July IPO to a high of more than $62 earlier this week. Likewise, Cronos (NASDAQ: CRON), which commenced trading on the Nasdaq in February, rose from a mid-August low of $5.65 to a 52-week high of $12.89 in the wake of the Diageo news. “This is like bitcoin levels, the kind of move Tilray is making,” cannabis investor Jason Spatafora told MarketWatch. “The market is completely irrational.”

Marijuana stocks have been an investor darling this year, with even hedge fund billionaire Leon Cooperman betting his own money in the sector. Their big gains, including a spike in the past several days, will force advisors to take a position—whether it’s ushering their clients into the party, or just saying no.

A buying frenzy in pot-related companies touched off last week after a report that Diageo, the company behind Smirnoff and Johnnie Walker, was in talks to invest in or partner with at least three Canadian pot companies, MarketWatch notes.

That lifted firms like Tilray [TLRY] and Cronos Group [CRON]. Tilray sparked another leg up Wednesday by beating quarterly earning expectations. Since its July IPO, Tilray has shot from $17 to $61 per share. Cronos started trading on the Nasdaq in February and has since risen from $8.24 to $12.74 a share.

Is some irrational exuberance at work? Perhaps. “This is like bitcoin levels, the kind of move Tilray is making,” cannabis investor Jason Spatafora told MarketWatch. “The market is completely irrational. [Tilray’s] market capitalization is over $4.5 billion. That’s insane. They don’t have as much cash as [big rivals] Canopy or Aurora. It shouldn’t trade at half that valuation.”

For his part, Cooperman holds a position in Green Thumb Industries [GTBIF], a publicly-traded marijuana cultivator and dispensary operator, according to Business Insider.

For a deep dive into the business of marijuana, check out this March cover story from my Barron’s colleague Bill Alpert.

Steve Garmhausen

About Barron’s

Barron’s is America’s premier financial magazine. It provides in-depth analysis and commentary on the markets, updated every business day online. For more information, visit www.Barrons.com

Hawver: And They’re Off

By Martin Hawver

Well, they’re now officially off to the campaign.

That’s basically what happened this weekend, with the annual summer Democratic convention getting the message that Sen. Laura Kelly, of Topeka, is going to be a candidate without the adrenalin of Republican Secretary of State Kris Kobach and without the attacks on incumbents of independent candidate Greg Orman.

That’s the general message that Democratic insiders—those who are willing to spend two days on internal party activities—got this weekend in Wichita.

It’s a rather low-key, businesslike campaign Kelly promised, with emphasis on telling Kansans the policy choices she thinks they are likely to want, such as continued adequate financing of public schools, expanding access to health care to the poor through Medicaid (KanCare) expansion, and less cumbersome access to ballots.

A lot didn’t happen at Demofest in Wichita. There was no public endorsement of Kelly by the two most prominent candidates who fought her for the gubernatorial nomination. Former Wichita (that’s hometown) Mayor Carl Brewer and former Rep./Kansas Secretary Agriculture Josh Svaty didn’t show up for that classic “we lost, and we support Kelly” photograph that would have sealed the party support for Kelly. Might have been that she won so dramatically, with Kelly’s 52% of the Democratic primary vote to Brewer’s 20 percent and Svaty’s 18 percent.

But the clear message that Kelly sent—in her effort to create that “Blue Tide” for Democrats to boost their number on the public payroll—is that she’s going to talk about running Kansas government. She’s talking basic duties of government, not flashy issues like immigration or driving around in Jeeps with machine guns on them, as does Kobach, or just tossing out experienced public workers and administrators, as is Orman.

That might make the fall interesting because Kansans tend to be—and like to remind others—that they are businesslike. Take care of the basic state government obligations to its citizens. That’s the job of the governor.

But, does that sell, err, get votes?

The gubernatorial campaign took an expected but so far relatively un-definable step last week when Orman was granted a slot on the November ballot. He’s talked about the “insiders” of the two major political parties running the government, leaving the unaffiliated, or maybe just not very interested, at their will. It’s been mostly Republicans in recent years with that control, but he’s not assessed very publicly just what a governor without the backing of either of the largest groups of voters can accomplish.

And Kobach has continually talked about the Supreme Court—not elected legislators—determining just what is “adequate” in state aid for K-12 schools from border to border, high property valuation, and low property valuation districts.

Kobach’s incessant campaign slamming what he calls loose immigration policy hasn’t really been defined for those who in urban areas need roofs reshingled, or in rural areas fences built, and in the livestock industry cattle reduced to pan-sized cuts of meat. Yes, those are industries in which immigration is economically necessary.

So, does Kelly turn the basic business of government into a key issue that will see Kansans look for a journeyman governor who knows from the inside—and the budget—just how state government works? It’s going to put a new, very basic, not-flashy platform before voters. And the real issue is, will it sell?

Now there are other Democrats on the ballot seeking statewide positions—insurance commissioner, treasurer, secretary of state—but those aren’t jobs that tend to galvanize voters. Anyone leave your car out in the heat to vote for state treasurer?

This may become a relatively dull, technical campaign. Or…not…

Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com

Hawver: This Years Kansas Governor’s Race May not be so Predictable

If there was ever a predictable pattern in Kansas—and possibly even national politics—it is that Republican candidates for nearly every slot on the ballot tend to spend the primary election cycle pandering to the most diehard conservative members of their party to win the general election nomination.

Martin Hawver, Columnist
Martin Hawver

Now, Democrats tend to do the same thing (with the move toward the more liberal Democrats), but in Kansas, it’s to smaller numbers of primary election voters. But it works with Democrats, too.

But after that primary in both parties, it’s been traditional that the party’s standard bearers move their campaign to the middle of their party, and in some measure to the middle of the general voting age population.

Well, this will be a year that will make it worth watching whether that generally Republican move to the middle of the party after the primary election occurs.

Chances are good that Sen. Laura Kelly, D-Topeka, the Democratic nominee for governor, will not have to move very far. She’s a practical Democrat who probably dreams about budgets and line-item vetoes and cutting a deal with moderates in the Kansas Legislature to keep government moving.

And chances are good that Secretary of State Kris Kobach, who is the Republican nominee for governor, won’t move back to the middle. We’re figuring he dreams about a border wall with Mexico—or possibly Oklahoma—or that new Trump necktie that he wants…

Oh, and best-known independent candidate Greg Orman is probably dreaming about how to snag votes from both.

This year things are going to be different. Don’t expect Kobach to move toward the political middle in his campaign. Now, short-term Gov. Jeff Colyer might have, but he conceded, remember.

So, we come to a campaign where the narrow conservative side of the GOP—which includes Kobach, of course, and unsuccessful gubernatorial nomination candidate Insurance Commissioner Ken Selzer—isn’t looking for any move to the center. Nope, and had Kobach lost the GOP nomination, we’re betting he wouldn’t have let Colyer move to the center, either.

So…where does this gubernatorial race go? Who gets elected governor and has the authority to take that preposterous stuffed buffalo head off the wall of the governor’s office and, of course, run the rest of the state?

Does Kobach come up with something new that will appeal to moderate Republicans, most of whom voted for someone else in the primary? Does Kelly come up with something that will see the moderate Republicans, who are probably most of the GOP voters, furrow their brows and vote for her as long as nobody’s watching?

Or, does Independent Orman turn out to be the safety valve for Republicans who are to the left of Kobach but just can’t bring themselves to vote for a Democrat, under the suspicion that their Republican friends will find out?

And you gotta figure that moderate Republican former Sen. Jim Barnett, of Emporia when in office and Topeka now, who drew the more liberal Republican primary voters, though not enough of them, isn’t going to be touting Kobach or even letting him put a sign in his yard.

Surprising that this election might come down to the conservative Republicans of the state and the Democrats, with Orman as a possible off-ramp for those who at least talk about the general conservative values and have never read the Kansas Republican Party platform.

Oh, and whoever wins the governor’s office must remember that in just two short years, whatever the governor pushes for or against splashes back on members of both parties in the Kansas House and Senate.

We’ll see, won’t we…

by Martin Hawver

Syndicated by Hawver News Company LLC of Topeka; Martin Hawver is publisher of Hawver’s Capitol Report—to learn more about this nonpartisan statewide political news service, visit the website at www.hawvernews.com