There’s no excuse for this session to end without a budget since lawmakers of both parties have embraced Gov. Matt Bevin’s top priority: shoring up Kentucky’s shaky public pension funds.
Negotiators have resolved some differences on how to allocate money across pension funds. But the biggest stumbling block remains: Is it necessary to cut education to free up money for pensions?
Bevin and the Republican Senate say yes. But the Democratic House put more money into pensions than Bevin proposed during the next biennium without cutting education.
The charts above show funding levels in Bevin’s budget and those approved by the chambers, the starting point for the negotiations that started last week.
The Senate’s emphasis on the Kentucky Employment Retirement System reflects its dire state of crisis. The Kentucky Teachers Retirement System is healthier but still underfunded and at risk of slipping into crisis.
Bevin wants to sock away $500 million (from a surplus in the State Employees Health Plan) in what he calls a “permanent fund” for pensions in future budgets. He also wants a larger rainy day fund, altogether idling more than $1 billion, which he says will start the state on a path to fiscal soundness.
That’s a lot of money to sideline when education still suffers from years of cuts, especially at the risk of a partial government shutdown or special session if lawmakers fail Tuesday to enact a budget.