When people run for office they all support open government and full accountability for taxpayer dollars.
This session, members of the Kentucky General Assembly have a chance on the final day to fulfill some of those promises by approving legislation to provide more transparency in both the public retirement systems and the operations of area development districts.
Senate Bill 2, sponsored by Sen. Joe Bowen, R-Owensboro, awaits action in the House of Representatives. The bill requires the public pension systems, including the one that covers legislators and members of the judicial branch, to provide more complete information about their investment returns and the fees they pay investment advisors. Transparency is always good policy but this year, when the need to shore up the long-underfunded pension systems has so dominated discussion, and the budget, it is urgent.
We have expressed concern about provisions that would add six additional members to the board of the Kentucky Teachers Retirement System, all appointed by the governor and approved by the Senate, because they would politicize board oversight and make it unwieldy. A better alternative, a floor amendment by Rep. James Kay, D-Versailles, provides two new members, including one retiree elected by retirees in the system and the other appointed by the governor with no requirement of Senate approval.
However, Kay’s amendment includes two provisions, which he says he is not wedded to, that severely damage the bill. One provides that contracts with investment professionals will be released only to a limited group of people, and only after they have signed a confidentiality agreement. The other removes a requirement that those managing the funds’ investments adhere to the CFA Institute’s code of conduct for asset managers, which requires them to put the client’s investment interests first.
This is important legislation that the House should pass Friday after removing the two offensive aspects of the House amendment.
House Bill 438 would shine some light on the 15 area development districts in Kentucky that collectively administer about $175 million in taxpayer monies. Sponsored by Rep. Susan Westrom, D-Lexington, HB 438 passed the House 92-6 before running into headwinds in the Senate that seem to have passed.
Senate Majority Leader Damon Thayer, R-Georgetown, has backed away from his initial resistance to HB 438 and pledged the Senate will act on it and other transparency bills Friday, the last day of the session.
HB 438 prohibits ADDs from paying bonuses, requires them to obey state and federal laws on purchasing and conflicts of interest, and to advertise their top jobs when they come open. It also requires the state agencies that act as conduits to ADDs for federal grants for senior services and workforce training to provide legislators with an accounting of how much money each ADD received and how it was used.
The ADDs doing a good job should welcome the oversight. And the Senate should pass this bill and send it on for the governor’s signature as well.