Opponents of a plan to reform Kentucky’s ailing pension systems lack “the sophistication to understand what’s at stake,” Gov. Matt Bevin said Monday as he urged Lexington’s business leaders to publicly support his proposal.
“The fact of the matter is, this is not good for Kentucky,” Bevin said of the state’s pension crisis. “The people who do not have the sophistication to understand what’s at stake, but will bear the brunt of it, are the ones that are going to suffer if people like us who get it, who are willing to fight for it, don’t step up.”
Though most business leaders aren’t directly affected by the proposed changes to Kentucky’s public pension systems, Bevin said failure to approve his plan will have a negative impact on the state’s business climate. Without change, Kentucky’s credit rating will drop and it will become more difficult for the state to spend money on initiatives that boost the economy, Bevin warned.
“If you want us to be able to create an environment in which we can, in fact, have a higher credit rating, lower cost of borrowing, and a better opportunity to attract businesses like yourself to expand and or grow here, maybe locate here, encourage the people who represent you to step up and vote to change the system and keep it from bleeding out,” Bevin said.
Bevin’s public push to win over business support for his plan comes as public employees express fierce opposition.
Last week, the Kentucky Education Association held several forums where teachers confronted state lawmakers about the plan, which would require school teachers and state and local government employees to pay an additional 3 percent of their salaries into their retiree health insurance funds, shift most future workers into 401(k)-style investment plans and freeze cost-of-living increases for retired teachers for five years.
After promising teachers in Madison County that he wouldn’t vote for a bill that adversely affected them, state Rep. Wesley Morgan of Richmond became the first Republican to publicly announce he would not support the bill.
“I will not go along to get along,” Morgan posted on Twitter. “I will do what is right for my constituents. This is just one example of me keeping that promise.”
Meanwhile, Bevin has ramped up his rhetoric against the bill’s detractors.
Bevin reiterated his claim Monday that teachers who oppose the pension plan have no suggestions about how to fix the crisis.
“All the people who are opposed to doing anything have no plan,” Bevin said.
Teachers, though, have circulated several ideas about how to raise revenue and stabilize the state’s pension plans, which have an estimated unfunded liability of at least $37 billion. In particular, they have suggested cutting corporate tax loopholes, legalizing recreational marijuana and expanding gambling.
Bevin has said he would like to reform Kentucky’s tax code, though he has rejected raising taxes as a solution to the pension crisis. Bevin has come out strongly against expanded gambling and legalizing recreational pot.
On Friday, Bevin posted a Facebook Live video excoriating Tom Shelton, the executive director of the Kentucky Association of School Superintendents, for suggesting that schools close so teachers can protest the pension bill.
Bevin went after Shelton, who formerly led Fayette County Schools, again Monday.
“I hear push back from people who ironically are some of the most educated people, people like Tom Shelton who are sitting there saying we should not do this,” Bevin said. “Shame on him. I’ve said it and I’ll say it again. Shame on him. He knows better. He has his own selfish personal reasons for this, that’s not acceptable. It just isn’t.”
Bevin has not yet announced when he will call a special legislative session to vote on pension reform. When asked that question by an audience member Monday, he said it wasn’t advantageous for him to release a date yet.
Bevin is scheduled to speak with business leaders in London and Owensboro on Tuesday.