One of Kentucky’s top Republicans signaled shaky support Wednesday for a proposal to overhaul the state’s public pension system as hundreds of public workers filled the plaza in front of the state Capitol to voice their opposition.
Republican House Speaker Jeff Hoover would not say if there are enough votes to pass a bill that would eventually close one of the nation’s worst funded public pension systems in favor of a 401(k)-style retirement plan. A few hours later, hundreds of state workers chanted and held signs declaring they were “state workers not servants.”
“We don’t care what party you are. If you hit the ‘yea' button on this bill as it stands, your seat is in jeopardy in 2018. And that’s just the bottom line,” said Nema Brewer, a state worker in Fayette County and one of the organizers of the rally.
Hoover indicated that the proposal to cut state workers’ pay by 3 percent could be a roadblock. Republican Gov. Matt Bevin said the money would help pay for retiree health benefits. But Hoover and Senate Majority Floor Leader Damon Thayer told reporters the move was designed not to put more money into the health care fund, but to save the state money.
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The 3 percent cut is one of the biggest reasons 37-year-old Joe Cope drove about 80 miles from Rockcastle County to attend Wednesday’s “Fund Our Pensions” rally at the state Capitol. Cope has been a high school English teacher for 17 years.
“When a person makes $40,000 a year, 3 percent is a lot when you’re trying to pay off a house and two cars,” he said. “We are talking about people. It’s not time to play a shell game anymore.”
But Thayer and Hoover said eliminating that 3 percent pay cut is difficult because it would likely require bigger budget cuts next year. The pension bill would require the state Legislature to spend nearly $2 billion on the pension system each year, or roughly 20 percent of the state’s annual general fund spending. Republican lawmakers say they won’t raise taxes, so paying for that will require big cuts for most government services.
“That’s a big challenge. Remember we’re trying to achieve pension savings so that we can minimize budget cuts. It’s one tough vote or another,” Thayer said.
Workers at Wednesday’s rally directed most of their ire toward Bevin, the state’s Republican governor, holding signs calling him a “bully” and declaring themselves to be “sophisticated voters.” That’s a reference to a comment Bevin made to a Lexington business group on Monday implying some opponents of the plan “do not have the sophistication to understand what’s at stake.”
Kentucky is at least $33 billion short of the money it needs to pay retirement benefits to state workers for the next 30 years. Bevin traveled the state on Tuesday to speak to business groups about the plan, telling a crowd of about 100 people in Owensboro “we have been misleading people about the financial viability of the state,” according to the Owensboro Messenger-Inquirer.