Stivers: State budget will be 'draconian' without pension overhaul
The first day of Kentucky’s 2018 General Assembly came and went Tuesday, and no bill to overhaul Kentucky’s pension system was presented, and there was no definite word about when one will emerge.
For months, Kentucky political leaders have talked about legislation to fix the state’s financially strapped public pension systems, with Gov. Matt Bevin repeatedly promising to hold a special lawmaking session in 2017 to address the issue. But with that deadline blown and the legislature’s regular 60-workday session underway, it’s not clear whether Republican lawmakers can reach consensus on the politically explosive issue.
“I’m not surprised,” Jim Carroll, president of the advocacy group Kentucky Government Retirees, said Tuesday about the lack of action on pension legislation. “The reform process has been opaque and closely controlled by just a few people. This is in stark contrast to the 2013 pension reform effort, which was relatively transparent, deliberate and bipartisan.”
Carroll said he has an open records request pending for an actuarial analysis of the original draft pension bill that was supposed to have been presented to the Kentucky Retirement Systems board in early November.
Senate President Robert Stivers, R-Manchester, said he hopes that lawmakers will get a pension bill soon, but he quickly added, “That depends upon the process.”
He said lawmakers will need to see an actuarial analysis of any revised pension bill.
But before much can happen, the first step is “the respective chambers getting themselves and their leaderships established,” Stivers said.
That was a polite way of referring to the Republican-led House, where Speaker Jeff Hoover is reconsidering his November pledge to resign after acknowledging that he and three other Republican lawmakers had secretly settled a legislative staffer’s claim of sexual harassment.
Instead of stepping down from his leadership post, Hoover said he has instead authorized Speaker Pro Tempore David Osborne, R-Prospect, to preside over the House until an ethics investigation is concluded.
For now, Stivers said, he will work with Osborne, R-Prospect.
He said the state’s pension problems don’t have to be solved before lawmakers craft a two-year state budget, but he warned that “it will mean a draconian budget without it.”
Bevin is scheduled to present his budget proposal Jan. 16 during a joint session of the legislature. Stivers said he doesn’t know whether a pension bill will be ready for discussion by that date.
The Senate leader also said the public will have ample opportunity to review any pension overhaul plan before any legislative vote is taken.
He said the issue is “tough, but this is what we are elected to do.”
“We would love to have rainbows and puppy dogs every day, but the reality is the pension system started having problems 20 years ago.”
At a teachers rally Tuesday in the Capitol Rotunda, Secretary of State Alison Lundergan Grimes said the slow pace of pension reform was due to teachers’ strong opposition to portions of Bevin’s proposal, which would shift new hires into 401(k)-style investment plans, freeze cost of living increases for retirees for five years, and require public employees to contribute an additional three percent of their salary to retiree health plans.
Bevin attributed the lack of a special session in 2017 to the turmoil in the House, but Grimes disagreed.
“There was no special session because 1,000 teachers were on the front steps of the Capitol,” Grimes said, referring to a previous teachers rally in early November.
Grimes also said lawmakers should carefully consider their stance on pension reform given that the filing deadline for this year’s election candidates is January 30. All 100 state House seats are up for election and half of the Senate’s 38 seats.