Attorney General Beshear arrives
Franklin Circuit Judge Phillip Shepherd said Thursday he will rule "as soon as possible" after hearing more than two hours of arguments about the controversial public pension law in a courtroom primarily packed with teachers.
In arguing against the law, Attorney General Andy Beshear said he was representing 200,000 teachers, state workers and police officers in fighting against the law he said is unconstitutional.
Steve Pitt, general counsel for Gov. Matt Bevin, disagreed and contended that the new law does not hurt anyone.
Arguments focused on whether the legislature followed proper procedures in passing the law to start addressing the $40 billion-plus unfunded liability in the state retirement systems and whether it runs counter to an "inviolable contract" — language with state law that guarantees teachers and state workers get the benefits promised when they are hired.
This year's legislature approved the pension measure, Senate Bill 151, in a few hours on March 29 near the end of the session. The move sparked massive protests at the state Capitol.
Beshear filed a lawsuit against the new law on April 11 with the Kentucky Education Association and the State Fraternal Order of Police.
The law places teachers hired after Jan. 1, 2019, in a hybrid case-balance plan, which is similar to a 401(k), rather than a traditional pension, and requires those teachers to work longer before becoming eligible for retirement. It also caps the amount of accrued sick leave teachers may convert toward retirement to the amount accrued as of Dec. 31, 2018.
Under the new law, state employees hired between 2003 and 2008 are required to pay 1 percent more for health care in retirement.
It also claims the legislature ignored constitutional and statutory provisions when passing the law. Beshear said lawmakers failed to provide an actuarial analysis of the bill, failed to give the bill three readings on three different days in the House and failed to have the bill signed by the elected House speaker.
Beshear withdrew Thursday his argument about the elected House speaker. He had said the elected House speaker was Jeff Hoover, who stepped down as speaker after allegations of sexual harassment surfaced, and not David Osborne, the House speaker pro tempore who presided over the House this year and signed the bills.
Shepherd said he was not going to hold the new law defective because Osborne signed it into law.
Early in Thursday's hearing, the judge granted a request by Dave Fleenor, general counsel for the Senate Republicans, to dismiss Osborne and Senate President Robert Stivers as defendants in the lawsuit and allow them to file friend-of-the-court briefs.
Throughout the proceedings, some in the audience applauded or grumbled, but Pitt said he took no umbrage with their conduct.
Besides attracting teachers, the oral arguments brought to the courthouse House Minority Leader Rocky Adkins, D-Sandy Hook. He said, "This fight is about the future of public education in the Commonwealth of Kentucky."
Both Beshear and Adkins are frequently mentioned as Democratic candidates for governor next year. Bevin, a Republican, has not yet said if he will seek re-election in 2019.
Both Beshear and Pitt said Thursday they expect the pension case will go directly to the Kentucky Supreme Court and bypass the Kentucky Court of Appeals after Shepherd rules.
Shepherd has said he wants to rule as quickly as possible because several provision of the new law take effect mid-July.
Bevin failed in his efforts to get Shepherd off the case. The governor, who last month called Shepherd "an incompetent hack," first asked Shepherd to step aside, saying the judge's ruling could afffect Shepherd's retirement benefits.
After Shepherd declined to leave the case, Bevin asked Kentucky Supreme Court Chief Justice John Minton Jr. to remove Shepherd from the case. Minton on Wednesday denied the governor's request.
Pitt said Thursday he does not think Bevin's actions will affect Shepherd's ruling.
Before the hearing, Beshear briefly addressed a few dozen teachers in front of the courthouse.
He said he was there to support teachers, who are "under attack on all fronts."
Elly Baker, a Hardin County middle school teacher for 24 years, said it was wrong for the legislature and Bevin to "put a pension bill in a sewage bill that violates our contract with the state."
She also said Bevin has been "just ridiculous in trying to get rid of a judge."
At least two Democratic candidates for the legislature in this fall's elections showed up to support teachers: Dustin Burley of Lawrenceburg, who is running for the 53rd House District seat against Republican incumbent James Tipton of Taylorsville, and Stephanine Compton of Taylorsville, who is trying to oust Republican incumbent Jimmy Higdon of Lebanon in the 14th Senate District.