Kentucky’s Supreme Court struck down the pension law. What happens next?

The Kentucky Supreme Court Thursday unanimously struck down the state’s Republican-backed pension overhaul, which means the issue that has guided Kentucky’s political conversation for the past year will remain in the spotlight.

The ruling puts Kentucky politicians back at square one as they search for solutions to address mounting costs from one of the worst-funded pension systems in the nation.

So what’s next?

The Supreme Court struck down the pension bill on narrow terms, focusing on how the bill was passed rather than the contents of the bill itself. For example, neither the Supreme Court nor Franklin Circuit Judge Philip Shepherd touched arguments over whether the bill violated state laws that protect benefits promised to public workers.

That leaves room for Republicans to pass the exact same bill under the proper procedures and have it become law in January, but it’s not known if the bill still has enough votes to pass the General Assembly.

Democrats picked up a couple House seats in the November election, and new faces will replace several retiring lawmakers in January.

Republicans, though, have been vocal about the need to reform one of the most underfunded pension systems in the country and House Republican leaders vowed Thursday to again tackle the issue.

“We are committed to leading in the effort to enact a solution for the critical situation that once again faces our Commonwealth,” GOP leaders said in a joint statement.

There’s no clear-cut idea of what that solution will look like.

Faced with massive protests from teachers and public workers, lawmakers took a more moderate approach to reform than Gov. Matt Bevin wanted during the 2018 legislative session.

After the bill passed, lawmakers heralded it as a fix that would put the pension systems on the right track, largely because it ended a traditional pension plan for incoming teachers and pushed them to a hybrid cash-balance plan instead. But Bevin was critical of the bill, saying it was a good first step but didn’t go nearly far enough to address the crisis.

Bevin was non-committal about what he would like to see out of the 2019 legislative session in a news conference Thursday, other than saying Senate Bill 151 had stopped the bleeding and the he still hoped for more substantial reform.

So far, Republican lawmakers have offered little insight on their next move.

Senate Majority Floor Leader Damon Thayer said he hoped the legislature would pass the original Senate Bill 1, a more substantial reform of the pension system that, among other things, would have cut cost-of-living increases for retirees.

Several of the more controversial measures in the bill were taken out of the final version, but after Republicans held on to their super majority in both chambers in a hotly contested November election, there might be more support for the original version.

“I think the voters spoke loudly this election that they approve of what Republicans have done in the legislature and I see no reason for that strategy to change,” said Tres Watson, the communications director for the Republican Party of Kentucky.

Meanwhile, the pension debate will continue to be a major issue in the 2019 gubernatorial election.

“Make no mistake, Matt Bevin and the Republicans will continue the attacks on hardworking Kentuckians and try to pass even more benefit cuts in this coming legislative session,” said Ben Self, chairman of the Kentucky Democratic Party. “The Kentucky Democratic Party intends to hold him accountable in 2019 and make him a one-term governor.”

Attorney General Andy Beshear now gets to tout his legal victory as he campaigns for governor and House Minority Leader Rocky Adkins, who is battling Beshear in the Democratic primary, will once again be the face of opposition to whatever Republican-led pension reform comes next.

Both Democrats have argued the pension system simply needs to be funded rather than reformed, saying the 2013 pension reform, passed when Beshear’s father was governor, simply needs time to work.

Bevin, though, has staked his reputation on reforming the state’s pension systems and has hopes of being a national leader on the issue as many states struggle with ballooning pension costs.

His push has come at a price, largely because of how he’s spoken about the issue and derided opponents of reform. In October, he was one of the least popular governors in the country.

In his news conference Thursday, Bevin disregarded the political cost to pension reform, saying the issue is more important than politics.

“In what political world is it a good idea to tell people you’re not going to get what’s promised to you,” he said.

This story was originally published December 13, 2018 at 1:57 PM.