Kentucky lawmakers rushed to Frankfort Monday evening for a special legislative session that started at 8 p.m., just four hours after Kentucky Gov. Matt Bevin made a surprise announcement that he would convene them to deal with Kentucky’s struggling pension system.
“I am going to use the powers that have been granted to me to call the legislature into special session that will be effective tonight at eight o’clock,” Bevin said in a brief statement. “They will be coming in.”
Shortly after 11 p.m., two pension overhaul bills were introduced, both sponsored by Rep. Jerry Miller, R-Louisville, the chairman of the House State Government Committee. The committee will hold a hearing on the bills Tuesday at 1 p.m. Miller said there will be no vote taken Tuesday on the bills.
House Bill 1 is similar to Senate Bill 151 — the pension overhaul bill lawmakers approved in April that the Kentucky Supreme Court struck down earlier this month — but with some provisions removed. Gone is a requirement that the legislature switch to a funding method known as level-dollar funding, which requires larger pension payments in the next few years.
House Bill 2 is similar to House Bill 362, the bill that capped pension increases for local governments, school districts and regional universities, but includes a plan that would reduce a 3 percent benefit increase teachers receive when they’ve worked for 30 years to 2.5 percent in 2024.
Miller said the House was treating the bills as a proposal from the governor and that he expected lawmakers to make changes, including removing the benefit reduction for teachers and adding a requirement for level-dollar funding.
As lawmakers arrived at the Capitol in waves, many of them still hadn’t seen the proposed legislation Republicans hoped to pass in short order. The House immediately recessed to give more members time to arrive while the Senate held open its roll call until a quorum of members had arrived by about 8:30 p.m.
Republicans then went behind closed doors to discuss their strategy. The full House resumed briefly at 9:35 p.m. to take roll, then immediately went into another recess.
The confusion bred talk of compromise about a possible abrupt ending to the session among some House Republicans and their Democratic counterparts. House Minority Leader Rocky Adkins, D-Sandy Hook, and former House Speaker Jeff Hoover, R-Jamestown, said they planned to team up to file a motion to immediately adjourn the special session, a move that would be a stern rebuttal to a governor who has made addressing the pension crisis a core tenet of his political platform.
“This is typical Matt Bevin, he acts like a spoiled middle school kid who did not get his way,” Hoover said.
Republican leaders, though, never called for a vote on Hoover’s motion.
House Speaker Pro-Tem David Osborne, R-Prospect, said he couldn’t guarantee that the legislature would be able to pass a pension bill during the special legislative session and that it is still possible that they will adjourn without passing a bill given the time constraints.
Osborne said he thinks it’s important to make sure lawmakers have time to understand the bills being proposed.
“I think we owe it to the people of Kentucky to be diligent,” Osborne said.
Only a governor can call a special session and set its agenda, but lawmakers determine its length.
Senate President Robert Stivers said late Monday night after his chamber adjourned until 10 a.m. Tuesday that it will take five days to pass a bill through both chambers, adding that the session could end as early as Friday.
He said quick legislative action is needed because of potential harm to the state’s bond rating that will come out near the first of the year if the pension problem is not addressed. A lower bond rating would increase the cost of doing business for the state.
Bevin’s order for a special session came just four days after the Kentucky Supreme Court struck down Senate Bill 151, the legislature’s controversial pension overhaul bill that passed in the final days of the 2018 legislative session. The court ruled Republican legislative leaders erred by not giving the pension bill the constitutionally required three public readings in the Senate and House chambers before passing it last March.
Bevin said the Supreme Court ruling would have a negative impact on Kentucky’s credit rating, already one of the worst in the nation. Even though the 2019 regular session of the General Assembly is scheduled to start January 8, Bevin said a special session was needed immediately because of the financial impact of the ruling.
A special session also gives Republicans a procedural advantage. In odd-year legislative sessions, when the two-year state budget is not up for discussion, state law requires a super majority of lawmakers to pass a law that appropriates money. By voting on a pension bill in December 2018 instead of January 2019, the bill only needs 51 votes to pass the 100-member House instead of 60 votes.
The lawmakers were greeted by a gathering of teachers and public employees wearing red, carrying signs and handing out lyrics to altered Christmas carols that denounced the governor’s effort to cram through pension legislation in the waning days of 2018.
“This is how cowards run a government,” said Nema Brewer, the co-founder of KY 120 United. “They’re just raw because they got their hands slapped by the Kentucky Supreme Court for passing a pension bill the last time that was unconstitutional.”
Bevin was vague on the details of what legislation would be introduced Monday, but said it was unlikely that it would “chart new territory.” He had called SB 151 a bill to simply “stop the bleeding” with the pension crisis.
“I have absolute confidence that we have leadership in the House and the Senate... that they have what it takes to get this done,” Bevin said. “Whether they do or not I have no control over. I believe they will because I believe they must.”
Adkins, the House minority floor leader, called Bevin’s response to the Supreme Court ruling “appalling” and called the special session a “sad day for Kentucky.”
“Neither I nor any member of the House Democratic Caucus was consulted or even given a courtesy call that this was happening, and many of our members are unable to make it tonight,” Adkins said. “To expect legislators to be in the Capitol literally hours after calling a special session — especially during the holidays and three weeks before the next regular session — is the most short-sighted and unnecessary action I have ever seen a governor make.”
Attorney General Andy Beshear, who was celebrating his courtroom victory against the pension bill just last week, denounced the special session.
“Calling a special session a week before Christmas to cut the promised retirement of every teacher, police officer, firefighter, social worker, EMS and countless more public servants is wrong and cruel,” Beshear said on Twitter.
Rank-and-file lawmakers receive $188.22 a day during a special session plus $156.20 for expenses, according to the Legislative Research Commission. The total cost of a legislative session is about $65,000 a day, and it takes at least five days for a bill to make its way through the legislative process and to the governor for his signature or veto.
As recently as Friday, Senate Majority Floor Leader Damon Thayer, R-Georgetown, said there was no clear consensus on what type of bill lawmakers hoped to pass in the aftermath of the ruling. He said some lawmakers wanted to do nothing, others wanted to achieve more significant reform and others wanted to pass an exact replica of SB 151.
Since the special session is occurring in 2018, it will feature the same lawmakers who voted on the first pension bill, not the lawmakers who were just elected in November.
Earlier this year, the legislature hastily converted a sewage treatment bill into a pension bill on the 57th day of their 60-day legislative session and then rushed it through final chamber votes in a matter of hours with no public review and little chance for debate. The sewage treatment bill already had received most of its necessary public readings, lawmakers said at the time.
That maneuver violated a process meant to provide transparency at the Capitol, the court said Thursday. Public readings of a bill over three separate days should give lawmakers and citizens a chance to understand what legislation is on the table, the court said.
The 291-page pension law would have placed Kentucky teachers hired after Jan. 1 in a less generous hybrid cash-balance plan rather than their traditional pension plan, shifting more responsibility for saving onto teachers. Current teachers also could not count payments for sick leave days accumulated after Dec. 31 toward their retirement benefits.
For state government workers enrolled at Kentucky Retirement Systems — who have been placed in hybrid cash-balance plans since 2014 — the law would have restricted their ability to count sick leave toward retirement benefits after July 1, 2023. And a state employee who retired after Jan. 1 and returned to a state job no longer could have opened a second retirement account at KRS.
State retirees also would have lost a $5,000 death benefit, payable to a designated beneficiary.