‘This is a sad day for Kentucky’: Bevin reacts to court decision on pension law.
The 2019 General Assembly begins on Jan. 8. What will state lawmakers do with their 30 workdays in Frankfort?
It’s not a budget session — the state’s two-year spending plans are written in even-numbered years — so they won’t have much money. That will make it hard to offer ambitious solutions like putting more armed and trained resource officers and mental health counselors in schools, which are ideas floated by a special committee studying school safety in the wake of student shootings.
Here are five other subjects lawmakers have publicly kicked around in recent weeks.
Kentucky faces a $37 billion public pension shortfall. Gov. Matt Bevin has prodded lawmakers into making full pension payments after roughly 20 years of their short-changing the retirement systems for teachers and state workers. Everyone agrees that should help, although without new revenue sources, it is squeezing hundreds of millions of dollars from the rest of the state budget.
But Bevin so far has been unsuccessful at making changes he wants to the retirement systems, such as moving new teachers into less generous cash balance plans instead of traditional pensions. The Kentucky Supreme Court struck down a pension law the legislature passed last winter because of the rushed manner in which it was passed. Lawmakers swiftly adjourned the week before Christmas after Bevin called them into special session and told them to try again to quickly craft a new pension law.
Legislative leaders say they expect the pension debt to be a top priority in the 2019 session.
“We’re going to continue to work as diligently as we possibly can to find some answers,” House Speaker David Osborne, R-Prospect, told reporters after the special session ended.
Lawmakers made big changes to the state’s tax code last winter, balancing cuts to the individual and corporate income tax with a sales tax spread across a wider array of services.
As with any complex undertaking, there were unintended consequences. For example, nonprofit charities in Kentucky have found themselves forced to charge a sales tax on their fund-raising events. Legislative leaders say they expect to pass a “clean up” bill to tweak around the edges of their 2018 tax overhaul, although that will require finding more revenue to offset the losses.
Some lawmakers have far more ambitious ideas for tax legislation. A legislative task force spent this year studying the more than $13 billion in tax breaks and tax credits the state automatically grants every year, and it recommended that most be phased out.
But 2019 is an “odd-year” session, making a tax bill more difficult to accomplish. Again, state budgets are passed in even-numbered years. A three-fifths super-majority is required in each legislative chamber to raise revenue or appropriate funds in odd years. In the House, for instance, 60 votes would be needed to pass a tax bill in 2019. In 2020, the bill only would need a simple majority of 51 votes.
Senate Majority Leader Damon Thayer, R-Georgetown, recently told an audience that he would prefer to fix the glitches in the 2018 tax bill this winter and then “let it percolate” for another year before returning for more substantive tax changes in 2020.
In May, the U.S. Supreme Court struck down a federal law that had largely outlawed sports betting outside of Nevada. Since then, about 30 states around the country have started making plans to regulate — and tax — gambling on college and professional sports, horse racing, golf, combat sports and non-American sporting events.
Kentucky, which long has resisted casino gambling but has a proud tradition of racetrack betting, is about to open this new debate. Two different sports betting bills had been pre-filed for the 2019 General Assembly as of mid-December, with more expected. There is pressure to steer money raised off the taxes and licensing fees from sports betting to pay down the state’s massive pension debt.
State Rep. Adam Koenig, who leads a legislative committee that studied sports betting in October, says he’s more interested in making sure that this new form of gambling is properly regulated in Kentucky than he is in the revenue.
For one thing, this is new territory, so nobody knows what Kentucky would collect, Koenig recently told a Kentucky Chamber of Commerce forum. Testifying to Koenig’s committee, the Kentucky Lottery Corp. estimated that annual revenue from taxes on sports betting could be anywhere from $6.7 million to $26 million. Others have their own educated guesses.
“Certainly we are behind the curve, and I think this is something we should not be behind the curve on,” Koenig said.
The chairman of the Senate Judiciary Committee, Whitney Westerfield, wants to change the way criminal defendants are treated before trial.
Presently, Kentucky judges set a cash bond for most defendants after they are arrested, with a higher bond for more serious offenses. Wealthy people have no problem posting bond and awaiting trial at home, while poor people spend many months in jail despite being presumed innocent, said Westerfield, R-Hopkinsville.
Given how unequal the system is, it’s arguably not even constitutional, Westerfield told the Kentucky Chamber forum. And it needlessly costs local governments millions of dollars when they must hold thousands of pretrial inmates in their jails, he said.
Westerfield, who is running for attorney general in 2019, said he will partner with state Rep. Jason Nemes, R-Louisville, to push bail reform legislation in 2019. Instead of requiring cash from everyone, he said, judges should make a calculated pretrial assessment of defendants to determine if they are safe to be in the community and likely to return for future court appearances.
As with past attempts at criminal justice reform that have stalled in the legislature, the sponsors expect opposition from locally elected judges and prosecutors, who have their own concerns.
“They don’t want to be the ones on whose watch someone gets out and does something horrific,” Westerfield said. “People are worried about somebody who gets out at pretrial, presumed innocent, but who actually is a risk to the public and does something terrible.”
Right to sue
Section 14 of the Kentucky Constitution guarantees every citizen “speedy” and “open” access to the courts “for an injury done him in his lands, goods, person or reputation.” All Kentuckians are entitled to “justice administered without sale, denial or delay.” And Section 54 says the General Assembly “shall have no power to limit the amount to be recovered for injuries resulting in death or for injuries to person or property.”
The Constitution is why courts tend to throw out state laws passed in recent years that have attempted to limit the right to sue or cap the damages that can be recovered from litigation. Most recently, the Kentucky Supreme Court in November unanimously struck down a 2017 law requiring medical malpractice suits first to be reviewed by panels of doctors to decide their merit. The law quickly created a backlog of stalled cases.
“Of all the rights guaranteed by state constitutions but absent from the federal Bill of Rights, the guarantee of a right of access to the courts to obtain a remedy for injury is possibly the most important,” Chief Justice John Minton wrote for the court
State Sen. Ralph Alvarado, a doctor who sponsored the law on medical malpractice review panels, has pre-filed a bill for 2019 that would let voters opt whether to keep the unfettered right of access to the courts. His bill would put a constitutional amendment on the 2020 ballot to allow the legislature to limit legal damages and set stricter deadlines for people to sue.
“Let the voters decide if they want to have this or not,” Alvarado told the Herald-Leader last summer. “If they don’t want to do it, then, you know, it doesn’t happen at that point.”