Gov. Bevin says pension relief bill is ready
Gov. Matt Bevin’s proposed special legislative session to consider a pension relief bill appears to be unraveling before it ever starts.
Senate Majority Floor Leader Damon Thayer said Monday that he has been told by several people that there are not enough votes in the Republican-led House to approve Bevin’s proposed bill.
Thayer, R-Georgetown, also said he would urge the Republican governor against calling a special session if the only action lawmakers are willing to take is freezing the pension contribution rates for regional universities and quasi-public agencies for a year.
The Senate leader’s strong statements underscore the complexity of finding a solution to the state’s vexing pension issues that enough lawmakers can accept. Without legislative action, regional universities and quasi-public agencies, such as local health departments and mental health centers, face a staggering hike in their pension contribution rates when the new fiscal year begins July 1.
House Speaker David Osborne, R-Prospect, had no immediate comment on Thayer’s remarks. Republicans outnumber Democrats in the House 61 to 39.
Thayer said he has been told by several people that votes are lacking in the House to approve the bill Bevin presented last week. It was a revision of a pension relief bill that lawmakers passed in March, only to see Bevin veto the bill last month.
Asked if the Senate, which has 29 Republicans and nine Democrats, could pass Bevin’s bill, Thayer said, “The Senate has always shown leadership in dealing with the pension problems.”
Thayer was sharply critical of a suggestion by some House Democrats that Bevin call a special session before July 1 just to freeze contribution rates until a work group on the pension systems finish its work in December and the legislature can implement reforms next year.
“I would be adamant with the governor not to call any special session for that,” said Thayer. “That is a typical failure of leadership in the House Democratic caucus. Simply a freeze sends the wrong message.”
Without some legislation to initiate a freeze by July 1, the pension contribution rates for the universities and quasi-public agencies could jump from 49 percent of their payroll to 87 percent.
“If that happens, let the Democrats defend the six months of pain that would come,” he said.
Officials have warned that as many as 64 county health departments could close in the next two years without relief from rising pension costs.
House Minority Whip Joni Jenkins, D-Louisville, told reporters Monday after House Democrats received a briefing by Bevin administration officials on the governor’s pension bill that many members of her caucus think the proper thing to do in a special session is freeze contribution rates for a year and “come back in January and look at different changes.”
Jenkins said she has “real concerns” that the governor’s bill will end up in court “and the freeze could or could not happen because of that.”
“At this point, nobody is ready to go into special session and vote on this bill,” she said.
Rep. Charles Booker, D-Louisville, said Bevin’s proposal “could be fully vetted” if legislators pass a freeze and then wait until the work group finishes its report.
Bevin’s deputy chief of staff, Bryan Sunderland, said most of the quasi-agencies cannot afford six months of the higher contribution rate.
“That’s why we are here, that’s why the governor has put forward a proposal, that’s what we are trying to avoid,” he said.
Presidents of the regional universities and six representatives of the quasi-agencies have said they support Bevin’s plan, but Kentucky Government Retirees and Kentucky Public Pension Coalition have said they oppose the bill because it could cost the state’s already ailing retirement system an extra $827 million over 30 years.
Sunderland said many legislators have told him they do not simply want a freeze on the rates. “They don’t want to dig another deeper hole in the Kentucky Retirement System by solely implementing a freeze that doesn’t happen a path forward for these entities to provide the necessary service,” he said.
He expressed doubt that the governor could initiate a freeze by an executive order.
Jenkins also noted there is a question about how many votes the bill would need to pass in each chamber.
State Budget Director John Chilton called it an “appropriations bill,” she said. Such bills require 60 percent of the vote in each chamber in odd-numbered years.
Thayer, though, said he thinks any bill in a special session would only need a simple majority to pass.
The bill allows the agencies to stay with the Kentucky Retirement Systems at full cost or leave the retirement system by paying a lump sum equal to future projected benefits payments or buying their way out in installment payments over 30 years.