With pension-relief bill at stalemate, Bevin proposes ‘little changes’ to plan

Kentucky Gov. Matt Bevin said Wednesday his office is making four “little changes” to his proposed plan for pension relief for Kentucky’s regional universities and “quasi-governmental” agencies — such as health departments and local mental health departments — after legislators have arrived at a stalemate on the bill.

“We’ve got a good bill, we’ve made some accommodations,” Bevin told reporters. “They’re really not significant things, but they’re things specifically asked for by people in the House and the Senate. Some that make it a little tougher, some that make it a little more accommodating, it’s a balance of the two things, four little changes that have been made.”

Bevin briefed legislative leaders on the changes before releasing them to the public. His original proposal extended a freeze on pension costs for the universities and quasi-public agencies, holding them at 49 percent instead of 87 percent, but then presented them with a choice: stay in the Kentucky Retirement System at full price or exit the pension system; either with a lump sum payment to clear their liabilities or a 30-year payment plan that increases each year.

The four changes are relatively minor, but the most significant change pushes back the date the universities and quasi-governmental agencies have to make a decision from April 1 to April 30, which would be after the 2020 session. Bevin said in his letter that the change would allow the legislature to tweak the bill before any significant changes go into effect.

Two of the other provisions deal with what happens should one of the quasi-governmental agencies default on their payment and the third adds a non-severability clause.

Bevin said the changes were requested by members of both parties, but that they wouldn’t substantially change the bill. If the legislature is unable to reach a consensus on a solution, the agencies pension costs will spike, potentially causing some health departments to close their doors.

“If we did the truly financially responsible thing, then we would allow these rates to go up because that’s the only way you truly financially save the system,” Bevin said. “But trying to balance that with the human cost of that, in terms of jobs, in terms of the inability for these organizations to actually meet these costs, that’s the balance.”

With the deadline for Bevin to call a special session before the costs spike rapidly approaching — July 1 — Bevin said he is optimistic that the legislature will be able to vote on a bill.

“I think the prospects are remarkably high, but there’s only 138 people that can end up deciding this,” Bevin said. “If it was 138 versions of myself it would already be done. I think you could say the same for many of the 138, there’s still some that just find it daunting. And it’s a daunting challenge because no matter how this goes down, you have to find a balance between what’s financially prudent and possible together with what’s humanly appropriate.”

Other lawmakers have been more skeptical. Senate Majority Floor Leader Damon Thayer, R-Georgetown, said Republicans are only a few votes away from passing a bill, but he’s not convinced something will happen.

“Maybe this is what needs to happen,” Thayer said Monday. “Maybe we don’t have a special session and everyone can see how bad this really is.”

Thayer said the Senate would be able to pass a pension bill and that the reluctance to pass Bevin’s version of the bill has mostly come from the House. House Speaker Pro Tempore David Meade, R-Stanford, said Tuesday he thinks the House is close to being able to pass a bill, but didn’t have an exact vote count and said he “wasn’t sure” if the legislature would be able to pass something before July 1.

“I don’t know that we have the votes, I’m just saying if he makes the call we’re ready to do our job,” Meade said.

Meade added that the decision to call a special session was up to the governor. Bevin said he was waiting on the House and Senate.

“My date is as soon as the House and Senate tell me they have the votes, I’m willing to call it,” Bevin said. “But they have to be willing to do the job, there’s no point in bringing people back if they’re not willing to do what needs to be done.”

Bevin’s tough bid for re-election only adds additional pressure to the situation. While the governor said the special session has “nothing to do with politics, nothing at all,” the failure to pass pension relief would largely be laid at his feet after he vetoed the legislature’s original solution.

In a back and forth between Senate President Robert Stivers after Bevin vetoed the bill, the governor took a harsh tone that may have irked some Republican lawmakers.

Bevin said he hasn’t regretted any of the harsh statements he made, even though they are often used by his opponents as a reason not to elect him in November.

“No, I don’t,” he said when asked if he regrets any of his past statements. “Here’s the irony, the language that has been attributed is commentary that others have said. What I’ve actually said I have no regret for having said. The things that I’ve actually said. The things that people have said I said would be of a concern, but the point is this, at this point forward it is a binary choice.”

This story was originally published June 5, 2019 at 5:20 PM.